TREE NEWS reports: JPMorgan said in a Sept. 14 report that the 10-year Treasury yield would need to reach roughly 5%-6% before it meaningfully compresses S&P 500 valuations, with earnings growth — not the yield itself — setting the ceiling. The S&P 500 trades near 22x 2026 EPS on implied 28% earnings growth and about 18x 2027 EPS on 21% growth, leaving room for further re-rating if growth stays above 15%.
JPMorgan: S&P 500 Can Withstand 10-Year Yield of 5%-6% If Earnings Hold
The notable claim here is that the level of yields matters less than the earnings path, which reframes rate anxiety as an earnings-durability question. It implies equity multiples are being underwritten by profit growth assumptions that are themselves unusually high, so the sensitivity sits in the growth forecast rather than the discount rate. Whether those growth estimates hold — and whether the cushion JPMorgan describes survives any earnings disappointment — is the open question worth tracking.
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