Historical backtesting by Citigroup's global macro strategy team shows that the absolute level of 5% has limited discriminatory power regarding US stock performance; whether yields are above or below the 55-day moving average is more explanatory. The recent rise in US long-term bond yields has been primarily driven by energy prices, real yields, and central bank policy expectations, with no significant expansion in the US term premium. For US stocks, the speed and trend of the 10-year yield increase are more explanatory than whether it breaks through 5%.
