Rates rally sharply as 10-year hits 1.3%, but S&P 500 stuck in neutral

Longer-term interest rates (TBT) +3.2% (TLT) -1.5% soared today, with the 10-year Treasury yield topping 1.3% after hitting 1.2% on Friday. The 30-year gained 8 basis points to 2.08%.The S&P 500 (SP500) -0.1% finished the day little changed. The Nasdaq (COMP) -0.3% fell. The Dow (DJI) +0.2% was the leader thanks to an outsized gain in Salesforce and rate-driven moves in Goldman Sachs and JPMorgan Chase.The most rate-sensitive cyclical sectors were the beneficiaries. Energy (XLE) was the clear leader, with WTI futures +1.3% topping $60 per barrel. The sector is now up more than 20% this year.Freezing temperatures cut oil output by 2M barrels per day.Financials (XLF) followed with the steepening of the yield curve."We see stronger growth and negative real yields ahead as the vaccine-led restart accelerates and central banks limit the rise of nominal yields – even as inflation expectations climb," analysts at BlackRock wrote today. "Inflation will have different implications to the past.""The policy revolution as a response to