When interest rates rise, bonds’ market values decline. Rising yields mean rising borrowing costs for companies, which can hurt their share prices. But it also makes bonds more attractive to income-seeking investors, which can cause stocks to move lower.
Explaining the brutal bond market Such a clear move for longer-term interest rates is resulting from several factors, including concerns about stubborn high inflation , government borrowings and turmoil in Washington. These articles cover various angles behind the sharp declines for bond prices: Maybe it is time to stop worrying and start buying stocks Michael Brush calls the stock market’s reaction to soaring bond yields “a textbook contrarian buy signal.”