Surging US yields spook markets as stocks pull back

Surging U.S. Treasury yields are tempering stock enthusiasm, with fund managers cutting equity exposure (down to 49% from 56%) and cash holdings rising to 3.9%. The 10-year yield climbed to about 5%—the highest since 2007—driven by persistent inflation signals and higher oil prices, fueling expectations of higher-for-longer rates. While investors remain positive on earnings and AI growth, a disorderly bond sell-off is now viewed as the top market tail risk amid ongoing midterm uncertainty.