How Do Rising 10-Year Treasury Yields Affect the Stock Market?
Direct answer
Yields and stocks
Rising bond yields can hurt stocks because they raise the rate used to value future profits, increase companies' borrowing costs and make safe bonds a more attractive alternative. But when yields rise because growth is strong, stocks can rise too. FRED data show that daily S&P 500 returns and changes in the 10-year Treasury yield were positively correlated from 2017 to 2021 (0.11 to 0.51), turned negative in 2022–24, and were −0.28 in 2026 so far. The 10-year yield reached 5.31% on October 5, 2026, its highest since May 2002, and was 4.86% on November 6.
- Higher yields lower the present value of future earnings, hitting growth stocks most
- Why yields rise matters: growth (often fine for stocks) vs inflation or deficits (usually bad)
- Daily correlation S&P 500 vs 10-year yield changes: +0.37 (2017), −0.18 (2022), −0.28 (2026)
- 10-year yield peak 5.31% on Oct 5, 2026, highest since May 2002
Every few months a bond-market move dominates stock-market headlines. The link is real, but it is not a simple "yields up, stocks down" rule.
What people on X are asking
In September 2026 a market account warned that the 10-year yield had hit levels not seen since 2007, above 5%. In October another post flagged a down day for stocks with the headline watch Treasury yields, and in November a user asked what the bond market was telling households as the 10-year fell back toward 4.9%. Our data check the claim and the relationship.
The fact-checked answer
UXS chart
US 10-year Treasury yield: nominal and real (inflation-protected)
10-year nominal: latest
4.86%
November 6, 2026
10-year real (TIPS): latest
2.63%
November 6, 2026
Year by year: 10-year nominal
Computed by UXS from the same data as the chart. Tap a column header to sort. * = year to date (latest data November 6, 2026).
| 2026* | 4.86% | +0.68 pts | 5.31% | 3.97% | 2.63% |
| 2025 | 4.18% | -0.40 pts | 4.79% | 3.97% | 1.93% |
| 2024 | 4.58% | +0.70 pts | 4.70% | 3.63% | 2.24% |
| 2023 | 3.88% | +0.00 pts | 4.98% | 3.30% | 1.72% |
| 2022 | 3.88% | +2.36 pts | 4.25% | 1.63% | 1.58% |
| 2021 | 1.52% | +0.59 pts | 1.74% | 0.93% | -1.04% |
| 2020 | 0.93% | -0.99 pts | 1.88% | 0.52% | -1.06% |
| 2019 | 1.92% | -0.77 pts | 2.79% | 1.47% | 0.15% |
| 2018 | 2.69% | +0.29 pts | 3.24% | 2.44% | 0.98% |
| 2017 | 2.40% | -0.05 pts | 2.62% | 2.05% | 0.44% |
| 2016 | 2.45% | +0.18 pts | 2.60% | 1.37% | 0.50% |
| 2015 | 2.27% | +0.10 pts | 2.50% | 1.68% | 0.73% |
| 2014 | 2.17% | -0.87 pts | 3.01% | 2.07% | 0.49% |
| 2013 | 3.04% | +1.26 pts | 3.04% | 1.66% | 0.80% |
| 2012 | 1.78% | -0.11 pts | 2.39% | 1.43% | -0.67% |
| 2011 | 1.89% | -1.41 pts | 3.75% | 1.72% | -0.07% |
| 2010 | 3.30% | -0.55 pts | 4.01% | 2.41% | 1.00% |
| 2009 | 3.85% | +1.60 pts | 3.98% | 2.23% | 1.48% |
| 2008 | 2.25% | -1.79 pts | 4.27% | 2.08% | 2.14% |
| 2007 | 4.04% | – | 5.26% | 3.83% | 1.73% |
A correction first. The 10-year yield did pass 5% in September 2026, and on October 5 it closed at 5.31%. That was higher than any reading in 2007 (the 2007 peak was 5.26%), so the accurate comparison is "highest since May 2002", when it last closed at 5.32%. The inflation-protected (real) 10-year yield reached 2.95% the same day.
