As yields spike, U.S. small caps, consumer stocks and housing shares could see pressure

As bond yields rise in the United States, certain segments of the stock market are likely to face increased pressure. The yield on 10-year U.S. Treasury notes has risen sharply this year, and that trend could continue as global central banks move to combat rising inflation. Small-cap stocks, consumer staples companies, and real estate investment trusts (REITs) focused on housing shares may be among the most vulnerable to such rate increases. These sectors often rely on stable cash flows that are particularly sensitive to changes in borrowing costs. The rise in yields can make it more expensi…