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Stocks can still hold up as 10-year Treasury tops 5%

The 10-year Treasury yield crossed 5% for the first time since July 2007, while the Fed raised the Fed funds rate by 25 basis points.

Reported · Written up by our desk · Fund Industry

ETF Trends says the 10-year Treasury yield crossed 5% this week for the first time since July 2007, alongside a 25 basis point hike to the Federal Reserve’s fed funds rate.

The outlet argues that while higher rates can be a headwind for equity valuations through a higher discount rate, that pressure has already shown up to some extent, noting the S&P 500’s forward price-to-earnings ratio is near 19x, below its five-year average of 19.8x.

ETF Trends frames the move as a shift back toward a more typical long-term rate range, contrasting the sub 2% era after 2008 with the longer-term distribution of rates.

Latest closeS&P 500 7,765.36 ▼0.5%

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