Bond yields have jumped to their highest levels in decades, posing a risk to shares of companies that are saddled with large amounts of debt, according to Piper Sandler. This week, yields on U.S. government bonds have soared with the economy running hot, high energy prices stirring inflation and futures traders betting the Federal Reserve will raise rates again before the end of the year. The 10-year Treasury note yield touched 5.22% Thursday, its highest since July 2007, while the 30-year Treasury got to 5.50%, a 22-year high. “We continue to see higher rates as THE biggest risk to equity markets in 2026 and 2027,” Piper Sandler analyst Michael Kantrowitz said Thursday in a note to clients. “With spreads already so narrow, corporations are unlikely to receive meaningful additional relief from credit markets.” Higher debt servicing costs or less receptive debt markets could be especially dangerous for public companies in the S & P 1500 index with debt loads above $5 billion, where more than 50% of the debt is coming due over the next five years, according to Piper Sandler. Some of the companies that are potentially vulnerable include Live Nation Entertainment , Ford Motor and Keurig Dr. Pepper . To be sure, several tailwinds could offset the pressures linked to a potential credit crunch, Kantrowitz noted. “Fortunately, strong earnings growth — supported by AI-related investment and improving global PMIs —has provided an important offset. Even so, higher rates for longer will inevitably place greater pressure on some companies, particularly those with elevated leverage or refinancing needs,” the analyst wrote.
