Rising Treasury Yields Pressure Bonds and Small-Cap Stocks
publishers 2articles 3first reported 23 Sep, 23:47 UTCdeveloping since 23 Sep · 9 editions
Rising Treasury yields are deepening losses in the bond market and weighing on parts of the U.S. stock market, even as the S&P 500 continues to advance despite higher yields and crude oil prices.
CNBC reported that the bond selloff has created sizable tax-loss harvesting opportunities. Investors may be able to sell depreciated bond holdings and use the losses to offset gains from stocks, potentially improving the tax outcome of portfolios that have benefited from the equity rally.
The pressure has also prompted some investors seeking diversified portfolios to consider alternatives to conventional bonds. MarketWatch highlighted three possible alternatives as bonds struggle to emerge from a five-year slump, while U.S. stocks have continued moving higher.
Small-cap stocks have been particularly vulnerable during the bond liquidation, according to CNBC. The segment is falling behind the broader market as rising yields and oil prices create additional pressure, contrasting with the resilience of the S&P 500.
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