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Treasury Yields Soar as Ballooning U.S. Deficit Worries Wall Street

1. Treasury yields surged due to concerns over U.S. deficit sustainability. 2. The 30-year bond yield reached 5.1%, its highest since November 2023. 3. S&P 500 fell 1.6% amid rising yields and weakening demand for debt. 4. Morgan Stanley warns high yields may pressure stock valuations significantly. 5. Moody's downgraded U.S. debt, impacting confidence in federal assets.

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FAQ

Why Bearish?

High Treasury yields reduce the attractiveness of equities, impacting S&P 500 valuations. Historical instances, like 2018, show that rising yields can trigger market corrections.

How important is it?

The article highlights key economic indicators significantly influencing market sentiment and stock valuations.

Why Short Term?

The immediate effects of rising yields are likely to be felt quickly in the stock market. Past observations indicate rapid reactions to significant economic signals.

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