Why Treasury Yields Are a Red Flag for the Market

Samantha LaDuc: Rising Treasury Yields Could Be a Warning Sign for Stocks in 2026

Samantha LaDuc, founder of LaDucTrading, was among the market strategists who correctly anticipated this year’s S&P 500 trajectory — a sharp selloff followed by a strong rebound.

A veteran trader since 2008, LaDuc warned clients in early December 2024 that equities were heading for a “bloodbath,” forecasting a roughly 20% decline in the first half of 2025. Her view was based on tariffs not being priced in and a weakening U.S. dollar. The equity pullback arrived on Liberation Day, while the dollar has yet to recover from its early-year slump.

In a recent MarketWatch interview, LaDuc said she turned bullish around April 9, projecting an upside target of “hellbent on 6,666” for the S&P 500. By June, she outlined two potential paths: if the index could reach and hold above 6,100, she saw 7,000 as the next milestone. Sustained strength above 7,000, she said, could ultimately pave the way toward 8,200.

The S&P 500 has already moved close to that level, recently topping out at 6,945.77.

LaDuc has built a reputation for timely market calls. In 2022, she warned of an impending “tech wreck,” a year that proved difficult for the Nasdaq. In early 2024, she urged investors to stay invested in equities — advice that aligned with a record-setting year for the S&P 500.

Looking ahead to 2026, LaDuc expects a challenging but upward-trending market. “My core theme is a recession into all-time highs,” she said. “Stocks can continue to rise even as unemployment increases.” She added that concerns about stagflation are already surfacing within the Federal Open Market Committee.

For the S&P 500 to reach 8,200, LaDuc believes two forces must work together. The first is continued enthusiasm around artificial intelligence. With several major AI-related IPOs potentially arriving in 2026 — including OpenAI, SpaceX and Anthropic — she argues it’s difficult to envision a sustained market breakdown.

The second factor is a weaker U.S. dollar. “A falling dollar is extremely supportive for inflationary assets and equities,” she said. Combined with AI-driven excitement, LaDuc believes this could fuel a melt-up toward the 8,200 level.

She estimates current AI revenues at around $60 billion and says meaningful productivity gains and margin expansion — even if driven by layoffs — would be key to justifying higher equity valuations. That upside, however, could come alongside labor market stress and persistently high inflation.

With Wall Street projecting a roughly 16% gain for the S&P 500 by the end of 2026, LaDuc cautions that stocks are “priced for perfection.” In her view, elevated valuations leave little room for macroeconomic shocks.

Her biggest concern for equities is rising Treasury yields. LaDuc sees the 10-year yield as a major risk, arguing that higher unemployment and inflation would push yields higher as investors demand greater term premiums. “Rising yields tend to pull capital away from growth assets and into safety,” she said.

The key level she’s watching is 4.6%. “If yields reach that level and hold, the move higher likely continues,” she warned.

Overall, LaDuc expects 2026 to be a “hold-your-nose” market — one where stocks grind higher but experience pullbacks due to stretched valuations. She also notes that midterm election years are typically supportive for equities, as policymakers prefer to avoid weak markets ahead of elections.

Beyond stocks, LaDuc remains bullish on commodities, a stance she’s held since spring 2024. She describes the trend as “phenomenal,” particularly for miners, though she excludes oil. In April 2024, she made the contrarian call that crude would fall from around $80 a barrel into the $60–$40 range, easing energy costs for miners.

Her long-term optimism on precious metals is driven by falling energy costs and a weaker U.S. dollar. “The big-picture trend in precious metals isn’t going away,” LaDuc said. “The only thing that would change it is the U.S. government balancing its budget — and the odds of that are slim.”