Goldman Sachs Group Inc. said equities are at risk of a temporary selloff, citing rising bond yields and high valuations.

The bank cut its rating on stocks to neutral, the equivalent of hold, for the next three months, according to a quarterly research report from its portfolio strategy group today. Goldman Sachs also lowered corporate credit to underweight and predicted that government bond yields will increase.

“The acceleration in economic growth is largely behind us and geopolitical risks are elevated,” a group of 11 strategists, including David Kostin, Kathy Matsui and Peter Oppenheimer, said in the report, known as the global opportunity asset locator. “In the short term we worry that a rise in bond yields will drive equities lower.”

Goldman Sachs advised investors to hold fewer government bonds because yields will probably rise as U.S. inflation accelerates and the Federal Reserve stops its bond purchases in October. Treasurys returned 3.3 percent this year through yesterday, according to Bloomberg World Bond Indexes, the most over the equivalent period in four years.

U.S. and European stocks fell today as companies from Amazon.com Inc. to LVMH Moet Hennessy Louis Vuitton SA missed earnings estimates. A Commerce Department report showed orders for U.S. business equipment rose in June following a revised drop the prior month, indicating corporate investment remains stop-and-go and could hold back growth.