Rising interest rates are beginning to worry investors, but strategists say they still have some room to rise before shaking up stocks.
The quick move-up in bond yields in the past week has spooked some investors, but the equity market could run into more headwinds if yields rise close to another half percentage point, according to Bank of America strategists.
The yield level the strategists say could generate turbulence for stock holdings is 1.75%, still well above Friday's level of 1.31%.
"We think that's the level where correlations between risky assets and rates do begin to change empirically," said Mark Cabana, head of U.S. short rate strategy at Bank of America.
"That is where you see the S&P 500 begin to pay a dividend that is substantially below what the 10-year will offer," he said. "It's going to be a headwind."