U.S. bond yields are reaching multiyear highs, driven by abundant government and corporate debt supply alongside persistent inflation. The United States just sold 30-year debt at the highest borrowing cost since 2001. Despite this, the S&P 500 recorded its 27th record closing high of 2026, and even the more rate-sensitive Russell 2000 small-cap index hit an all-time high. According to LPL Financial, the relationship between bond yields and equities has turned negative again, highlighting this apparent divergence between the bond and equity markets.
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