Bond investors have been throwing a tantrum for weeks, but the stock market doesn’t seem to be all that fazed by it.

The sell-off battering global bond markets picked up steam late in the week, with yields rising to their highest level in 24 years. The benchmark 10-year US Treasury yield spiked as high as 5.33%, its highest level since 2002. The yield on the 30-year US Treasury reached a 24-year peak earlier this week, ticking up to 5.64% on Thursday.

Meanwhile, US stocks remain close to all-time highs, a divergence that has drawn more attention on Wall Street as the bond market struggles to stem the bleeding.

Major indexes were down slightly on Thursday after gaining earlier in the session, but the S&P 500 is still up nearly 12% year-to-date, and just 2% off of its all-time closing high of 7,798.99 in August. The Nasdaq 100 is still up nearly 20% year to date amid the bond turmoil.

The Vanguard Total Bond Market ETF, meanwhile, is down 5% for the year.

High yields are often thought to be anathema to stocks, as higher rates tighten financial conditions and can pressure risk assets. Yields at 5% or more are thought to be the “danger zone” for equities, and the 10-year yield has remained above that threshold for several weeks.

“The bond market is very strongly trying to send a message with longer duration, and the message is very real,” Mark Malek, the chief investment officer of Siebert Financial, said, adding that the divergence between stocks and bonds is “abnormal” and approaching “extreme” levels.

So, what gives?

1. Bond moves have been orderly (for the most part)

Bond yields have seen a sharp increase in recent weeks, but prior to the recent surge, they climbed more gradually. It took about four and a half months starting in early May for the 10-year Treasury yield to go from 4.5% to 5%.

That steady increase has helped keep stocks buoyant, as investors are able to more easily adjust to the higher rate environment, Kriti Gupta, a global investment strategist at JPMorgan Private Bank, told Business Insider this week.

Gupta said the bank would be more concerned if bonds showed greater volatility, but the sharp increase in yields so far hasn’t been enough to “really start to scare investors.”

“You haven’t necessarily seen it be this shock to the system that previous kind of bond market tantrums have been,” she said of the yields surge.

That flicks at another idea, which is that stocks often do fine in a higher rate environment as long as…

2. Economic growth is holding up

Recent data suggests the economy is still running hot, which has helped keep investors’ spirits high.

The economy is expected to have grown 3.7% in the third quarter, per the latest estimate from the Atlanta Fed’s GDPNow, up from 2.2% in the second quarter.

Economic activity was also estimated to expand at its fastest pace in over five years, according to the latest S&P Global Flash PMI.

In many ways, the rise in rates reflects the bond market’s belief that the US economy is strong enough to withstand higher rates, rather than pure anxiety about inflation or the US deficit.

Long-term inflation expectations remain anchored around 2%-3%, supporting this idea, Rob Haworth, a senior investment strategist at US Bank Asset Management, said.

“The steepening on the curve suggests that the market’s read through to growth is strong and persistent, despite higher yields,” strategists on JPMorgan’s market intelligence team wrote in a note.

3. Earnings have been robust

Earnings optimism — specifically related to the AI trade — has also helped bolster optimism lately and sent mega-cap tech names higher, masking weakness in other areas of the benchmark indexes.

The S&P 500 is on track to notch its third-straight quarter of more than 25% earnings growth, according to the latest estimate from FactSet.

In a recent client note, strategists at JPMorgan pointed to the excitement behind Muse, Meta’s viral consumer AI agent, as the most recent factor supporting equities amid the bond sell-off.

“High dispersion and the timing of the Muse release with other AI headlines further fuel independence price reactions in equities,” strategists wrote on Thursday.

“We think that the stock market and then the economy as well is more resilient to higher rates than they have been in the past,” Gupta added, pointing to the billions mega-cap tech giants have earmarked for AI infrastructure.

Investing pros are mixed on how sustainable the divergence between stocks and bonds is.

JPMorgan’s Gupta said the market looked resilient to higher yields so far, though a big spike in bond volatility could rattle equities.

Malek said he believed stocks would face pressure if yields remained around current levels. He added that he would be watching specifically to see whether the 10-year remained above 5.25% through the end of 2026.

“There will have to be a reckoning, a reconciliation, and you can’t have the bond market and stock market disagreeing so grossly for too long before a winner emerges from the octagon,” he said. “Usually, the winner is the bond market.”

Top economist David Rosenberg also flagged the possibility that higher rates could lead to a stock correction. The permabear pointed to how the median S&P 500 stock was down 15% from its 52-week high, though the index remains near records in the aggregate.

“Everything thinks the stock market has become invincible and impervious to the bond market shock,” he wrote in a client note on Thursday. “Want to guess when we had this condition in the past — the headline oh so very close to a peak but the average stock in correction mode? Try 1929, 1973, and 1999.”