JPMorgan names 2 stock categories facing the biggest threat

American banking giant JPMorgan Chase has warned that small-cap and mid-cap stocks face growing pressure from rising 30-year government bond yields. The bank’s strategists, led by Eduardo Lecubarri, said rising long-term yields reflect mounting government debt and budget deficits rather than changes in short-term interest rates alone. JPMorgan’s analysis found that countries with public debt exceeding 100% of GDP and ongoing budget deficits account for approximately 60% of global GDP. Rising Treasury yields threaten smaller stocks by increasing borrowing costs, slowing expansion and pressuring valuations. Higher bond yields also make government debt more attractive relative to equities, weakening demand for smaller companies and their dividend -paying stocks.

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