Stocks keep shrugging off rising Treasury yields. Here’s the level that could finally trigger a selloff.

The recent resilience of stocks in the face of rising Treasury yields has been notable, with many investors watching to see at what point higher borrowing costs would begin to impact equity markets. According to Strategas, the key level to watch is when the 10-year Treasury yield reaches around 5%, a level that could finally trigger a selloff in stocks. This is because, historically, when yields have risen above this threshold, investors have begun to reassess the attractiveness of equities relative to fixed-income assets.

For now, the stock market has been shrugging off yield increases, likely due to the strong earnings reports and economic data that have been driving investor sentiment. However, as yields continue to climb, investors will increasingly need to consider the potential impact on corporate profits and the overall economy. The Strategas call suggests that investors are not yet pricing in the potential risks associated with higher yields, and that a 5% yield on the 10-year Treasury could be a catalyst for a market re-evaluation.

Looking ahead, brokers should keep a close eye on the 10-year Treasury yield and its potential impact on stock market sentiment. If yields continue to rise and approach the 5% level, investors may begin to rotate out of equities and into fixed-income assets, leading to a selloff in stocks. Conversely, if yields stabilize or decline, the current market momentum may continue, at least in the short term. Either way, understanding the relationship between yields and stock market performance will be crucial for brokers looking to navigate the current market landscape.

Originally reported by marketwatch.com. BrokerNews adds analysis for finance & markets readers.