Rising Treasury Yields Pressure Stocks as Bond Market Risks Return

The S&P 500 Index (SPX) is pulling back as the United States 10 Year Treasury Yield (US10Y) moves sharply higher again. The main pressure is coming from the bond market, where the 10-year yield has completely reversed the previous decline created by government bond buying.

The S&P 500 fell 84% and is moving back toward the horizontal trend line created by the previous all-time highs from June 2. That level became support after the August 13 breakout confirmation. If price reaches it, there is a higher probability that it holds for at least a day or two, potentially allowing consolidation or a bounce, but another rise in the 10-year yield could weaken that support.

The Invesco QQQ Trust (QQQ) also fell about 72% and is moving away from its recent two-day consolidation. The better support area is the open gap around $700.70, which also lines up closely with the psychologically important $700 level. That is the area I would watch for a possible near-term bounce.

The VanEck Semiconductor ETF (SMH), meanwhile, gained 31% after holding the top of its longer-term rising parallel channel. Price is trying to move back inside the upward trend that dates to the April 2025 lows. If it succeeds, the next support level inside the channel is the 50% area at $527.13.

The bigger issue is still the 10-year yield. It is back above resistance at 4.687 and has remained above its declining trend line for about five weeks. That is increasingly looking like a bull flag. The next resistance level is 4.809, and the larger pattern could eventually extend toward the 7% area. If yields continue moving higher, that increases pressure on government debt servicing costs and on companies that eventually need to refinance large capital expenditures.

Gold (XAU) held up well despite some selling pressure. Price finished near the previous day’s highs and remained above its prior daily consolidation. The next resistance level is $4,575. Silver (XAG) pushed through 67.99 but has not yet established itself above that level. A daily close above 67.99 would strengthen the breakout and open the door toward $72.70.

West Texas Intermediate Crude Oil (USOIL) has now confirmed its near-term breakout after initially breaking out on August 17 and then moving sideways for two days. The declining trend line around $80.81 now becomes an important support area. If the move continues, $96.44 is the next major resistance level.

Natural Gas (NG) remains extremely volatile, with large wicks in both directions. The outlook remains bullish from these lower levels as fall and winter approach and artificial intelligence data centers increase potential demand for natural gas. Price can still move lower, but the declining trend line at $3.20 remains a potential upside target.

Bitcoin (BTC) continues to rally after breaking above the neckline of its inverse head and shoulders pattern. The measured move target is $76,116, but resistance comes first at $74,175. The daily RSI is already at 80, so Bitcoin is becoming extended. Around $74,000 could become an area where price pauses and consolidates before another attempt toward $76,000.

Coinbase Global Inc. (COIN) is following Bitcoin higher, but the rally stopped at declining trend line resistance with a high of $174.78. A daily close above $174.93 would put Coinbase on breakout watch, with the next important resistance near $191 to $192.

Walmart Inc. (WMT) beat on earnings per share and revenue, but the stock still sold off because guidance was raised less than analysts expected and some revenue included tariff refunds. The daily RSI is down to 29.78, and the first major support area combines the 0.618 Fibonacci retracement around $100.77 or $100.76 with the gap fill at $100.61. That area could produce a bounce back toward the broken parallel channel.

DICK’S Sporting Goods Inc. (DKS) is approaching an important support area around $167.25 ahead of earnings, where two longer-term trend lines converge. A bounce from there could potentially carry price toward $187.28. Lemonade Inc. (LMND) is showing the opposite setup, with repeated tests weakening the bottom of its parallel channel. If that support breaks, $40.49 is the next level to watch, with a possible rebound toward the broken channel around $52.

The market is giving us several clear levels, but the bond market is still setting the tone. With yields rising, Bitcoin extended, metals testing resistance, and major stocks sitting near support, this is a market where patience and confirmation matter more than chasing price.