Alarm sounding! The 30-year US Treasury yield is once again approaching the 5% warning line—how much longer can the US stock market's celebration last?

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Global stock markets are near historical highs, but warning signals from the bond market are becoming increasingly clear.

The yield on the 30-year US Treasury has returned above the 5% mark, and with oil prices staying high, the divergence between stocks and bonds is intensifying, significantly increasing the risk of short-term market volatility. According to Xinhua News Agency, US President Trump stated on social media that he will suspend the “freedom plan” to “escort” ships through the Strait of Hormuz. Although this stance has temporarily calmed market sentiment, some analysts point out that the longer the conflict lasts, the greater the risk that oil prices will transmit to inflation.

Faced with the key 5% mark, the team led by Bank of America strategist Michael Hartnett refers to it as the “Maginot Line.” They believe this level will not be breached because the US government is striving to maintain demand for Treasuries, while trying to suppress the dollar and curb declining approval ratings. However, the team also warns: Once this line is lost, the door to crisis will begin to open.

Goldman Sachs partner Richard Privorotsky expressed a similarly cautious attitude—he observed that the yield curve has been fully breached, and long-term Treasury ETFs even experienced a dramatic swing of minus three standard deviations. “That keeps me alert,” he said, “Historically, the restraining effect of interest rates on stock market gains far exceeds that of oil prices.”

Rising Interest Rates and Market Divergence: An Untested Challenge

The market has fully absorbed expectations that the Federal Reserve will keep rates unchanged for the next year. Europe is more severe: the market is pricing in three rate hikes each from the European Central Bank and the Bank of England over the same period.

This macro environment (high interest rates + high oil prices) has dramatically different effects on various types of stocks. High oil prices directly benefit energy stocks; AI concept stocks, due to strong industry trends and rapid profit growth, are able to offset valuation pressures from high rates. But consumer stocks face a double blow—higher rates raise mortgage costs, high oil prices squeeze disposable income, leading to declining demand. As a result, funds are pulling out of consumer stocks and pouring into the energy and AI sectors, causing gains to be highly concentrated in just a few stocks.

This structural divergence is a double-edged sword: either the rally expands from a few sectors to the entire market, pushing the major indices higher; or the leading sectors suddenly collapse, dragging down the whole market.

Special caution is needed because the current rally is largely driven by “forced momentum”—including mandatory institutional buying, systematic inflows into index funds, and short-sellers continuously covering and stopping losses. Meanwhile, interest rates keep rising and signs of increasingly feverish market sentiment are spreading.

The stock market has not yet responded significantly to these changes. But as bond market volatility increases and key interest rate levels are repeatedly breached, this divergence between stock prices and rates has rarely lasted long in history. As Goldman Sachs partner Privorotsky admits, his model “most likely hasn't been calibrated for the current environment.” When AI investment exerts an extraordinary pull on GDP growth, traditional leading economic indicators are becoming increasingly unreliable.

Risk Warning and Disclaimer ClauseThe market comes with risks; investments require caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their particular situation. Investment decisions made based on this content are at your own risk. ```