The sharp renewed surge in the U.S. 10-year Treasury yield is bringing back painful memories for many investors. The stock market's surprising resilience suggests investors may not be willing to confront that history head-on. The last time the U.S. 10-year Treasury yield reached such elevated levels, three months later the housing market collapsed and triggered a global financial crisis. The Bull Theory team noted that over the following 16 months, the Nasdaq Composite plunged 56%. Of course, we are absolutely not in the midst of a global financial meltdown right now. It would be far too reckless to conclude that stocks are about to crash simply because Treasury yields have returned to 2007 levels. But the phenomenon deserves close attention, and investors may want to dial back their risk appetite for equities.

As of 7:33:04 a.m. Central Daylight Time, the market was open: the 10-year Treasury yield was quoted at 5.12, up 0.00 (a gain of 0.08%). On Wednesday, the 10-year Treasury yield climbed as high as 5.12%, marking a new high since 2007; the 30-year Treasury yield touched 5.37%, and the 5-year yield also rose to a 2007 high. Rising oil prices combined with business activity data that far exceeded market expectations pushed Treasury yields higher. Together, the two intensified market worries that the Federal Reserve may raise interest rates further. Comments from Fed officials have done little to ease market concerns. New York Federal Reserve President John Williams said on Thursday that it would be reasonable for the Fed to raise rates again before the end of the year to curb inflation. Just on Wednesday, Fed official Barr also stated that continued rate hikes are needed to bring inflation down, and Williams' remarks echoed Barr's view.