As the spike in bond yields re-emerges as a risk for equities, some corners of the U.S. stock market are particularly vulnerable.
Shares of smaller companies, especially those that are unprofitable or reliant on debt, are in the crosshairs. Economically sensitive sectors such as consumer or housing-related companies could falter, while dividend-paying stocks may lose appeal, undercut by more attractive Treasury payouts.
Technology, the largest part of the U.S. stock market based on weighting, could see pressure, particularly among shares that gained significantly during the market’s recent rally, such as semiconductors.
“If most of the value depends on future cash flows, cheap debt, private-market marks, or a resilient consumer, higher yields do real damage,” said Joshua Barone, wealth manager at Savvy Advisors in Reno, Nevada.
A global bond rout continued to cloud markets on…
