Bond yields are rising so fast that something in the financial system is likely to snap, which is bad news for stocks, banks, and anyone borrowing money.

• Government bond yields have jumped to the highest level since 2007, and in the last 50 years every similar spike has broken something — a crash, a bank failure, or a bankruptcy.
• The speed of the move looks like forced selling: traders or banks being pushed out of positions, not people choosing to sell.
• Rising oil prices from the attacks on Saudi pipelines and tankers helped push yields up, so an Iran deal could calm bonds quickly.
• The bigger danger is AI: most of the economy's growth and most of the S&P 500's earnings now lean on AI spending, which runs on cheap borrowing.
• Betting markets now put the odds of a Fed rate hike in October at two out of three, and give a small chance of 6% yields by year-end.

Outlook: Without a quick Iran deal, expect something to break in banks or private credit — though the drop may end up being a buying opportunity for stocks.