The Weekend Edition is pulled from the daily Stansberry Digest.
The signal in the bond market...
The U.S. 30-year Treasury yield traded around 5.18% earlier this week, its highest level since 2007. Meanwhile, the 10-year yield was around 4.67%, its highest level since early 2025.
While the former might grab your attention, the latter likely doesn't sound dramatic on its own...
But consider that on February 27, just before the war in Iran started, the 30-year Treasury was at 4.6%, and the 10-year Treasury was yielding 4%. Both have jumped more than 50 basis points in a little less than three months.
This is just one of two significant signals that we're paying attention to right now...
Both of them highlight the unpredictability in today's market. And both signals could help you protect – and potentially grow – your portfolio... whether the volatility is shorter-term or longer-lasting.
As Ten Stock Trader editor Greg Diamond wrote on May 15, the move in bond yields could lead to a leg lower for stocks...
I want to highlight the U.S. 30-year interest rate, which is much higher this morning...
We're going to keep an eye on the 5.15% level, where we've already gotten a double top. If the 30-year rate breaks above that level again (and it looks like it will), that'll open a floodgate of bond selling (due to interest rates rising). And that, in turn, would weigh on the stock market.
It's a similar story with the shorter-term U.S. 2-year yield. Yesterday, it traded around 4%, up from its prewar 3.5% level.
This is the bond market adjusting to the idea of higher inflation expectations. Bond traders are increasingly betting that the Federal Reserve will raise interest rates, if anything, this year.
When yields rise, bond prices fall, because investors see that existing fixed-income payments are less valuable than newer, higher-yield bonds.
Essentially, the market is re-repricing inflation and/or growth expectations. Inflation is more of a concern today after the conflict over the Strait of Hormuz has tightened oil supply.
So when it comes to rates, the "higher for longer" trade is on.
These Sectors Could Be the Last Dominoes to Fall
The "biggest technical divergence I've ever seen"...
Greg has been tracking a potential top in the market heading into this year. And in Monday's Ten Stock Trader Weekly Market Outlook, he said the final stage of the "topping-out process" is here...
We're facing some of the biggest technical divergence I've ever seen in the market...
Semiconductor and technology stocks are topping, while financial, transportation, and small-cap stocks have already topped out. The S&P 500 and Nasdaq Composite Index may have topped out last week. And elsewhere, bitcoin isn't looking too great... bonds are down... and silver and gold have crashed.
As Greg reminded subscribers, tops tend to play out over time. They're usually a gradual, uneven process. And semiconductors and tech stocks – which have been ripping higher the past few months – could be the last dominoes to fall in 2026.
The "divergence" Greg is talking about is plain to see...
Of the 11 big S&P 500 sectors, only technology has been making new highs over the past few months. That's the second signal we're watching closely today.
Healthcare stocks are down about 7% since a February high. Financials are about 7% below their high from January. Consumer staples are down 5% from a high in February. Materials stocks also topped in February, while industrials peaked in early March.
Consumer-discretionary stocks rebounded in April but last made a high in January... Communications stocks have been essentially flat since last October... Real estate stocks are doing better than most but are just about flat since mid-February.
Utilities have long been a "defensive" play. But these companies have become more AI-oriented in recent years with their ties to data-center and electricity demand... They're down about 5% since a February high.
Then there's the technology sector, which began making new highs last month. It's now up about 40% since the end of March.
It's like the old school exercise: "Which one of these doesn't belong?"
Tech is the outlier. But because it makes up such a large part of the market-cap-weighted S&P 500 Index, the U.S. benchmark has been making new highs.
You can take this a few ways...
If you've owned tech during this recent run, you're probably justifiably pleased with the returns in your portfolio.
Last weekend, I looked at part of my long-term portfolio and saw gains of 300% and 150% in a few positions that had only been up double digits last quarter.
At first glance, that seems great...
But we've seen these types of parabolic moves before. They don't typically end with a whimper. Instead, they often end with the kind of pullback that you regret not selling ahead of later.
The question is... how much of a pullback could be ahead? And when will we see it?
Personally, after looking at my portfolio, I decided to sell around one-third of my biggest gainer because the stock is trading at an excessive valuation right now. I was happy to take profits and raise cash – which I'll likely put to work elsewhere soon.
If you're also sitting on some huge gains in individual positions – in AI and tech stocks in particular – you might want to consider trimming them. We never recommend being "all in" or "all out"... But taking some risk off the table right now might make sense.
Either tech is leading a new phase of this bull market, and the other 10 sectors are simply being left behind... or tech is due for a pullback.
In the second scenario, the tech sector would be the last of the dominoes to fall, taking a lot of short-term gains with it.
In this type of either/or situation, raising cash from big winners can be a good idea...
In his latest monthly issue, Stansberry Innovations Report editor John Engel urged subscribers to sell half of two AI-infrastructure positions that have had substantial rallies.
John hasn't soured on the businesses themselves. But their premiums have become extreme. Both were trading for around 110 times enterprise value ("EV") to earnings before interest, taxes, depreciation, and amortization ("EBITDA"), a measure of profitability.
That's almost 10 times the S&P 500's average EV-to-EBITDA multiple. As John wrote...
To justify a valuation like that while keeping the current share price unchanged, the company's earnings need to rise roughly 6.5 times, or about 550%. In other words, investors aren't simply pricing in strong growth. They're pricing in years of near-flawless execution and a massive expansion in future profitability.
This doesn't mean the underlying business trends are weak. Quite the opposite.
But when stocks become this richly valued, the margin for error narrows considerably. Even strong business performance can disappoint investors if growth merely meets expectations instead of exceeding them.
Knowing how investor psychology influences share prices is one reason we trimmed portions of our positions earlier this year. But disciplined investing also means recognizing when optimism has already become deeply embedded into a stock's price.
Stansberry Innovations Report will record gains of 1,183% and 851%. Kudos to John and the subscribers who followed his advice.
All the best,
Corey McLaughlin
Editor's note: According to Wall Street legend Marc Chaikin, the buy-and-hold playbook that worked for the past 15 years is breaking down. So on May 28, he's joining forces with master trader Jonathan Rose to reveal a new "Smart Money Super-Signal." Built for environments just like this, this signal combines Marc's Power Gauge system with Jonathan's 14 years on the trading floor... And it's designed to show you 10 chances to double your money over the next 12 months.
