The bond market is flexing its muscles again, and equities might be the next to feel the heat. The US 10-year Treasury yield is flirting with the 4.7% mark, a level not seen since April, after a relentless climb of over one percentage point since mid-September. It’s déjà vu for anyone who remembers the sharp equity selloffs in 2022 and 2023 that came alongside similar yield spikes. This time, though, the stock market has been remarkably cool, with just a mild pause in its rally. But that calm could crack if bond yields keep climbing. Goldman Sachs strategists are already flashing warning signs. They’re pointing out that equity and bond yield correlations have flipped negative again—bad news for stocks if yields continue to rise without strong economic data to back them up. The risk of a short-term market correction looks higher, especially if growth numbers disappoint. The spotlight is on long-term rates, which have been the biggest movers as yield curves steepen. It’s not inflation driving this shift but rising real yields—a sign that markets are pricing in fiscal risks and productivity bets rather than inflation fears. The Federal Reserve’s policy trajectory remains a wild card, with the next rate cut not expected until July. Investors are waiting for clarity from the Fed’s minutes, hoping to decode the central bank’s stance in this volatile mix.