US 10 year benchmark bonds finished September 15 at a level not seen in nearly two decades, ending the session above 5%. Real yields on these Treasuries climbed to 2.66%, marking a post 2008 peak. Historically, the S&P 500 has exhibited weaker performance when the 10 year yield maintains a 5% handle.

A further climb above 5.25% increases the probability of stocks and bonds falling simultaneously, with their positive correlation jumping to approximately 64%. This correlation can reach as high as 100% if yields exceed 5.5%. Despite the surge, Treasuries are not currently oversold and remain aligned with their long term mean on an annual growth basis.