Tracking the US market benchmarks

Investors focus on two major benchmarks in the US: the S&P 500, tracking the world’s largest equity market, and the 10-year Treasury note yield.

Against the backdrop of the Federal Reserve’s quantitative easing policy that began in 2009, the S&P 500 has nearly tripled in value from its financial crisis nadir, while government bond yields, which move inversely with price, have been confined to historically low levels.

In the wake of QE ending last year, investors are closely watching how the process of interest rate normalisation will influence equity and bond prices. A matter for debate among investors is whether the strong performance of both equities and Treasury debt in recent years has peaked.

This chart sets out the historical shifts in these key asset classes.