Rising Bond Yields May Trigger Stock Market Correction
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: NASDAQ.COM
- Surging Bond Yields: The 30-year Treasury yield reached a 19-year high this week, while the 10-year yield climbed from 4.03% on March 3 to 4.69% last week before easing to around 4.5%, indicating increased volatility in the bond market that could pressure stocks.
- Increased Market Risk: Goldman Sachs warns that rapid increases in bond yields, particularly those exceeding 0.5 percentage points in a month, could lead to negative short-term returns for the S&P 500, thereby heightening the risk of a stock market correction amid slowing economic growth or inflationary pressures.
- Significant Inflation Impact: April's inflation rate surged to 3.8%, the highest since May 2023, leading investors to criticize the Federal Reserve's response to inflation, suggesting it should consider raising its target rate, which could further elevate bond yields and affect stock performance.
- Future Data Monitoring: The upcoming release of the Personal Consumption Expenditures Price Index (PCE) will be a critical indicator; if it surprises to the upside, it may trigger a stock market sell-off as investors seek safe havens, especially with the likelihood of a Fed rate hike in June or July looming.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy GS?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on GS
Wall Street analysts forecast GS stock price to fall
12 Analyst Rating
5 Buy
7 Hold
0 Sell
Moderate Buy
Current: 1008.370
Low
604.00
Averages
951.45
High
1100
Current: 1008.370
Low
604.00
Averages
951.45
High
1100
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Goldman Sachs Predicts Record M&A Activity in 2026
- Strong M&A Activity: Goldman Sachs COO John Waldron stated at the Bernstein Strategic Decisions Conference that M&A activity in 2026 is on track to approach or breach the record set in 2021, indicating a robust market recovery and increased corporate confidence.
- Corporate-Led Market: Waldron highlighted that corporate-led M&A has surged approximately 62% year-over-year, while private equity activity has declined by 4%, marking a significant trend reversal as companies seek to expand their scale within their industries.
- Private Equity Potential: Although the future of private equity M&A remains uncertain, Waldron noted that private equity and venture capital firms hold $1 trillion in dry powder and $4 trillion in embedded portfolio valuations, suggesting that if these funds are deployed, M&A activity could accelerate significantly.
- Goldman's Leading Edge: Goldman Sachs boasts a substantial lead of nearly $300 billion in the M&A advisory league table, the largest lead ever recorded at this point in the year, which is expected to generate substantial fee income and further solidify its market position.
See More
Analysis of Current Best CD Rates
- Current CD Rates: As of May 28, 2026, Marcus by Goldman Sachs offers a 4% APY on its 14-month CD, showcasing competitive rates compared to historical averages, appealing to savers seeking secure investments.
- Rate Trend Analysis: Since the Federal Reserve began cutting rates in 2024, CD rates have been on a downward trend, although several financial institutions still offer competitive rates of 4% APY and above, reflecting a cautious market outlook.
- CD Account Opening Process: The steps to open a CD account include researching rates, selecting an appropriate account, preparing necessary documents, and completing the application, which can often be done online for convenience.
- Future Rate Predictions: While the Federal Reserve has kept rates unchanged in 2026, uncertainty remains regarding future rate movements, prompting savers to consider locking in current higher rates to mitigate potential future declines.
See More
OpenAI Set to File Confidential IPO Soon
- IPO Filing Expected: OpenAI is reportedly set to file a confidential IPO within weeks, with the listing anticipated to be one of the most closely watched tech offerings, potentially targeting September, indicating the company's strategic growth in the AI sector.
- Intensifying Competition: This IPO would position OpenAI ahead of rival Anthropic PBC, which is also planning a public offering later this year or early next, highlighting the intensifying competition in the AI market.
- Valuation Comparison: OpenAI's current valuation stands at $852 billion, while Anthropic recently raised $65 billion, achieving a valuation of $965 billion, surpassing OpenAI, reflecting rapid changes and investor interest in the AI industry.
- Underwriter Negotiations: OpenAI is in talks with banks including Citigroup and JPMorgan, which may join Goldman Sachs and Morgan Stanley in supporting the upcoming IPO, further solidifying its market position and potential for a successful public offering.
