Wall Street slides on tech selloff as bond yields rise – business live |

The dividend yield on the S&P 500 is estimated to be around 1.5%, close to what the 10-year bond is paying. So, if bond yields continue to rise, this could be bad news for stocks, as yield-seeking investors could make equally good or better returns by holding longer-dated government debt.

Obviously, banks being excluded because lenders tend to rise in share value when interest rate expectations are on the ascendency. This is because charging interest is banks’ main source of income.

But central bank heads are continuing to dismiss early taper talks and tightening cycles. Central banks are historically always behind the curve. Most tend to have a reactionary policy response rather than anticipatory one to changing market conditions.

However, could the bond yield rally continue? Well, a lot depends on how the economy evolves in the coming months. If things don’t turn out to be as rosy as the markets are currently expecting, then this could be a reason for yields to drop back.