Bond Yields Rise as Market Reacts to Higher Rates

U.S. and global stock markets reacted to rising bond yields on Wednesday. The 10-year Treasury note rose to 5.365 percent, and the 30-year note surged to 5.732 percent. Mike Dickson, head of research at Horizon Investments, told CNBC that the narrowing margin for error relates to corporate earnings, even though inflation expectations appear well anchored.

The increase in Treasury yields signals a shift in the cost of capital and valuation metrics for companies. Dickson noted that while the level of yields seems justified, they remain relevant to market stability. The Standard and Poor's 500 finished down 0.22 percent on the day.