See More
Rising Energy Costs Impact Consumer Spending
- Increased Household Spending: Since the onset of the Iran War, the average American household has spent an additional $447.19 on energy costs, cumulatively costing nearly $60 billion, indicating heightened financial pressure on consumers that may lead to more cautious spending and impact economic growth.
- Surging Fuel Prices: Gasoline prices have surged over 47% since March, now averaging $4.39 per gallon, while diesel has risen to $5.52 per gallon, resulting in over $20 billion in additional consumer expenses, further straining household budgets.
- Declining Consumer Confidence: Although consumer spending rose by 0.5% from March to April, stagnant income growth and a personal savings rate that fell to 2.6% suggest that consumers are increasingly relying on credit and savings to maintain spending levels amid inflationary pressures.
- Pessimistic Future Outlook: Goldman Sachs anticipates that rising energy prices will continue to erode consumer purchasing power, particularly affecting lower-income households, which may lead to a further contraction in spending patterns and increase the risk of economic slowdown.
See More
ECB Faces Dilemma Over Interest Rate Hikes Amid Economic Fragility
- Rate Hike Expectations: Markets are pricing in a 91% probability of a 25 basis point rate hike at the ECB's June 11 meeting, raising the key rate to 2.25%, which could tighten credit conditions and impact corporate financing, potentially stifling economic growth.
- Rising Inflation Pressures: Eurozone inflation surged to 3% in April due to rising energy costs from the Iran conflict, increasing pressure on the ECB to adopt tightening measures, despite the economy showing only 0.1% growth.
- Policy Formulation Challenges: The ECB's Vice-President noted the need to balance inflation control with economic growth protection, raising questions about the necessity of rate hikes in the current fragile economic environment.
- Credibility Risks: Economists warn that failure to address inflation promptly could undermine the ECB's credibility, eroding market confidence in its ability to maintain price stability, which would be difficult to restore once lost.
See More
US-Iran Conflict Escalates, Oil Prices Surge Amid Economic Uncertainty
- Escalation of US-Iran Conflict: Following weeks of paused action, the US and Iran have resumed airstrikes, complicating hopes for a permanent resolution to the conflict, which is impacting global oil supplies and market sentiment.
- Strong Stock Market Performance: Despite rising geopolitical tensions, both the S&P 500 and Nasdaq Composite closed at record highs, primarily driven by a surge in AI-related stocks, indicating strong market confidence in the technology sector.
- Oil Price Warning: ExxonMobil has warned that oil inventories are on track to reach dangerously low levels in the coming weeks, forcing prices to spike and curbing demand, reflecting market concerns over energy supply.
- Wealthy Investors Pulling Out: According to the UBS Global Family Office Report, 60% of family offices plan to adjust their investment allocations in the next year, with many reducing US holdings and increasing exposure to emerging markets, highlighting a growing trend of 'de-dollarization'.
See More
Goldman Sachs Predicts Record M&A Activity in 2026
- Strong M&A Activity: Goldman Sachs COO John Waldron stated at the Bernstein Strategic Decisions Conference that M&A activity in 2026 is on track to approach or breach the record set in 2021, indicating a robust market recovery and increased corporate confidence.
- Corporate-Led Market: Waldron highlighted that corporate-led M&A has surged approximately 62% year-over-year, while private equity activity has declined by 4%, marking a significant trend reversal as companies seek to expand their scale within their industries.
- Private Equity Potential: Although the future of private equity M&A remains uncertain, Waldron noted that private equity and venture capital firms hold $1 trillion in dry powder and $4 trillion in embedded portfolio valuations, suggesting that if these funds are deployed, M&A activity could accelerate significantly.
- Goldman's Leading Edge: Goldman Sachs boasts a substantial lead of nearly $300 billion in the M&A advisory league table, the largest lead ever recorded at this point in the year, which is expected to generate substantial fee income and further solidify its market position.
See More
Analysis of Current Best CD Rates
- Current CD Rates: As of May 28, 2026, Marcus by Goldman Sachs offers a 4% APY on its 14-month CD, showcasing competitive rates compared to historical averages, appealing to savers seeking secure investments.
- Rate Trend Analysis: Since the Federal Reserve began cutting rates in 2024, CD rates have been on a downward trend, although several financial institutions still offer competitive rates of 4% APY and above, reflecting a cautious market outlook.
