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Valuation Trauma Is Refusing to End for S&P 500 in Free Fall

  • US high-grade bond yields closing in on stocks’ earnings yield
  • Fixed-income better positioned to weather downturn: Tchir

The stock market: buckling under the hottest inflation since 1981, battered by a historically aggressive bid to break it. Making matters worse is that bonds are beckoning as well.

American equities plunged to the worst week since January after data showed US price pressures hit a fresh 40-year high in May, squashing hopes inflation had peaked. Treasury yields soared to levels last seen in 2008 as traders braced for the possibility that the Federal Reserve will raise interest rates by 75 basis points next month after executing the first half-point hike since 2000.