⚖️🇺🇸 Stock/Bond Historical Relationship Restored: Cable FX Macro

• The chart shows the S&P 500 (yellow) and the 10-year yield (light-blue) moving higher together over the broader period, consistent with a regime in which higher rates, inflation concerns, oil, and heavy AI-related debt issuance supported both equity valuations (or at least limited their downside) and rising yields.

• The recent sharp pullback in US 10-year yields marks a clear restoration of Treasuries’ safe-haven function; the flight-to-safety dynamic that has historically benefited Treasuries weakened recently.

• For much of 2026, the classic negative stock-bond correlation had deteriorated; bonds were not reliably cushioning equity risk, and in some stretches both assets sold off or yields rose alongside risk assets.

• That changed abruptly around 22 October. The 10-year yield fell roughly 19 basis points to about 4.95%, its largest one-day drop since the March 2023 banking stress, taking it back below 5% for the first time in a month after having traded above 5.3% earlier in October.

• In short, when the dominant concern shifted from inflation/supply-driven rate pressure toward growth, credit, and risk-asset valuation fears, duration demand returned. Treasuries once again absorbed the flight from risk assets, producing the classic inverse relationship visible in the recent dip of the blue line on the chart while equities remained elevated but under pressure.

• This is not yet a full regime shift. Inflation remains sticky, fiscal supply is heavy, and any re-acceleration in oil or hawkish Fed signals could quickly reverse the yield decline. But the speed and size of the 22 October move show that the safe-haven bid is still intact and can reassert itself forcefully when risk-off is triggered by growth or credit concerns rather than pure inflation.