I don't think the market has fully reacted yet. The 10Y briefly crossing 5% matters, but the S&P 500 falling only 0.48% while semis plunged nearly 6% suggests rotation rather than broad risk-off selling.

The key is whether 5% becomes a ceiling or a new floor. If yields settle back below 5%, equities can probably absorb it. But if the 10Y holds above 5% and keeps climbing, valuation pressure should spread beyond chips into other long-duration growth stocks.

With markets now pricing roughly a 90%+ chance of a 25 bp Fed hike, the hike itself is largely expected. I think the bigger catalyst is what the Fed signals about further hikes.

For now: rotation, not capitulation. But sustained 5%+ yields would make me considerably more cautious.