US Treasury reaches 4.7%

The yield on the 10-year US Treasury note has climbed to 4.7%, reaching levels that jeopardize the stability of risk asset valuations globally.

August 20, 2026  |  3 min read

This rally is a response to a combination of fiscal and monetary factors in Washington. The persistence of a high public deficit and the upward revision of inflation expectations for the end of 2026 have forced investors to demand a higher risk premium. The Federal Reserve maintains a high-interest-rate stance to curb consumption, consolidating the yield curve at levels not seen in the last three years.

The reaction from equity markets was immediate, with significant corrections in technology indices, especially the Nasdaq. Companies linked to the development and implementation of artificial intelligence, whose valuations depend on future cash flows discounted at current rates, suffer the greatest impact. Volatility has spread to European sovereign debt markets, where risk premiums for countries on the Eurozone periphery have begun to experience tension due to the contagion effect and capital outflows toward dollar-denominated assets.

Portfolio Rebalancing and Financial Costs

This 4.7% surge in US debt alters the opportunity cost for large institutional investors and private equity funds. Fixed income is once again competing aggressively with equities for global capital, draining liquidity from tech growth sectors. For major Spanish companies with a presence in the United States or expansion plans in the artificial intelligence sector, this scenario increases debt servicing costs and hampers access to cheap financing for long-term R&D projects. Tightening financial conditions force a revision of strategic plans that rely on intensive leverage.

For subsidiaries of IBEX 35 companies in US territory, the dollar strengthening derived from these yields offers a competitive advantage in profit repatriation. However, this advantage is offset by rising input costs and pressure on the exchange rate, which makes imports of critical technological components more expensive. Construction and energy companies with concessions and infrastructure in the US must closely monitor their interest rate hedges, as maintaining high yields for a prolonged period erodes the operating margins of capital-intensive assets.

The Spanish technology sector, while having less direct exposure than the American one, faces a “flight to quality” phase by investors. The window of opportunity for IPOs or large-scale funding rounds is narrowing. The market now prioritizes immediate cash generation and balance sheet strength over promises of disruptive growth. Financial management must prioritize liquidity management and consider using hedging instruments to mitigate the exchange rate and interest rate volatility that will mark the final stretch of the fiscal year.