Hawkish Fed risks 10-year yield at 4.25%, a 'danger zone' for stocks

• A hawkish Federal Reserve could push the 10-year U.S. Treasury yield higher, potentially harming stock markets, warns Piper Sandler.
• Piper Sandler's Michael Kantrowitz identifies 4.25% as a critical "line in the sand" for the 10-year yield, beyond which S&P 500 returns tend to turn negative.
• Historically, 10-year yields above 4.25% have correlated with weaker S&P 500 performance and increased equity volatility.
• Investors anticipate a "hawkish cut" from the Fed, expecting a rate reduction today but caution against further near-term cuts.
• A CNBC survey shows 87% expect a Fed rate cut today, though only 45% believe it is actually warranted.

Why It Matters: Fed's hawkish stance could push 10-year yield, potentially harming your stock investments.