Spiking yields are spooking the stock market. These equities win when rates rise

As investors weigh an environment of spiking bond yields, Piper Sandler came up with a list of stocks that could benefit from elevated interest rates. Higher bond yields are now a major risk to the stock market, in a way that they weren't just a short time ago. The rate on the U.S. 10-year Treasury was last sitting at 4.59%, while the longer-dated 30-year Treasury yield traded at 5.12%. Just a day earlier, the 30-year yield crested above 5.19%, its highest level since July 2007. For the most part, stocks have so far been able to shrug off concerns of higher interest rates, as a strong fundamental backdrop should help companies deal with greater pricing pressures. The S & P 500 was last higher Wednesday, on pace to snap a three-day string of losses. The prospect of AI-driven earnings from Nvidia after the close also boosted the major averages. But higher yields could dent any progress on the broadening in the market, and they could limit the stock market's advance going forward. "We continue to believe—and observe—that the macro and fundamental backdrop is strengthening and broadening," Michael Kantrowitz wrote on Wednesday. "However, higher oil prices and interest rates have crushed the broadening trade since February 27, as higher equity risk premiums (ERPs) have offset broader EPS revisions and growth." "We will need to see rates decline to return to a broader equity market—and, at this point, to see any meaningful index gains from here," he said. …