S&P 500: How are higher yields weighing on equities? – Deutsche Bank

US Treasuries sold off and US equities came under pressure after strong US CPI figures and hawkish Fed remarks, according to Deutsche Bank analysts. As investors factored in faster rate hikes, the S&P 500 declined, with Tech and AI-linked stocks initially lagging. Futures subsequently found support from CoreWeave’s better-than-expected revenue and raised guidance, indicating some recovery in the S&P 500.

How is the rates shock weighing on US stocks?

"In fact, the 2yr Treasury yield (+17.6bps) saw its biggest daily jump since April 2025, surging to 4.74%, and markets even priced a modest chance of a 50bp Fed hike in December."

"So it was a very rough day for rates, and that in turn put renewed pressure on equities, with the S&P 500 (-0.38%) pulling back as investors priced in faster hikes."

"With markets pricing in a more hawkish Fed, that also drove a fresh selloff in US equities, though this did ease a bit as the session went on."

"Tech stocks underperformed, with a -5.47% drop in Nvidia leading the Nasdaq (-0.74%) and the Mag-7 (-0.83%) to larger declines than the S&P 500 (-0.38%)."

"After the close, we then heard from CoreWeave, which delivered a Q3 revenue beat ($3.66bn vs $3.56bn est.) and upgraded its full-year revenue guidance ($13.0-13.3bn vs $12.9bn est.)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)