The return on stocks needs to be significantly higher than on bonds to be worth buying/holding stocks, because stocks are more risky. Every time rates go up, bonds go up, and stocks become less attractive to hold. A stock with a P/E of 20 isn't worth it. A few more rate hikes and a stock with a P/E of 15 won't be worth it, you will be better off holding bonds. Stocks will get sold to buy bonds and get the same return but safer.