Rising bond yields give stock-market investors the yips. Watch these levels.

President Donald Trump ended the week on a grumpy note, rattling his tariff saber — and stock-market investors — on Friday as he threatened levies on Apple Inc. and the European Union. But for all the renewed trade drama, it was moves in the bond market that have been the center of attention.

Specifically, it was a sharp move higher this week in the yield on the 30-year Treasury bond BX:TMUBMUSD30Y, which on Thursday hit 5.15%, just shy of its intraday high from October 2023 near 5.17%, before falling back, that was front and center. It ended Friday at 5.036%, up 14.1 basis points for the week and has risen nearly 30 basis points over the last four weeks, according to Dow Jones Market Data. Yields and bond prices move opposite each other.

The S&P 500 SPX on Tuesday snapped a six-day winning streak, falling for the next four sessions to log a 2.6% weekly decline, its steepest since the week ended April 4. The Dow Jones Industrial Average DJIA dropped 2.5% for the week.

Wary investors fear yields are rising to levels that could spell further pain for stocks and other assets.

The rise was tied to jitters around Trump-backed tax and spending legislation, which he has dubbed the “big, beautiful bill,” which eked out passage by a single vote this week. The bill is seen adding to a deficit that was already causing agita, with its passage coming just after Moody’s last Friday stripped the U.S. of its last triple-A credit rating, citing expectations U.S. deficits and interest payments on existing debt are sure to continue rising in the years ahead after decades of fiscal neglect.

A poorly received 20-year U.S. Treasury bond auction on Wednesday amplified the concerns on Wednesday, highlighting worries over demand in the face of rising supply. The jump in Treasury yields spilled over to stocks, leaving major indexes sharply lower.

“Bond investors worry about Trump’s ‘big, beautiful’ tax bill and the impact it will have on the U.S. overall deficit. You should too,” said Giuseppe Sette, co-founder and president of AI market research firm Reflexivity, in an email.

He acknowledged that investors have largely looked past burgeoning deficits and other fiscal concerns for years, but warned of a potential inflection point that could reinvigorate the so-called bond-market vigilantes who have from time to time exercised de facto veto power over profligate governments.

“Markets are a matter of alternative, they are inherently cross-sectional and cross-asset. When the longer bonds start to look like 5% yield with modest inflation two things can happen — greedy investors reassess their equity position to get more fixed income carry, and spooked investors reassess their equity position to go into cash,” Sette wrote.

“Either way, equity positions stand out in the current environment. And if equity goes down, so do most other risk markets — commodities, crypto, high-yield currencies.”

10-year Treasury note BX:TMUBMUSD10Y yields also rose, pushing above 4.60% — the highest since mid-February — before pulling back to end the week at 4.508%. The yield rose 7.1 basis points for the week and more than 24 basis points over the last four weeks.

A 10-year yield above 4.5% has historically been a problem for investor sentiment, said Larry Adam, chief investment officer at Raymond James, in a Friday note, observing that the level also coincides with a 7% 30-year mortgage rate, which could put additional strain on housing demand and activity in the broader economy.

Moreover, stock-market valuations tend to move inversely to interest rates, with the S&P 500’s price-to-earnings ratio struggling to expand, or even contracting, when the 10-year yield moves above 4.5%.

“A move toward 4.75% would be even more concerning, as equities have typically underperformed at that level,” he wrote. “Taken together — with rising yields and the likelihood of further downward in consensus EPS estimates — we believe our more cautious stance on equities is justified.”

The rise in real, or inflation-adjusted, longtime yields was also raising concern because it’s coming at the same time economists are marking down expectations for economic growth. “This is new, and much more concerning than in past yield spikes linked to strong growth” and perceptions that the Federal Reserve would be inclined toward tightening monetary policy, noted economist Jens Nordvig, founder of Exante Data, in a LinkedIn post earlier this week.

That would imply that bond investors are growing increasingly uncomfortable with the fiscal situation in the U.S. and the lack of political will in Washington to take steps to reduce the debt.

Rising long-term yields weren’t just a U.S. phenomenon. Long-term Japanese yields also surged. The move shows the bond-vigilante phenomenon isn’t confined to the U.S.

Read: Bond ‘vigilantes’ are sending warnings globally. What does that mean for your portfolio?

“Duration risk is going global, fiscal complacency is being repriced in real time, and the illusion of harmony between stocks and rates is starting to fracture,” Stephen Innes, a managing partner at SPI Asset Management, said in a Tuesday note that captured the mood.

By the end of the week, U.S. as well as Japanese yields, had moved off their earlier highs. For some investors, the spike was noteworthy, but not sufficient to ring alarm bells.

Veteran technical analyst Mark Arbeter of Arbeter Investments, found it curious that investors and financial media were paying such close attention to the 30-year bond when the yield on the 10-year Treasury note is much more closely followed and relevant to economic activity.

“Maybe because it got above 5% before the 10-year did, that would be my guess,” he said, in a phone interview.

Arbeter argued that the move in the 30-year didn’t yet qualify as a technical breakout. That would take a move back above the late 2023 high over 5.15%. If a sustained breakout too place it could take the yield to the 6% to 6.4% range.

That would also mean a big rise in the 10-year yield. For stocks, however, the key would be less the level than the speed of the move, Arbeter said.

“If it’s a slow, steady grind higher, that’s OK, the stock market can digest that type of move in yields,” he said. “If we wake up tomorrow and yields are up 20 or 30 basis points and the velocity of yields increases, then the market’s going to have a problem.”

—Joseph Adinolfi contributed to this article.