The Bond Market Sell-Off Is Appearing in Earnings Reports

Rising bond yields at two-decade highs are showing up in corporate earnings, forcing companies to cut guidance and temper growth expectations. KLAR dropped 21% after reducing its outlook despite strong operational metrics, citing softer consumer spending in Germany as higher rates bite household budgets. HD beat earnings expectations but delivered muted growth as elevated mortgage rates continue to freeze housing turnover.

The rate squeeze extends beyond consumer-facing names. Hyperscalers funding AI infrastructure buildouts face mounting pressure, with capital expenditures projected to hit $1.2 trillion next year—increasingly financed through debt markets where borrowing costs have surged. The combination of weaker consumer demand and expensive capital is compressing margins across rate-sensitive sectors.