There's a new stock market story in town: Strength in the U.S. economy is morphing into a yield story.
It's not that surprising. What is surprising is that it took so long to develop. Some have been waiting for years for rates to rise.
What's up with these rising yields?
1. Very strong U.S. economic data have been building for a while, but the September ISM Services Report on Wednesday caused 10-year yields to shoot up from about 3.08 percent to a high of 3.18 percent before easing back down. Thursday's data on August factory orders showed the largest increase in 11 years.
2. The Federal Reserve is signaling higher rates. Chairman Jerome Powell recently said, "very accommodative policy is no longer appropriate in the current environment."
3. Trade fears are subsiding. Yields have been on a modest upswing since trade fears began subsiding in early September.
To a certain extent, higher yields are already affecting the stock market. Interest-rate-sensitive sectors have been generally down for the past month even as the broader markets have hit new highs.