Equity Risk Premium Turns Negative as 10-Year Yield Hits 5.28%

S&P 500 forward earnings yield (5.26%) now trails the 10-year Treasury (5.28%) because rates rose faster than earnings estimates.

ZMACRO WEEKLY · OCTOBER 5, 2026 Equity Risk Premium Turns Negative as 10-Year Yield Hits 5.28% S&P 500 forward earnings yield (5.26%) now trails the 10-year Treasury (5.28%) because rates rose faster than earnings estimates. BY DORIAN The S&P 500 trades at 19.0 times forward earnings, a forward earnings yield of 5.26%.  The 10-year Treasury closed Friday at 5.28%. Buying the index this week means accepting equity risk for a starting yield two basis points below the 10-year, and bank earnings on October 13 will show whether estimates can keep rising fast enough to justify that. I. MEASURING WHAT STOCKS PAY OVER BONDS Equity risk premium and earnings yield Equity risk premium, or ERP, is the extra return investors expect for owning stocks instead of government bonds. The simplest version, often called the Fed Model, subtracts the 10-year Treasury yield from the S&P 500 ear

---

Premium research continues below.

Unlock to read the full report, framework, and trade path.