BlockBeats News, May 19th, as the U.S. Treasury yield continued to rise, several large Wall Street asset management institutions began to warn that the "divergence" between the stock market and the bond market is intensifying, and the market may face a pullback risk.

Reports indicate that since April, AI and tech stocks have driven the S&P 500 to continuously hit new highs. However, at the same time, U.S. Treasury bonds have faced continuous selling pressure, with the 10-year Treasury yield rising to a more than one-year high. The market is concerned that the Middle East conflict and high oil prices will re-ignite inflation and force the Fed to maintain a tight monetary policy.

Vincent Mortier, Chief Investment Officer of Eastspring Investments, said, "A stock market pullback is only a matter of time, not a question of if it will happen." He pointed out that the current market sentiment, narrative, and positioning have undergone a "complete reversal" in just six weeks.

Data shows that since the ceasefire news, the S&P 500 has risen by 12%. However, the one-year inflation swap rate has broken above 4% for the first time since 2025, indicating that the bond market is repricing the inflation risk.

Raphaël Thuin, Head of Strategy at Tikehau Capital, said that currently, the "stock market keeps hitting new highs, credit spreads are narrowing, and the market is extremely bullish," but the energy and interest rate markets are pricing in long-term economic impacts, leading to an "irreconcilable contradiction" between the two.

However, some institutions believe that corporate earnings are still supporting the stock market. Giles Parkinson, Stock Manager at Trinity Bridge, said that current corporate earnings are "exploding," and the logic of the market rally is not over yet. A senior asset management executive summarized that the bond market has issued a "yellow alert" on high oil prices and persistent inflation, while the stock market chooses to continue betting on optimistic expectations, stating that "the market will continue to party until a real disaster strikes."