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Equities: Stocks track rising bond yields – HSBC

FXStreetMay 25, 2026 11:08 AM
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HSBC Asset Management discusses how rising global bond yields, including higher US 10-year Treasuries, are affecting global equities. The report argues that current yield moves are still consistent with an environment stocks can tolerate, as real yields remain low and profit growth is strong. It also notes recent softness in global equities as valuation concerns offset robust US earnings.

Stocks digest higher global yields

"Global bond yields are on the rise, with US 10-year Treasury yields up around 0.2% in recent weeks, and investors are asking whether this spike is finally what kills the stock market? The answer is that it depends on whether the bond move is “good” or “bad”."

"So, which is it now? The answer is: it’s not too bad. Since February, most of the move in bond yields has been at the short end, with a big shift in central bank policy expectations."

"But while nominal yields are up, inflation adjusted “real” yields remain low across the curve. That’s good news for stocks, which are naturally inflation hedged, and sensitive to real rates."

"It is worth keeping a close eye on bond yields… but right now, it’s a move that stocks can live with, albeit with some volatility. The weapon is blunt."

"Global equities softened as renewed concerns over high valuations offset strong Q1 US earnings. In the US, the S&P 500 and Nasdaq indices retreated, with Nikkei 225 also weak and Euro Stoxx 50 index little changed."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

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