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Market Rally Faces Test as Bond Yields Rise Sharply

Equity markets are confronting mounting headwinds from rising bond yields, threatening to derail weeks of robust gains. Technology sector enthusiasm has driven recent equity strength, but semiconductor stocks and other high-growth equities experienced notable selling pressure as investors reassess risk exposure amid the shift in fixed-income markets. Chinese equities paused their upward momentum following a meeting between Xi Jinping and Donald Trump, with market participants taking profits while awaiting clearer trade signals from the bilateral talks. The summit produced no substantive breakthroughs on commerce or diplomacy, leaving investors cautious about near-term direction. Some strategists maintain conviction that strong earnings recovery and historically low positioning levels may provide sufficient support to sustain equity valuations despite the yield headwinds. The coming weeks will test whether fundamental strength can offset the pressure from higher borrowing costs.