BlackRock Cuts US Equities to Neutral and Upgrades Treasuries Amid Yield Surge

BlackRock has downgraded its stance on U.S. equities from overweight to neutral, funding an upgrade of U.S. Treasuries to overweight. The shift ends a six-year underweight stance on Treasuries maintained since October 2020. The reallocation favors short-term government debt while shifting long-term Treasuries to neutral, driven by attractive valuations as the 10-year Treasury yield rose 110 basis points year-to-date to roughly 5.25%. BlackRock considers market expectations of 160 basis points in Federal Reserve tightening over the next 12 months overdone, though it retained its structural conviction in artificial intelligence and emerging markets.