Fundstrat’s Tom Lee warns a 6% 10-year Treasury yield would pressure stocks

Fundstrat strategist Tom Lee has drawn a line in the bond market. A 10-year Treasury yield of 5% is something stocks can live with, in his view. A yield of 6% is a different story. Lee warned that a move to 6% would put significant pressure on stock valuations. According to the research findings, the yield climbed above 5% in mid-September and reached around 5.3% in early October 2026. Why 6% is the number that matters Lee framed the problem as competition. When a government bond pays a high, near-guaranteed return, stocks have to offer a lot more to justify the extra risk. A 6% yield on the 10-year Treasury would create “much more competition for equities,” Lee said. At 5%, Lee sees the math still working for equities, provided earnings stay strong. Third-quarter earnings are tracking near 29% growth, by Lee’s count. He also highlighted rising S&P 500 earnings estimates for 2027. The 10-year hit 5.04% on September 15, 2026, around the time yields reached their highest level since 2007. How yields got here The climb followed the Federal Reserve’s first rate hike since 2023. That move set the Fed’s target range at 3.75%-4.00%. Lee is not alone in watching the 6% level. Economist...