Higher US yields are starting to weigh more heavily on equities
US interest rates have moved up again after last week's stronger labour-market data, helping the dollar firm and pushing markets to delay expectations for Federal Reserve easing. According to the Spanish source, futures are now pricing the first Fed move later than before, with policy expectations shifting further into 2026.
That matters because rising bond yields are now competing more directly with the earnings yield on the S&P 500. The source notes that the index's forward earnings yield sits only modestly above the 10-year Treasury yield, while the 30-year Treasury yield is holding above key levels. In other words, equities still look expensive enough that a higher-for-longer rate backdrop could become harder to ignore.
This week's CPI and PPI data could become the next market test
The market's sensitivity to interest rates appears to be rising, and this week brings two inflation releases that could either intensify or ease that pressure. US consumer price data is due on Wednesday, followed by producer prices on Thursday.
The Spanish article highlights the risk that both releases could reinforce the message from recent labour data rather than soften it. If inflation surprises on the upside, Treasury yields may push higher again and make it harder for investors to defend current equity multiples. If the data cools instead, it could offer some relief to rate-sensitive parts of the market.
