Higher Bond Yields Weigh On Valuations But Don't End The Bull Market

Rising oil prices and geopolitical risks, including the Iran conflict, are elevating energy costs and market uncertainty. Despite higher bond yields, strong demand for Treasuries and robust earnings growth have compressed the S&P 500’s forward multiple to 19.5. Consensus expects S&P 500 net profit margins at 14.9% in Q3, supporting a potential multiple expansion if macro headwinds fade. The focus remains on companies deleveraging or generating free cash flow, as these are best positioned for multiple expansion in the current rate environment.

The Trump administration seems undeterred by the recent rise in oil prices, which is resulting in record gas and diesel fuel costs for consumers and businesses at this time of year. I thought the spike would lead to a de-escalation in the