We've been covering the huge move higher in Treasury yields throughout the week for premium members. As bond yields rise, bond prices go down. Check out the six-month chart below of the 20+ Year Treasury Bond ETF (TLT). On Wednesday and Thursday of this week, the bottom fell out.
The higher the yields on "risk-free" investments like Treasury bonds, the less attractive stocks with higher dividend yields become. Imagine an investor considering a value stock with a 4% dividend yield. That dividend looks attractive if the 10-year yield is at 2%. If the yield on the "risk-free" 10-year climbs to 5%, however, the "riskier" stock with a 4% dividend yield looks much less attractive.
As interest rates have spiked, especially in the last month, dividend stocks have taken it on the chin. One of the best proxies for US dividend stocks is the iShares Select Dividend ETF (DVY). Through mid-August, DVY performed well, steadily trending higher over the prior four months.
In the five weeks since peaking in mid-August, though, DVY has fallen out of bed, breaking below its 50-DMA and landing right on its 200-DMA as of yesterday's close.
If you're curious about the individual names that make up DVY, below is a table of the ETF's 30 largest stocks. For each stock, we show its percentage change since DVY's closing high this year on 8/19, its distance from its 52-week high, its year-to-date total return, and its indicated dividend yield.
The list is sorted by the stock's percentage change since DVY peaked on 8/19. Six stocks are down more than 10% since DVY's big pullback started, led by a 17.8% drop for Comcast (CMCSA). The five other 10%+ declines since 8/19 are Ford (F), Lockheed Martin (LMT), NextEra Energy (NEE), and McDonald's (MCD). Of the six DVY stocks down 10%+ since 8/19, four sectors are represented (Comm. Svcs, Cons. Discret., Industrials, Utilities), so it has been an equal-opportunity drop for dividend stocks.
On average, these 30 largest stocks in DVY are down about 5% since 8/19, and they're 14.4% below their 52-week highs. Yet they're still up an average of 18.8% year-to-date, so even after the recent pullback, 2026 has been decent for dividend stocks.
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