Dalio Warns Stock Market’s Cushion Against Rising Bond Yields Is Shrinking

Dalio's point is less about an imminent selloff than about the mechanism that has kept equities resilient during a global bond selloff: an earnings-driven risk premium over bonds. If that cushion erodes as yields rise and cash flow weakens, the same earnings growth becomes a weaker offset to tightening financial conditions. The notable part is the framing — the vulnerability comes from relative valuation math, not from an earnings collapse. Whether earnings growth continues to outrun rising yields is the open question.