Interest rates continue to rise in America, how long will the stock market last?

The US bond market remains turbulent. The 10-year interest rate rose to 5.225 percent on Thursday, the highest level since 2007. The 30-year interest rate also rose further, reaching 5.502 percent.

Wall Street nevertheless held up reasonably well. The S&P 500 and Nasdaq Composite closed Thursday virtually unchanged. But below the surface, the pressure increases.

Rising market interest rates are now having an increasingly clear impact on the US economy. The average interest rate on a mortgage with a term of thirty years is again above 7 percent. As a result, houses become more expensive to finance and the costs of other loans also increase.

Morgan Stanley expects this to be noticeable in consumption next year. That is exactly the dilemma facing the market today. For the time being, the US economy remains strong enough to tolerate high interest rates. But the longer these high interest rates persist, the greater the chance that consumers and companies will eventually hit the brakes.

The rise in bond yields does not come out of nowhere. Strong economic figures, high energy prices and strict statements from the US central bank have once again led investors to expect a rate hike in October.

The futures market now has a 68 percent chance of doing so. This means that the September interest rate hike is less and less seen as a one-off step. The market is starting to take into account a longer cycle of higher interest rates.

For equities, this is not an ideal development. Highly valued growth companies in particular must therefore show stronger future profits to justify their share prices.

There is one important windfall on Friday. Oil prices are falling again in hopes of a diplomatic solution to the conflict between the United States and Iran.

According to Reuters, both countries are discussing a phased agreement whereby Iran would allow shipping through the Strait of Hormuz again in exchange for ending the US blockade. How concrete these negotiations are remains uncertain.

Brent fell about 1 percent on Friday. This is important, because lower oil prices can reduce inflationary pressure and ultimately also the pressure on bond yields.

For the time being, the stock market image remains divided. The Dow Jones is on course for its fourth straight week of losses and is down about 0.6 percent this week. The S&P 500, on the other hand, is 0.7 percent higher and the Nasdaq even 1.6 percent higher.

So technology is still keeping the market going. But the main question remains the same: how much higher interest rates can the economy tolerate? As long as the 10-year interest rate continues to rise above 5 percent, that demand becomes slightly more important every day.