“We believe the S&P 500 is undergoing a normal and healthy digestion of gains that will likely end up as loud noise [a decline of 1 percent to 4.9 percent]but not something worse,” Sam Stovall, chief equity strategist at S&P Capital IQ, said.
Investors, though, should become concerned if rising rates were a response to rising inflation as the Fed would start cutting back its efforts to stimulate the economy.
“Strong economic growth, with little inflation, makes the 1994 comparison with the current situation relevant,” Deutsche Bank strategist Francesco Curto said in an earlier report.
For now, market observers can use the 6% marker as a red signal – Doug Ramsey, chief investment officer at Leuthold Group, found that the negatives outweighed the positive once 10-year Treasuries yielded 6% or higher.
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Max Chen contributed to this article.