When US Yields Rise, Markets Think Twice📈

Rising US bond yields act like a magnet for global capital. Higher yields mean safer returns in dollar assets, so FIIs start pulling money out of equities, especially emerging markets like India. Liquidity tightens, valuations come under pressure, and equity markets lose momentum. It’s not just about fear, it’s about opportunity cost. When risk-free returns rise, the appetite for risk falls. In simple terms: the higher the US yields, the tougher it gets for equity markets to rally.