DataTrek: "Higher for longer" will not pose a threat to further upward movement in US stocks.

The two-year Treasury yield in the United States has been stable at around 3.5% - 5% for about two years, currently at 4.36%, an increase of 2.56% since the beginning of the year. DataTrek analysts Nicholas and Jessica Rabe expressed that this is the most sensitive part of the yield curve to market views on future Federal Reserve policy. During this period, the S&P 500 index has risen by at least 50%, indicating that higher interest rates will not pose a threat to further stock market gains. In 2022, the two-year US Treasury yield rose by 363 basis points to 4.41%, the S&P 500 index fell by 18.4%, the MSCI Europe index fell by 18.3%, the MSCI Japan index fell by 18.7%, and the Emerging Markets index fell by 22.4%. In 2023, the two-year US Treasury yield fell by 18 basis points to 4.23%, the S&P 500 index rose by 24.2%, the MSCI Europe index rose by 15.8%, the MSCI Japan index rose by 17.8%, and the Emerging Markets index rose by 6.1%. So far, the two-year US Treasury yield has risen by 9 basis points to 4.32%, the S&P 500 index has risen by 24.4%, the MSCI Europe index has fallen by 2.1%, the MSCI Japan index has risen by 3.2%, and the Emerging Markets index has risen by 5.1%.