Rising Treasury yields have spooked the stock market. Relief may be on the way.
Following a two-day selloff in the longest-dated maturities that sent yields to one-month highs, buyers returned to the U.S. government-debt market on Thursday. This kind of buying interest could keep Treasury yields in check going forward. The selloff in Treasurys on Tuesday and Wednesday drove the yields on the 10-year BX:TMUBMUSD10Y and the 30-year BX:TMUBMUSD30Y to 4.62% and 4.74%, respectively — levels not seen since April 30 — and alarmed investors in the stock market. Bulls in the stock market had been partially depending on the notion that, prior to this week's increase in yields, borrowing costs and, thus, market-based rates, had already peaked. The two-day bond market selloff, which was sparked by this week's poorly received government auctions and remarks from Minneapolis Federal Reserve Bank President Neel Kashkari that seem to keep a Fed rate hike on the table, ended on Wednesday with the Dow Jones Industrial Average DJIA closing at its lowest level since May 2...