@moneycat8, hi! It's about the cost of debt for companies and households. A sharp rise in bond yields increases the cost of borrowing for the companies and households, the cost of mortgage goes up for instance, the cost of auto loans also gets higher - the rise in bond yields has a slowdown effect on the economy, people are not able to consume as much, companies are not able to finance their growth so easily, and as a result the future growth takes a hit, which eventually gets reflected in the stock prices. This is why every rise in bond yields over the last 20 years caused a market crash or at least a substantial sell-off. Here's a link on that: http://www.zerohedge.com/news/2016-11-17/horseman-capital-sharp-spike-yields-preceded-every-market-crisis-last-20-years
@moneycat8, also is if you hold stocks which are worth 100$, and they deliver 2.2% of dividends every year, and if you see bonds going even cheaper than that, yielding 3%, if will make total sense to sell the stocks and buy bonds. This is what the market may very well do, repricing the assets to the new reality of higher interest rates.