Märkte im Blick: Warum die Börsen steigende Zinsen so lange ignoriert haben

German bond yields have surged to levels not seen in over a decade, with US ten-year bonds now offering a 5.3 percent annual return, compared to 3.6 percent for German government bonds and 4.9 percent for French bonds. Despite this, stock markets have largely remained unmoved, with the DAX trading 6 percent below its all-time high and US indexes only 2 percent lower.

The key drivers behind the rising interest rates include strong US economic data, mounting national debts, persistent high inflation, and expectations of further rate hikes by central banks. Germany's inflation rate rose to 3.3 percent in September, up from 2.9 percent in August. As a result, investor expectations for company earnings have remained robust, with analysts boosting 2027 profit forecasts for MSCI World Index companies by 1.5 percent in September.

Similarly, year-on-year profits are expected to soar, with the DAX and Dow Jones set to record high gains. A study by asset manager HQ Trust found that US stocks outperformed during nine out of ten periods of rising US interest rates since 1978, with an average return of 18.3 percent, nearly double the long-term average of 12.2 percent.

Technology companies have historically been the biggest winners during periods of rising interest rates, delivering an average outperformance of 13.2 percent against the broader market. Industrials also benefited, with a 3.8 percent edge over the market. Conversely, utility stocks struggled, underperforming by an average of 10.7 percent during the same periods.

The resilience of stock markets during rising interest rates is partly due to the fact that such periods often coincide with healthy economic growth. This is the case once again, with the US economy expected to grow by nearly 3 percent in the third quarter. European purchasing managers' indices suggest a recovery, with Germany's Ifo index rising for the fifth consecutive month after monthly surveys of over 7,000 business decision-makers.

This signals a future upturn, but the markets' resilience is beginning to reach its limits, especially as the interest rate hiking cycle nears its end. This could happen either because investors start pouring money into bonds, which offer higher returns, or if company earnings growth slows down, particularly as rising interest rates often have a delayed impact on earnings.

Eventually, higher interest rates will make investments and new borrowing more expensive, ultimately weighing on company profits and dividends.