Up In Price, Not In Comfort
Late January gave equities a clean headline. On Tuesday, January 27, 2026, the S&P 500 finished at a record closing high, extending a five-day winning streak as earnings rolled in.
At the same time, the usual “rates are falling, so multiples can expand” story did not arrive. The 10-year Treasury yield stayed in the mid-4% range into early February. FRED shows the 10-year at 4.28% on February 3, 2026, with the data updated on February 4.
That combination is the point of this issue. Stocks can rise with yields high. They just do it with a different kind of support. The rally is not being carried by cheaper money. It is being carried by something that can hold up even when borrowing costs do not relax.
A Pullback That Didn’t Get Help From Rates
The first days of February also showed what this regime feels like when it stumbles. On Tuesday, February 3, the S&P 500 fell 0.8% to 6,917.81, reported as about 0.9% below the record close from January 27.
Notice what is missing in that sequence. There was no quick drop in yields that softened the landing. The rate backdrop stayed firm, and the stress showed up inside equities instead.
That’s a key pattern to watch in “no rate tailwind” markets. When prices slip, the adjustment tends to happen through leadership and positioning rather than through an outside relief valve. The market has to sort itself out without getting a discount-rate gift.
Mortgages Still Heavy
It helps to ground “borrowing costs” in a number that touches real balance sheets. Freddie Mac’s Primary Mortgage Market Survey shows the average 30-year fixed mortgage rate at 6.10% as of January 29, 2026, basically unchanged from the week before.
This is not a claim that housing is about to break, or that stocks “should” fall. It is a simple split-screen. Equities were printing record closes at the end of January, while mortgage finance still carried a high hurdle rate for households.
When that split holds, it tells you the rally is not resting on broad easing. It is resting on markets that can clear trades and fund risk even when everyday borrowing stays expensive.
Where Pressure Found A Home
The early-February wobble also had a clear stress point: software. Reuters reported on February 4 that global software and services stocks had fallen sharply over several sessions, tied to investor fears that new AI tools could disrupt parts of the software and data business model.
Whether those fears end up right is not the signal. The signal is how quickly the market chose a crowded place to reprice. When yields are not falling, the index can still look fine while the internals get loud. The market expresses doubt by rotating, compressing, and punishing the parts that were priced for the smoothest future.
That is a different feel than a classic “rates up, everything down” selloff. It is more surgical. It is also more revealing, because it shows where the market believes the fragility sits.
So What Is Supporting Price?
With rates not easing, the plausible supports become narrower and more mechanical.
One support is concentration. If the biggest index weights attract steady demand, the index can rise even if many stocks do not participate much. Another support is simple scarcity. When selling pressure is light, it does not take heroic buying to lift the surface. A third support is allocation. Money can move within equities - away from one theme and toward another - without needing the whole system to become cheaper.
You can see hints of that rotation in real time. Reuters’ February 4 global markets wrap described value stocks outperforming growth as tech slumped. That kind of shift is a form of support. It is not “everyone is bullish.” It is “risk is being carried, but it is being carried differently.”
The Mismatch That Matters
From January 27 through February 4, 2026, the public record shows a market near highs alongside borrowing costs that stayed stubborn - 10-year yields around 4.28% and mortgage rates around 6.10%.
The takeaway is not a forecast. It is a condition. This rally is proving it can exist without rate relief, which means its durability depends more on flows, leadership, and the market’s ability to absorb pressure in specific pockets.
When the tape rises while borrowing costs stay high, the question is less “what’s the story?” and more “what is doing the carrying?” In late January and early February, the answer looks less like easier money and more like a market that can still clear risk - until a crowded corner gives way and reminds everyone where the strain really lives.
