TREE NEWS reports: JPMorgan said in a September 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 rather than yield levels the key determinant of the valuation ceiling. The 30-year Treasury yield has risen to about 5.40%, a near 20-year high, while the S&P 500 is still up about 16%. Goldman Sachs, Morgan Stanley and JPMorgan strategists do not see a moderate Fed hiking cycle as a bull-market ender.
JPMorgan: 10-Year Treasury Yield Threshold for US Equity Valuation Pressure Is 5%-6%
AI take
The takeaway is not that yields are harmless, but that the current selloff is being framed as a discount-rate story when strategists view earnings as the binding constraint. That matters because it shifts the burden of proof onto profit growth, and onto whether the long end keeps repricing without dragging the equity risk premium with it. The open question is whether the gap between a 30-year near multi-decade highs and a still-positive S&P 500 persists, or whether the level JPMorgan flags starts to matter.
Generated by AI for reference only.
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