Stocks and bond yields are supposed to move together. When the economy is humming, companies earn more and the government can afford to pay higher interest rates. That relationship has broken down so thoroughly that the correlation between the S&P 500 and the 10-year Treasury yield has hit -0.70 on a two-month rolling basis, the lowest reading since 1999.
In English: for every step higher in Treasury yields, equities are taking a proportionally large step lower. That’s the exact opposite of what investors saw at the start of 2026, when the same correlation sat at a comfortable +0.40.
The numbers behind the breakdown
The two-month rolling correlation of -0.70 is the headline figure, but the 30-day reading tells the same story. That shorter-term measure has dropped to -0.68, the weakest in 27 years.
A swing from +0.40 to -0.70 in a matter of months isn’t a gentle drift. It’s the market equivalent of a car doing a U-turn on a highway.
