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Macro US Stocks

JPMorgan: 10-Year Treasury Yield Threshold for US Equity Valuation Pressure Is 5%-6%

JPMorgan said in a September 14 report that the 10-year Treasury yield must rise to roughly 5%-6% before it meaningfully compresses S&P 500 valuations, with earnings growth rather than yield itself setting the ceiling. The 30-year Treasury yield has climbed to about 5.40%, a near 20-year high, yet US equities are up roughly 16%. JPMorgan found a “inverted U” relationship between yields and valuation multiples since 1950.

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AI take

The report's core claim is that the level of yields matters less than the earnings backdrop, which reframes the recent rise in long-end yields as a valuation story only above a much higher threshold. That distinction matters for anyone reading equity resilience as complacency: on this framework, multiples can absorb a lot before the discount-rate channel bites. The open question is whether earnings growth continues to carry that load if long yields keep climbing toward the cited range.

Generated by AI for reference only.

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