The stock market rally will run out of steam because investors are shifting to risk-off even as inflation expectations ease

• Longer-term Treasury rates are moving higher, reflecting a risk-off shift among investors, DataTrek said. 
• The change in long-term Treasurys from mid-January lows suggests downside for stocks.
• "As long as real yields stay at current levels or increase further, equities may not be able to stage a sustainable rally."

Upward moves in longer-dated US Treasurys suggest the stock rally of the last seven weeks may not be sustainable, according to DataTrek Research. 

In a Thursday note, DataTrek cofounder Nicholas Colas highlighted that 5-year Treasury yields started the year at 3.99%, and have now jumped to 4.17%.

That reflects a difference of 0.18 percentage points,  which almost mirrors the 0.19 percent point increase in inflation expectations baked into 5-year Treasurys, Colas said.