10-Year Treasury Yields Hover at 4.95%: Higher Discount Rates Pressure Tech Valuations

Fixed Income Pressures Equities

The benchmark 10-Year US Treasury yield tested highs near 4.95%–5.00%, continuing to act as a powerful gravitational pull on equity market valuations.

Equity Market Transmission Channels

1. Discount Rate Math: Higher risk-free yields automatically reduce the present value of cash flows projected 5 to 10 years into the future.
2. Cash as an Asset Class: Ultra-short Treasury bills yielding near 4.5% offer institutional money market funds an attractive alternative without equity volatility.
3. Credit Spreads: High-yield corporate debt spreads widened by 28 basis points, tightening overall private sector borrowing conditions.