What Rising Yields Mean For U.S. Stocks [Dow Jones Industrial Average, SPDR S&P 500 ETF Trust]

In other words, last week’s market performance demonstrated that, as I’ve discussed in previous pieces, it doesn’t take much of a yield rise to put downward pressure on the more rate-sensitive parts of the U.S. market, given how stretched valuations are.

Such market segments, including utilities, have historically proved more vulnerable to contracting valuations as rates rise, and they’re likely to suffer further assuming that rates rise moderately this year.

Sources: Bloomberg, BlackRock research

Russ Koesterich, CFA, is the Global Chief Investment Strategist for BlackRock. He is a regular contributor to The Blog and you can find more of his posts here.

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