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Strong US economy and AI demand support S&P 500 despite yield pressure
The article points to past episodes where rising Treasury yields did not immediately derail major stock indices, including 1994 and 1999.
Action Forex says the US stock market does not always fall when bond yields rise, citing a strong economy and high demand tied to the artificial intelligence boom as key supports for the S&P 500.
The outlet notes that the main headwinds for stock indices are geopolitics and the Federal Reserve’s intention to tighten monetary policy, which it says can push yields higher, weaken corporate fundamentals, and intensify investor competition between equities and Treasuries.
Action Forex contrasts index performance, saying the Nasdaq 100 rebounded sharply in September and moved close to its highs, while the Russell 2000 and the Dow Jones have faced ongoing selling pressure.
The piece also draws on history, arguing that rapid rallies in Treasury yields have not always led to stock-market collapses, including examples from 1994 and 1999, and it cites a roughly 49% drop in the S&P 500 from its March 2000 peak after the dot-com crash.
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