Can equity markets navigate bond market weakness? Banks and commodities have done well but bond proxies and technology have been hit hardest Markets have been looking distinctly wobbly over the past few months as they have sought to digest a sharp rise in long-term bond yields. The culprit is inflation – or rather, fears of inflation. Will the struggling bond market dent the long-term prospects for equity investors? Stock markets have seen some difficult days in recent weeks. The S&P 500 dropped 3% from the 24 to 26 March, while the Chinese markets have fared even worse. The concern is that economic recovery coupled with giant stimulus could send inflation higher. There are sound reasons for concern: commodity prices are rising, for example, which has been reflected in higher CPI figures across the UK, US and Europe.