Barclays says higher bond yields are weighing on equities
Barclays said rising bond yields are reducing equities’ relative appeal, even as resilient earnings and AI-related growth continue to support stocks.
Barclays said higher bond yields are making equities less attractive, with the extra return investors expect from stocks over bonds near multidecade lows. Rising yields increase the return available from bonds and narrow the relative appeal of stocks, Barclays said. The bank said resilient corporate earnings and AI-driven growth continue to support equities. Barclays said oil above $100 adds pressure to an already difficult market backdrop.
It also said renewed central-bank tightening could further test stock valuations. Barclays remains overweight equities but expects volatility ahead of Q3 earnings.