In One Chart: Bond market signals interest rates will drop in 2023, but stock investors unsure if that’s ‘good news or bad,’ DataTrek chart shows

The U.S. stock market can’t seem to figure out whether the recent decline in Treasury yields is good or bad for equities, according to DataTrek Research.

“The tie between 2-year yields and S&P 500 returns is mostly clear” over the past 16 months, Nicholas Colas, co-founder of DataTrek, said in a note Monday. “When rates are rising, the index drops. When rates stabilize, the S&P rallies.”

But…