US Stocks Face Tests from Bond Yields and Midterms

US stocks enter the fourth quarter facing headwinds from soaring bond yields and upcoming midterm elections. While historical trends favor year-end gains, analysts note that rising interest rates and AI spending pressures could challenge market resilience.

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An New York Stock Exchange (NYSE) logo on a door at the NYSE in New York City, US, September 29, 2026. REUTERS/Jeenah Moon/File Photo

United States stocks face a fourth-quarter test as surging bond yields and heavy artificial intelligence spending threaten typical seasonal gains. The benchmark S&P 500 rose nearly 13% through Friday, sitting 1% below its mid-August record high. Investors now weigh upcoming corporate earnings and the November midterm elections against escalating borrowing costs.

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