Live Markets: Why (US) stocks can keep defying yields

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05/10/2026 10:30

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WHY (US) STOCKS CAN KEEP DEFYING YIELDS
A jump in bond yields caused equities to tumble in 2021 as juicy yields pushed investors to think twice about high-flying tech stocks. That relatively recent history is triggering some angst as yields once again soar.
So far stocks have been pretty resilient, especially in the US, where the tech-focused Nasdaq .NDX hit a record high late last week. 
And that fortitude should continue, according to strategists at Edmond de Rothschild.
The Geneva-based bank and investor said periods of rate hikes - such as the one we’re seeing, which is pushing up yields - are mostly moments of economic expansion and therefore rising corporate profits, which drive equity markets higher.
“In such a context, cyclical and growth stocks outperform, particularly Materials, Industrials and Technology,” wrote the authors, including head of global investment research Hervé Prettre.
The S&P 500 is likely to continue outperforming other markets, according to EdR, given its greater exposure to growth sectors - most importantly technology. The US benchmark .SPX is up 13% this year versus a 7% rise for Europe’s STOXX 600 .STOXX.
That’s particularly the case as in Europe inflation is thought to be primarily about energy prices rather than growth, the strategists said, and where worries about the deficit could continue to push up French yields.
(Harry Robertson)
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