Strategists: The Real Sell-Off Threshold for U.S. Stocks Is Far Above 4.5%
Nashnova编辑部
US Treasury yields have surged to their highest since 2007, but Strategas Research Partners argues the real pain threshold for equities is well above 4.7% — money simply does not want to leave stocks, and the true risk hides in tech concentration.
Bonds are selling off — why haven't stocks cracked?
Strategas chief market strategist Chris Verrone's core call: money does not want to leave equities as an asset class. The market has not yet found a rate level that can compete with stocks.
He describes the current environment as a "high-rotation market" — capital is rotating within stocks, not flowing from stocks into bonds.
This means → The bond sell-off itself is not the signal. Where the money goes is the signal — and right now it is staying in equities.
4.5% is not painful enough — where is the real threshold?
The 10-year Treasury yield triggered equity corrections each time it hit 4.5% in 2023, 2024, and 2025, but Verrone argues that threshold has shifted higher.
His logic chain: US nominal growth (GDP plus inflation) runs at roughly 6.5% → rates must exceed nominal growth to truly pull money away → the real pain threshold sits above 4.7%, far higher than most expect.
In plain terms = the economy is still running at 6.5%. At 4.7%, rates have not "caught up" with growth, so stocks remain the more attractive bet.
Has history seen rates rise this far without a crash?
Verrone cited two extreme cases: in 1989, Japanese government bond yields rose from 4% to 8% while the Nikkei kept "melt-up" rallying; in 1999, the US 10-year yield climbed from 4% to 7% and the Nasdaq boom continued.
This means → Rising yields and rising equities can coexist for extended periods — until rates finally overwhelm corporate earnings growth.
Current data: the 10-year stands at 4.745%, the 30-year has reached 5.330% (highest since 2007). Yet over roughly 400 days since Trump's second inauguration, the 10-year's trading range has been just 85 basis points — the narrowest Strategas has ever recorded.
Is the market's internal structure actually improving?
When the S&P 500 hit its all-time high on June 2, only 50% of its constituents traded above their 200-day moving average (the average price over the past 200 trading days).
That figure has since risen to 75% — even as semiconductor stocks pulled back, market breadth improved over the past eight weeks.
This reflects a rally that is broadening beyond a handful of tech giants — typically a sign of a healthier bull market, not a topping one.
So where is the real risk?
Strategas CEO Jason Trennert flagged a different layer of concern: the market is heavily concentrated in the tech sector, with hyperscalers like Amazon ramping capital expenditure to stay in the AI race.
That spending cannot be fully funded by their own cash flows, and will inevitably pressure both bond and equity markets.
Trennert's verdict: "When stocks are rising and long-term rates are also rising, yet the market seems unfazed — that is precisely the moment of greatest risk."
What does the "gathering storm" look like?
Trennert identified uncertainty over the Iran situation and a murky Fed rate path as two external variables forming a "gathering storm" for equities.
Nasdaq 100 futures are currently down about 1.17%, with tech stocks under visible pressure.
In plain terms = Verrone is asking "how high do rates need to go to pull money out of stocks?" Trennert is asking "will Big Tech's burn rate crush it first?" — they are not worried about the same thing, but both point to the same core question: whether the conditions keeping this bull market alive still hold.
Content is for reference only, not financial advice.