U.S. stocks retreated Tuesday after the 30-year Treasury yield climbed to its highest level in nearly two decades, extending a selloff that began last week. The S&P 500 fell 0.5% to 7,745.06, while the Nasdaq 100 futures dropped 1.3% as higher borrowing costs weighed on growth-oriented shares.
The 30-year yield surged from 5.18% to a peak of 5.34% within a week, compressing the S&P 500's earnings yield to just 5%. Despite corporate profits rising 47% last quarter, capital markets strategist Ed Yardeni expects growth to slow to 25% for the remainder of the year.
Market nerves are further frayed by record yen short positions and Japanese government bond yields well above 2024 carry-trade unwind levels. Barclays sees signs of a resurgent "sell America" narrative across rate and currency markets, while New York Life Investment Management notes a growing debate over the strategy.