Survey shows 10-year US Treasury yield is approaching the threshold that could trigger a stock market correction

The latest Markets Pulse survey shows that the ongoing bond sell-off is pushing U.S. Treasury yields closer to levels that could trigger a significant blow to the stock market. Among the 122 institutional respondents surveyed, about 30% said that a 10-year yield reaching 5% to 5.25% would be enough to cause a 10% drop from the stock market peak, which meets the definition of a correction; 22% believe the threshold is slightly higher, at 5.25% to 5.5%. The benchmark 10-year yield climbed above 4.96% on Thursday, hitting a three-year high, as the conflict sparked by Trump in the Middle East pushed oil prices well above $100 per barrel, intensifying worries over inflation shocks and the Federal Reserve's response. Joseph Brusuelas, chief economist at RSM, said, “People may feel we are on the verge of the long-awaited stock market correction, as actual data and central bank policy are providing risk-preferring investors with a strong dose of reality.”