The U.S. 10-year Treasury yield climbed from 3.97% to 4.30%, resetting the global risk-free benchmark and squeezing valuations on growth-oriented equities worldwide.1
The effect is sharpest in technology. Okta, a U.S.-listed cybersecurity firm, has fallen 65.3% over five years and 35% over the past year — despite a 22.9% monthly rebound.1 Higher yields lift the discount rate applied to future cash flows, compressing present values for SaaS and software businesses that trade on long-duration earnings.
The same dynamic is felt in tech-heavy markets globally. Indices in South Korea, Taiwan, and Germany — all with significant semiconductor and software exposure — have faced parallel pressure as dollar yields rise and capital reprices risk accordingly.
Banks are the mirror image. JPMorgan Chase returned 129.1% over three years and 107.7% over five years.1 Rising rates widen net interest margins — the spread between loan income and deposit costs — boosting profitability without operational change. European and Asian banks with large loan books have seen similar tailwinds in their domestic markets.
The 30-year U.S. mortgage benchmark moved from 6.0% to 6.3%, signalling that rate pressure is now flowing into housing and consumer credit.1 For emerging economies carrying dollar-denominated debt, a sustained high-yield environment in the U.S. also tightens external financing conditions.
At 4.30%, the U.S. risk-free rate competes directly with equity risk premiums. Technology stocks trading at 10x or more forward revenue face the steepest corrections when discount rates rise. Banks, energy companies, and value sectors do not.
The pattern mirrors the 2022 Federal Reserve tightening cycle, which sent global growth stocks down 40–70%. The current move is narrower but directionally identical. Until the 10-year yield retreats well below 4%, the valuation gap between growth and value is unlikely to close.
