For months, one of the largest variables for future stock market performance has been the question of what happens when bond yields finally begin to rise. While this subject hasn’t received much coverage, investors are certainly beginning to pay more attention now following this month’s collapse in the bond market.

Since May 2, the yield on the 10-year Treasury note has rocketed from 1.63% to 2.13% — an extraordinary increase of 31%. The impact this move had in the stock market may provide a preview of what investors can expect if the bull market in bonds has indeed come to an end.

The most important shift in stock market performance so far this month has been the underperformance of the defensive, dividend-paying stalwarts that have been largely untouchable since last fall. From May 2 through May 28, the three largest sector laggards have been utilities, consumer staples and telecommunications, all of which have trailed the 4.1% gain of the SPDR S&P 500 ETF (SPY) to varying degrees.

These moves have been mirrored in some broader-based market segments that have been popular destination for those in search of bond proxies. Dividend ETFs that focus on the highest-yielding stocks (as opposed to those delivering dividend growth) have underperformed, as evidenced by the 1.2% return of iShares Dow Jones Select Dividend Index Fund (DVY).

In addition, low-volatility products such as PowerShares S&P 500 Low Volatility Portfolio (SPLV) have taken it on the chin due to their concentration in the sectors that have been hit the hardest. Since May 2, the SPLV — which holds weightings of 29.5% in utilities and 20.5% in consumer staples — has returned -0.9%.

That these sectors would underperform in a rising-rate environment makes perfect sense. The 50 basis point move in Treasuries has taken a huge bite out of the “spread” the higher-yielding segments offer relative to bonds, causing cash to flee these sectors in search of better opportunities elsewhere. This selling has fed on itself, as the weak hands of bond-proxy investors has caused money to be shaken out of these market segments at the first sign of trouble.

On the other side of the ledger, economically sensitive stocks have outperformed. As the above table shows, energy, industrials, materials and consumer discretionary shares have all outpaced the broader market through the surge in Treasury yields. Some of this may be the growing optimism about the growth outlook, as evidenced by Tuesday’s outstanding consumer confidence. However, given that few investors are expecting a return to the days of 3%-plus growth, the largest factor in their outperformance is likely the entry of new cash coming fleeing from the defensive areas of the market.

It’s also noteworthy that financials have outpaced all other sectors and put up a 2.8 percentage-point advantage over the S&P. With short rates still pinned by the Fed’s low interest rate policy, the entire yield spike has occurred on the longer end of the curve. This enables banks to earn higher net interest margins, and the stocks have reflected the potential for stronger bottom-line results.

Finally, both small-caps and lower-quality stocks have outperformed since Treasury yields began to rise. The iShares Russell 2000 Index Fund (IWM) has gained 6.3% since May 2, while PowerShares S&P 500 High Beta Portfolio (SPHB) has tacked on 8.2%. It remains to be seen whether these groups can continue putting up strong relative performance numbers if the broader market begins to lose ground, but for now investors have been amply rewarded for going out the risk curve.

This is undoubtedly a small sample — 17 trading days, to be exact — but it pays to be prepared for the fallout if the long-awaited bear market in bonds has begun. So far, the early returns show that the market’s “safe” investments may in fact be anything but.

As of this writing, Daniel Putnam did not hold a position in any of the aforementioned securities.