Treasury yields continued to rise on Thursday, reaching new multi-decade highs. The increase, which enhances the appeal of bonds, is starting to weigh on stocks. So far, the pressure on equities has been relatively mild, although the pain has been more intense for some slices of interest rate-sensitive shares, which have lost substantially more ground in recent weeks than the broader market, based on a set of ETFs through Thursday’s close.

To measure how interest rate-sensitive equities compare with the stock market overall, I focused on eight subcategories and calculated their average performance to track how these groups have been faring.

The stock market overall is still posting a solid year-to-date gain and continues to trade near its recent high, based on the SPDR S&P 500 ETF (SPY). But as the chart below shows, interest rate-sensitive categories in general have posted sharply weaker results. The average year-to-date performance for these groups is a 3.6% gain this year, well below the 12% peak reached in mid-August (red line in the chart below).

This relatively weak performance in recent weeks highlights a growing gap versus the broad market, a gap that’s likely to widen if Treasury yields continue to rise.

Several factors are driving the bond market’s repricing of yields, including inflation expectations, uncertainty surrounding the Iran conflict, concerns about ballooning federal debt, and changing economic conditions. For now, all of these factors have contributed to the bond market rout that has been pushing yields higher.

The possibility of a shifting risk landscape could change the calculus. For example, Iran in the last few hours has made a new offer to reopen the Strait of Hormuz if Washington accepts its conditions, including resuming nuclear talks with the U.S. It’s unclear whether this will lead to anything substantive, but oil prices edged lower this morning on the news, a reminder that circumstances can change quickly.

Another factor to monitor is the recent acceleration in U.S. economic activity. If yields continue to rise, the higher cost of borrowing will eventually slow the pace of growth, which in turn could reduce upward pressure on rates. In other words, yields will peak at some point, potentially creating compelling buying opportunities for both bonds and interest rate-sensitive stocks.

Although no one can reliably forecast when yields will reach their peak, the recent rise in rates is gradually improving the opportunity set for long-term investors. Higher yields increase the income available from bonds, while the selloff in interest rate-sensitive equities is creating more attractive valuations in several areas. The near-term outlook remains uncertain, but patient investors may ultimately find that today’s market turbulence is laying the groundwork for stronger future returns.

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