The bond market is under serious pressure.

The bond market is under serious pressure.

The 10Y Treasury yield now exceeds the S&P 500’s earnings yield by ~90 basis points, the 2nd-largest negative spread in 24 years.

Over the last 5 years, the difference in yield has dropped -680 basis points.

The S&P 500 equity risk premium has been negative since mid-2024, except for a brief jump in April 2025.

This means that, in theory, less risky 10-year Treasuries are now offering a higher yield than the S&P 500.

In other words, investors are penalized for taking the extra risk of owning stocks over bonds.

Historically, this has been associated with high risk appetite and stretched equity valuations.

The bond market is under historic pressure.