Rising Treasury yields are the biggest challenge to Trump’s bull market

Wall Street investors hoping for a traditional Santa Rally to close out the year have been left disappointed so far. Stock index futures suggest continued struggles for equities, following a 1.1% drop in the S&P 500 at the end of last week.

According to economists, 2024 has been a record-setting year for Wall Street. The S&P 500 reached 57 record highs, placing it among the top five years for all-time records. Over the past year, the Nasdaq Composite has gained over 31%, the S&P 500 has climbed 25%, and the Dow Jones Industrial Average has risen a more modest 14%.

However, rising bond yields are presenting challenges for equities. The benchmark 10-year Treasury yield closed last week at its highest level in seven months. Since September, yields have jumped nearly a full percentage point, even after the Federal Reserve cut its benchmark interest rate.