RISE IN 10-YEAR TREASURY YIELD HURTS STOCKS -- TECH IS TAKING THE BIGGEST HIT -- ENERGY IS TOP SECTOR -- BANKS SHOULD BENEFIT FROM HIGHER YIELDS

10-YEAR TREASURY YIELD HITS 3-MONTH HIGH...The steep rise in Treasury yields that started last week continued again today.   Chart 1 shows the 10-Year Treasury yield  climbing 5 basis points today to 1.53%.   That puts the TNX at the highest level in three months.   Yields are being pushed higher by inflation concerns and prospects for a more aggressive Fed to combat that inflation.    Today's jump in yields is pushing stocks lower.

NASDAQ LEADS TODAY'S DECLINE...Rising bond yields usually take a bigger toll on tech stocks, and that's what happening today.   While ten of eleven stock sectors are dropping today, technology is the day's weakest sector.   That's also weighing on the Nasdaq market which is leading the day's decline.    Chart 2 shows the Invesco QQQ Trust undercutting last week's low and trading well below its 50-day moving average.  The S&P 500 is the second weakest stock index.    Chart 3 shows the SPX gapping down today and bearing down on last week's low.  Chart 4 shows the Dow Industrials falling sharply as well.   Both are well below their 50-day averages.

BANKS AND ENERGY STOCKS HOLD UP OKAY...Energy stocks are the day's strongest sector.    That's based mainly on the recent rise in energy prices which makes energy stocks a primary beneficiary of rising inflation.   Chart 5 shows the Energy Sector SPDR (XLE) gaining ground today and trading at a two month high.  Although financial stocks are pulling back today, they're a prime beneficiary of rising bond yields.  That's especially true of banks.   Chart 6 shows the S&P Bank SPDR (KBE) trading modestly lower today after after experiencing a bullish breakout yesterday.  Despite today's pullback, the bank chart still has a positive look to it.