Stocks have so far survived rising Treasury yields. But that may be about to change.

Equity markets have shown notable resilience even as Treasury yields climb. The reason is straightforward: strong corporate earnings growth has provided a sturdy offset. When profits are expanding, investors can absorb higher discount rates without immediately repricing stocks lower, because the earnings side of valuation is doing the heavy lifting.

That cushion, however, is not unlimited. Rising yields raise the rate at which future corporate cash flows are discounted, which compresses valuations, particularly for longer-duration growth names whose profits are weighted further into the future. Higher yields also lift the return available on bonds, increasing the competition stocks face for investor capital.

What to watch from here is whether earnings growth can keep pace with the move in rates. If profit expansion holds up, the offset remains intact. If yields continue climbing while earnings momentum fades, the support that has carried stocks through this period could weaken — a dynamic worth monitoring across both equity and fixed-income markets.