**[Analysis: U.S. Treasury Yields Surge to Nearly 20-Year High, Yet U.S. Stocks Remain Resilient, AI as Key Support]** BlockBeats News, September 27 — Despite the U.S. 10-year Treasury yield rising to its highest level in nearly 20 years, U.S. stocks have remained resilient, with the S&P 500 index showing no significant impact. This divergence has prompted investors to reassess the historical relationship between surging bond yields and stock market trends. Historical data indicates that rising yields do not necessarily lead to stock market declines. In 1994, the Federal Reserve's rate hikes triggered a bond market sell-off, causing the S&P 500 index to initially drop by about 8%, but it later recovered as the economy and corporate earnings remained strong. In 2016, the market interpreted rising yields as a signal of economic recovery and policy normalization, leading both U.S. stocks and Treasury yields to rise simultaneously. In contrast, the Federal Reserve's aggressive rate hikes in 2022 placed pressure on both the bond and stock markets, with the S&P 500 index experiencing a sharp decline. Looking ahead to 2026, U.S. stocks may face a similar scenario where rising yields coexist with resilient economic growth. Large-scale investments by tech companies in AI infrastructure are providing support for the economy and stock market, while the U.S.-Iran agreement driving down oil prices could help ease inflationary pressures. However, pessimistic views suggest that the Federal Reserve may need to continue raising rates until the stock market and overall financial environment are sufficiently constrained. Meghan Swiber, a rate strategist at Bank of America, pointed out that the current performance of the stock market and other risk assets remains strong, and has yet to send a clear signal to the Fed that demand is slowing. [Original Link]