Rising bond yields hurting the S&P 500 indexThe rising bond yields is one of the top reasons why the S&P 500 index has pulled back in the past few months. Data shows that the 30-year yield surged to 5% for the first time since 2022. The 5-year and 10-year yields have also continued rising in the past few months.
These yields rose after the US published strong nonfarm payrollsdata on Friday. According to the Bureau of Labor Statistics (BLS), the economy added over 264k jobs data, higher than the median estimate of 112k. The unemployment rate dropped to 4.1%, the lowest level in three months.
Therefore, these numbers confirmed the Federal Reserve’s view that the labor market was doing well. Officials are now focusing on the steady inflation and have hinted that the bank will only deliver two cuts this year.
Last year, we wrote about the bond vigilantes and warned that they may impact the stock market. These vigilantes are investors who typically push bond yields significantly higher when government spending is rising.
