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The yield on the U.S. 10-year Treasury fell below 1% for the first time ever after the Fed unexpectedly cut rates to shield the economy from any coronavirus impact.
Why it matters: Yields on the benchmark 10-year note have fallen by more than 90 basis points in just the first two months or so of 2020. That's a huge move in a short amount of time — and reflects investors' appetite for safe-haven assets and pessimism about the global economy.
By the numbers: As the bond market rallied, stocks sold off following Fed chair Jerome Powell's Tuesday press conference.
- The S&P 500 closed down more than 2%, erasing some of Monday's big gains.
The bottom line: While the U.S. stock market has vacillated erratically between scaling all-time highs and record sell-offs, the bond market has been consistently bearish on the state of the economy.