US stocks look stretched compared to Treasuries even after the recent equity selloff. That leaves them vulnerable to more downside as yields rise.
The S&P managed to latch on to a touch of optimism on Monday that tariffs will not be as bad as feared, and staged a 1.8% rally. But stock performance depends not only on their price and valuation, but also on how they relate to Treasuries, given the huge influence from 60/40-style portfolio rebalancing flows.