Why higher yields can hurt stocks. A share's value is the present value of all its future profits. A higher discount rate shrinks that value, especially for companies whose profits are expected far in the future, such as fast-growing technology firms. Higher yields also raise borrowing costs for companies and households, and they give investors a safer alternative: if a 10-year Treasury pays 5%, the case for stocks with a low earnings yield gets weaker. See what a good P/E ratio is.
Why it is not always bad. Yields also rise when the economy is strong and companies' profits are growing. In that case stocks and yields can rise together. The key question is why yields are moving: stronger growth, higher expected inflation, a more hawkish Fed, or worries about government debt. Growth-driven rises are usually easier for stocks to absorb than inflation- or deficit-driven ones.
Correlation of daily S&P 500 returns with changes in the 10-year yield
Computed by UXS from FRED SP500 and DGS10 (daily S&P 500 percentage returns vs daily yield changes in percentage points). Tap a column header to sort.
| 2017 | +0.37 | Yields rose on good news |
| 2018 | +0.35 | Mostly growth-driven |
| 2019 | +0.51 | Falling yields came with growth fears |
| 2020 | +0.48 | Crisis and recovery moved both together |
| 2021 | +0.11 | Link weakening |
| 2022 | −0.18 | Inflation shock: higher yields hurt stocks |
| 2023 | −0.07 | Mixed |
| 2024 | −0.06 | Mixed |
| 2025 | +0.13 | Growth and policy news dominated |
| 2026 (to Nov) | −0.28 | Higher yields again weighing on stocks |
What 2026 looked like. The 10-year yield rose from 3.97% at the end of February to 5.31% in early October. The S&P 500 still set a record of 7,818.93 on October 6, showing that stocks can climb with yields for a while. But the negative 2026 correlation means that on a typical day, higher yields came with lower stock prices, and when yields stayed above 5% the index fell about 6% into early November as yields eased back to 4.86%.
Quick poll
At what 10-year Treasury yield would you start preferring bonds over stocks?
What each answer means
- Below 4%: Bonds would offer little over inflation; most long-term investors stay with stocks.
- 4–5%: Roughly the 2025–26 range; many balanced investors add bonds here.
- Above 5%: Levels last seen in 2002–07 and briefly in October 2026.
- Yields don't change my allocation: A valid long-term approach if your mix fits your goals.
Your answer is stored only in this browser (localStorage). UXS does not collect, count or publish votes, so no totals are shown.
How to use this. For long-term investors, the main lesson is diversification: a mix of stocks and bonds behaves differently depending on whether the shock is growth or inflation. For traders, yields are a key input on days with inflation data or Fed decisions; see what happens to stocks when the Fed cuts rates and does an inverted yield curve mean a recession.
The Fed's balance sheet also affects yields; see does quantitative tightening hurt stocks.
Some traders watch commodities for clues on yields; see the copper-to-gold ratio and the 10-year.
Rate rises hit some styles harder; see why growth stocks fall more than value when rates rise.
Decision helper
| If yields rise because of… | Stocks have tended to |
|---|---|
| Stronger growth | Hold up or rise |
| Higher inflation | Fall, especially growth stocks |
| A more hawkish Fed | Fall |
| Government debt worries | Fall, with the dollar sometimes weaker |
Common mistakes
- Treating every rise in yields as bearish for stocks.
- Ignoring real yields, which matter most for valuations.
- Repeating headline comparisons without checking the data.
- Concentrating in long-duration growth stocks when yields are climbing.
FAQ
Why do rising bond yields hurt stocks?
They lower the present value of future profits, raise borrowing costs and make bonds more competitive.
Do stocks always fall when yields rise?
No. From 2017 to 2021 daily changes were positively correlated; the link turned negative in 2022 and 2026.
What was the highest 10-year yield in 2026?
5.31% on October 5, the highest since May 2002.
Which stocks are most sensitive to yields?
Companies whose value depends on profits far in the future, such as high-growth technology firms.
What is a real yield?
The yield on inflation-protected Treasuries; it reached 2.95% on October 5, 2026.
Should I sell stocks when yields rise?
Not automatically; consider why yields are rising and your own time horizon.
Sources
- SEC Investor.gov: Bonds FAQs
- FINRA: Bonds
- Federal Reserve: Monetary policy
- FRED: 10-year Treasury inflation-indexed yield (DFII10)
Facts checked November 10, 2026. X posts are cited as evidence of the question, not of the answer.