Stocks plunged in the worst trading day of the year. The U.S. bond market flashed a troubling signal: a yield curve inversion, which is a reliable indicator of economic recession. The Dow fell 3.05% as the S&P slid 2.93% and Nasdaq, 3.02%.
, an odd bond market phenomenon that has been a reliable indicator of economic recessions. Investors, worried about the state of the economy, rushed to long-term safe haven assets, pushing the yield on the benchmark 30-year Treasury bond to a new record low on Wednesday.
"The U.S. equity market is on borrowed time after the yield curve inverts," wrote Bank of America technical strategist Stephen Suttmeier. The last time this key part of the yield curve inverted was in December 2005, two years before the recession hit. August has been a volatile month for the stock market so far. Including Wednesday, the Dow has moved more than 200 points in either direction on seven occasions. Wednesday's plunge was the biggest drop since the August 5 drubbing of 767 points, or 2.9%, on the Dow.way below analysts' expectations as heavy markdowns used in spring to clear unsold merchandise weighed on profits.deepened the gloom in the world's second-largest economy.
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