Stocks Hold Ground as Yields Rise on Real Rates, Not Inflation

Stocks have not tumbled despite rising bond yields because the move is driven by higher real rates from solid growth, AI infrastructure spending, and a repricing of the Fed’s path rather than a spike in inflation expectations. Strong S&P 500 earnings (up ~52% YoY in Q2) support continued upside, and history suggests a strong start to the year can persist into fall. With the 10-year yield around 4.93% and the 30-year near 5.33%, investors see normalizing fixed income markets after a subdued period, and equities remain buoyed by robust earnings and a favorable policy outlook.