September Slump: Stock Market's Bond Yield Concerns and Challenging Times Ahead

The recent stumble in the stock market is not only due to rising bond yields but also revisions to S&P 500 earnings forecasts. Wall Street analysts have been lowering their estimates for third and fourth-quarter earnings, erasing previous upside revisions. This shift in sentiment may have played a role in the recent selloff. Many trading algorithms use earnings forecast revisions as an input, and further cuts are expected in the week ahead. Despite the climb in Treasury bond yields, U.S. stocks ended higher on Monday.