By Lenore Elle Hawkins via

This week the yield of the 10-year Treasury reached over 3.12%, a level not seen since 2011 and the 2-year rose over 2.5%, to levels last seen in 2008. The spread between the 2-year (2.573%) and the 30-year Treasury yield (3.246%) remains near multi-year lows.

With the market pricing in a more than 50% likelihood of three additional 25 basis point rate hikes by the end of the year, up from 33% just a month ago, the potential for an inverted yield curve in 2018 is a material possibility. Looking at the charts for the 10-year, the next potential upside targets are around 3.75% and 4.0%, the peaks formed from 2011 to 2010.

The rising yields are a headwind to rate sensitive sectors such as real estate and utilities, causing the iShares US Real Estate ETF (IYR) to fall -3.5% over the prior five trading days as of Thursday close and the Dow Jones All Equity All REIT Index (REI) lost 3.0%.

The Utilities Select Sector SPDR ETF (XLU) was the second worst performer, down -2.6%. While the rate sensitive shares were punished, growth stocks were back in fashion as the iShares Nasdaq Biotechnology ETF (IBB) gained 3.7% for the week, followed by the Energy Select Sector SPDR (XLE), up 2.8%.

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