US Bull Market Hits Four-Year Anniversary as Rising Treasury Yields Threaten Tech-Led Rally

The Quick Take

• The current US bull market reaches its four-year milestone, driven primarily by technology sector outperformance
• Rising Treasury yields represent the primary headwind that could derail the equity rally at this stage
• Technology has been the consistent answer to bull-market positioning questions throughout the four-year run

The current US equity bull market, which began in October 2022 following the Fed tightening peak, crosses its four-year anniversary with technology stocks remaining the dominant driver. Large-cap tech names including the Magnificent 7 cohort have compounded at multiples of the broader market during this cycle, underpinned by AI monetization narratives and strong cash generation. At this stage of a bull market cycle, breadth typically matters more than it did at the start: a narrowing of leadership to fewer names while bond yields rise is the classic late-cycle warning pattern.

Rising Treasury yields affect equities through two channels: the discount-rate mechanism that compresses long-duration growth stock multiples, and the portfolio rotation dynamic where risk-free 5% yields attract capital away from equities. For tech sector investors, the dual threat is that higher rates simultaneously reduce the present value of future earnings and create viable alternatives for income-seeking capital. Rate-sensitive small and mid-cap growth names face the most acute pressure, while mega-cap tech with strong near-term cash flows has more insulation. Value and dividend sectors may see relative rerating if yields sustain.

Watch the Fed's next rate signal and the 10-year Treasury yield for the key pivot points. If the 10-year crosses and holds above 4.5%, historical data suggests meaningful multiple compression for high-P/E technology names. The macro variable that determines whether the four-year bull market extends or reverses is the labor market: a resilient jobs picture keeps consumer spending and corporate earnings strong enough to offset the yield headwind. A sharp deterioration in nonfarm payroll data or unemployment claims would challenge the soft-landing thesis underpinning equity valuations.

Synthesized from 1 source.