Wall St Week Ahead US stock market’s powerhouses tested by soaring bond yields

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Surging bond yields are rattling U.S. stocks, and some investors worry the richly valued shares of giant technology and growth companies may be another weak spot.

-- have led broader markets higher this year. As of Tuesday, these stocks accounted for more than 80% of the S&P 500's total return for 2023.

With a collective weighting of 27% in the S&P 500, weakness in the megacaps could further deflate the broader index, now down 6.6% from its July highs, investors said. Year-to-date, the S&P 500 is up over 11%. The yield on the U.S. benchmark 10-year Treasury stands near its highest level in around 16 years on worries that the Federal Reserve willShares of tech and growth companies, which often have significant expected profit growth in the years ahead, tend to be hit particularly hard when yields rise because their future projected earnings are discounted more severely.

- a measure of how much traders expect the shares to gyrate in the near term - recently climbed to 22, the highest since mid-April, according to options analytics service Trade Alert.

 

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