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Everyone's quoting the same stat right now: bond yields haven't been this high since 2007. And the silent part people are saying out loud in their heads is GFC 2.0.

It couldn't be further from the truth.

Over the past three years, the US10Y has traded in a 3.6%–5% range. Each time yields have spiked like this over that time period, the narrative has been the same: for one reason or another, demand will dry up and yields will wreck stocks.

That call has been wrong every single time.

Here's why I don't think this time is different.

We have an aging population globally, including U.S. baby boomers, many of whom have been waiting years for yields at these levels. Eventually, yields get attractive enough to pull in retirees and pensions that need to hit specific return targets. Maybe that demand doesn’t come immediately, but the buyers representing that demand haven’t gone away.

Above 5% is where stocks get a real test — multiple percentage points on the line for the major indices. But once yields clear 5%, that's exactly where I'd expect boomers and pensions — as well as algos — to step in and buy bonds aggressively, putting a lid on rates.

There's a lot more under the hood on why yields look like this — that's a topic for another day, but a few of the influences at play:

Since mid-2026, the AI build-out — chips, data centers, the works — has increasingly leaned on the debt market to fund itself. That's a direct line from yields to semis: the higher yields go, the more expensive that debt gets, and the less of it companies will take on. Less debt-financed spending means a slower drip of revenue into the semiconductor cohort.

To be clear — this isn't money that disappears. It's money that arrives on a longer timeline. But it's worth watching semis as a pressure point if yields keep climbing, since that sector's growth story has become more levered to financing conditions than most.

With this context, it should be no surprise that the SMH — semiconductor ETF — was Tuesday’s worst performing industry, down -4.31%.

If 2007 didn't carry the GFC association, revisiting that yield level wouldn't feel nearly as scary.

Here's why the comp is nonsense: yields were falling into the GFC, and they collapsed once it hit. That's because investors were piling into bonds to hedge against a coming recession. When Lehman went under, everyone rushed into bonds to lock in a risk-free rate as a brutal recession unfolded (circled).

So today's setup isn't projecting anything catastrophic — it reflects a market dynamic that's been shifting since COVID. That doesn't mean further upside in yields is pain-free. It means the 2007 doomsaying needs to come down a few decibels.

Yes, this is worth watching. But it doesn't fit the 2007 playbook — in fact, the concern today is the opposite. Back then, it was a subprime-driven recession fear, and Lehman was the trigger that took it from bad to worse. This time, it's an inflation concern, and oil looks like the dog wagging the tail.

Although I cannot find the chart, CNBC reported the spike in oil and yields happened overnight on the release of shipping data out of the Strait of Hormuz declining further. However, what you see above sends the message clearly: as energy stocks move higher (implying energy inflation is a concern), bond prices move lower (meaning yields are higher).

Assuming no breakthrough on Iran/oil: we grind toward 5% on the US10Y, find buyers there, and — even if it takes some time — trickle lower. From there, we re-evaluate the data: weak payrolls, in-line inflation, and a growth scare pulling yields back off the highs.

A growth scare looks like rotation into defensives — healthcare, utilities, staples — out of growth areas — technology, discretionary, financials.

This is approximately what happened in 2023 and 2025, which ended up being the best buying opportunities of those years.