S&P 500 Up 7.4% but Bond Yields Pressure Stocks

In 2026, the S&P 500 has increased by 7.4% year-to-date, with almost a 7% rise since the Iran conflict began in late February. However, rising bond yields, particularly the U.S. 10-year Treasury yielding around 70 basis points higher, have pressured the stock market. The MSCI World Ex USA index is down about 3% from the start of the conflict, having previously shed almost 9%. Bank of America reports fund managers shifted from net 13% overweight equities to net 50% in May, indicating rising allocations despite potential market volatility ahead due to bond yields.