- CD Account Opening Process: The steps to open a CD account include researching rates, selecting an appropriate account, preparing necessary documents, and completing the application, which can often be done online for convenience.
- Future Rate Predictions: While the Federal Reserve has kept rates unchanged in 2026, uncertainty remains regarding future rate movements, prompting savers to consider locking in current higher rates to mitigate potential future declines.
See More
OpenAI Set to File Confidential IPO Soon
- IPO Filing Expected: OpenAI is reportedly set to file a confidential IPO within weeks, with the listing anticipated to be one of the most closely watched tech offerings, potentially targeting September, indicating the company's strategic growth in the AI sector.
- Intensifying Competition: This IPO would position OpenAI ahead of rival Anthropic PBC, which is also planning a public offering later this year or early next, highlighting the intensifying competition in the AI market.
- Valuation Comparison: OpenAI's current valuation stands at $852 billion, while Anthropic recently raised $65 billion, achieving a valuation of $965 billion, surpassing OpenAI, reflecting rapid changes and investor interest in the AI industry.
- Underwriter Negotiations: OpenAI is in talks with banks including Citigroup and JPMorgan, which may join Goldman Sachs and Morgan Stanley in supporting the upcoming IPO, further solidifying its market position and potential for a successful public offering.
See More
Rising Energy Costs Impact Consumer Spending
- Increased Household Spending: Since the onset of the Iran War, the average American household has spent an additional $447.19 on energy costs, cumulatively costing nearly $60 billion, indicating heightened financial pressure on consumers that may lead to more cautious spending and impact economic growth.
- Surging Fuel Prices: Gasoline prices have surged over 47% since March, now averaging $4.39 per gallon, while diesel has risen to $5.52 per gallon, resulting in over $20 billion in additional consumer expenses, further straining household budgets.
- Declining Consumer Confidence: Although consumer spending rose by 0.5% from March to April, stagnant income growth and a personal savings rate that fell to 2.6% suggest that consumers are increasingly relying on credit and savings to maintain spending levels amid inflationary pressures.
- Pessimistic Future Outlook: Goldman Sachs anticipates that rising energy prices will continue to erode consumer purchasing power, particularly affecting lower-income households, which may lead to a further contraction in spending patterns and increase the risk of economic slowdown.
See More
ECB Faces Dilemma Over Interest Rate Hikes Amid Economic Fragility
- Rate Hike Expectations: Markets are pricing in a 91% probability of a 25 basis point rate hike at the ECB's June 11 meeting, raising the key rate to 2.25%, which could tighten credit conditions and impact corporate financing, potentially stifling economic growth.
- Rising Inflation Pressures: Eurozone inflation surged to 3% in April due to rising energy costs from the Iran conflict, increasing pressure on the ECB to adopt tightening measures, despite the economy showing only 0.1% growth.
- Policy Formulation Challenges: The ECB's Vice-President noted the need to balance inflation control with economic growth protection, raising questions about the necessity of rate hikes in the current fragile economic environment.
- Credibility Risks: Economists warn that failure to address inflation promptly could undermine the ECB's credibility, eroding market confidence in its ability to maintain price stability, which would be difficult to restore once lost.
See More
US-Iran Conflict Escalates, Oil Prices Surge Amid Economic Uncertainty
- Escalation of US-Iran Conflict: Following weeks of paused action, the US and Iran have resumed airstrikes, complicating hopes for a permanent resolution to the conflict, which is impacting global oil supplies and market sentiment.
- Strong Stock Market Performance: Despite rising geopolitical tensions, both the S&P 500 and Nasdaq Composite closed at record highs, primarily driven by a surge in AI-related stocks, indicating strong market confidence in the technology sector.
- Oil Price Warning: ExxonMobil has warned that oil inventories are on track to reach dangerously low levels in the coming weeks, forcing prices to spike and curbing demand, reflecting market concerns over energy supply.
- Wealthy Investors Pulling Out: According to the UBS Global Family Office Report, 60% of family offices plan to adjust their investment allocations in the next year, with many reducing US holdings and increasing exposure to emerging markets, highlighting a growing trend of 'de-dollarization'.
See More
