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Reuters

With war risk, unclear how much U.S. real-yield collapse will benefit stocks

NEW YORK (Reuters) -Real yields in the U.S. Treasury market have gone even more negative as inflation surged, which is typically viewed as a positive factor for stocks, but Russia’s invasion of Ukraine has placed more emphasis on shedding risk than on the possibility of getting higher returns on Wall Street. The decline in benchmark U.S. real yields, which have been mainly below zero since 2019, suggested that investors are piling into TIPS because of concerns about high inflation. U.S. stocks, even with a strong earnings outlook and backed by a robust economy, may not be the best asset to hold during this geopolitical crisis, analysts said, though there was some divide in views.

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