Traders can’t say they didn’t know it was coming, sooner or later. The bond market and its popular pundits have been delivering warnings for months now. There was just something about Tuesday’s event, though, that made it all too real, all too fast, for stock investors.

What’s that? For the first time since 2014, the 10-year Treasury yield edged above 3%. And, given the trajectory from the 2016 low of 1.3% — coupled with firm inflation and a strong economy — there’s no reason to not think yields won’t continue to rise. It’s a problem for equity owners because the more bonds pay, the less attractive stocks become. Indeed, the mere threat of higher interest rates could be enough to drive a full-blown market correction.

What if, however, the if-then assumption was more bark than bite?

It probably is, although that won’t prevent any short-term trouble.

Rising Treasury Yields Not a Long-Term Worry

The superficial logic makes enough sense. If the bond market is paying well, then it’s likely doing so at the expense of the stock market.

And, vice versa.

Investors tend to gravitate to the optimal risk-adjusted return. While equities in the long run offer more upside relative to their potential, they may also impose more risk than investors care to take on when bond yields look better than they have in several years. In other words, better payouts from the bond market are starting to turn stock owners’ heads … particularly in light of the fact that stock valuations were already pushing their limits.

The dynamic has yet to prod a full-blown market correction, of course. But, with the S&P 500 on the verge of breaking under its pivotal 200-day moving average line for the third time since February, investors are clearly nervous.

They may not need to be so worried though.

LPL Financial’s chief investment strategist John Lynch crunched the numbers. His findings? Going all the way back to the 1990’s, not once in all eleven instances where rates were on the rise did the S&P 500 lose ground. Quite the contrary actually. The average gain for those rising-rate spans was a healthy 9.5% advance.

What gives? In almost all historical cases where rates have risen, they’ve done so mostly because a strong economy is spurring greater employment and wage growth, giving consumers more spending power that’s met with higher prices that ultimately translates into bigger corporate profits. That’s a good thing.

And this round of rising rates doesn’t appear to be different. Invesco’s chief global market strategist Kristina Hooper bluntly explained the recent rise of the 10-year Treasury yield (and all bond yields for that matter) saying it “is telling us the economic growth picture is solid.”

Bond Market Incites Near-Term Panic

While interest rates that are edging higher may not be an actual problem for long-term investors until the 10-year Treasury yield tops 5% (that’s when Lynch says the stock/rate relationship starts to unravel in an ugly way), that doesn’t mean traders can’t or won’t respond irrationally.

That’s the polite way of saying traders may have already planned out a market correction in their heads, assuming any headlines about rising yields must coincide with falling stock prices.

The psychological underpinnings are certainly in place. Lori Calvasina, RBC’s chief U.S. equities strategist, conceded “I don’t know why 3 percent on the 10-year freaks people out so much, but it is certainly something the market got in its head.” She went on to say “Three percent should not be the point of pain, but it’s something I hear from investors.”

Jeff “Bond King” Gundlach also recently cautioned that once the 10-year Treasury yield moves above 3%, it could ultimately cause the stock market to book a loss for 2018.

It’s that kind of talk, supported by empirical evidence or not, that can spook investors in the short run.

Bottom Line on Bonds

Don’t misread the message. Higher interest rates do increase the cost of money, which in turn makes corporations that rely on borrowed money at least a little less profitable. From that perspective, the worry makes sense.

Any weakness would likely be a purely reactionary one though, and likely short-lived. As Greg Valliere of Horizon Investments noted, “As the Fed gradually tightens, it will take rates significantly higher than current levels to derail economic growth or the stock market, in our opinion. A recession isn’t remotely imminent, not with the unemployment rate headed below 4%.”

Translation? Any stock pullback rooted by the current and rapidly changing dynamics of the bond market will ultimately be a buying opportunity.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.