Crypto Rover: stocks-bond correlation most negative since 1990s

Crypto Rover said on May 22 that the correlation between U.S. stocks and bond yields had turned “most negative since the 1990s,” arguing that equities and the bond market were sending conflicting signals. The post, published on X by the account @cryptorover, said bond markets were warning about inflation, debt and higher rates even as stocks traded near records. The claim landed during a week when U.S. equities stayed close to all-time highs while Treasury yields remained elevated. Market data from May 22 showed the S&P 500 closed at 7,473.47 and the 10-year Treasury yield ended at 4.56%. ### What exactly was Crypto Rover pointing to? Crypto Rover’s May 22 thread described a sharp negative relationship between stock prices and Treasury yields, meaning the two were moving in opposite directions rather than rising together. The post said one market was likely wrong, with bonds signaling inflation, debt and higher-rate risks while equities stayed near peak levels. (cnbc.com) A May 23 report by Crypto Briefing quantified the move more specifically, saying the rolling 30-day correlation between the S&P 500 and the 10-year Treasury yield had fallen to -0.68 and the two-month correlation to -0.70. That report said the divergence was the largest opposite-direction move of the 21st century and compared it with the late-1990s period. (cryptobriefing.com) ### Why does a negative stock-yield correlation stand out now? Barclays Private Bank said in a March 2025 note that negative equity-bond correlation had been common for much of the post-2000 period because bonds often cushioned equity drawdowns. Barclays also said that relationship flipped in 2022, when inflation and higher interest rates pushed stocks and bonds to move more in sync. (cryptobriefing.com) That history is why the latest reversal drew attention. If stocks and yields are now moving in opposite directions again, it marks a break from the positive correlation that had persisted since 2022, according to Barclays’ description of the recent regime. (privatebank.barclays.com) ### What were stocks and bonds doing in the same week? The S&P 500 finished May 22 at 7,473.47, up 0.37% on the day and just below its May 14 record high of 7,517.12, according to CNBC market data. That left U.S. equities near record territory heading into the Memorial Day weekend. The 10-year Treasury yield ended May 22 at 4.56%, while the 2-year yield ended at 4.13%, according to Advisor Perspectives. (privatebank.barclays.com) Earlier in the week, the 30-year Treasury yield briefly touched 5.197%, its highest level since July 2007, CNBC reported on May 19. CNBC reported on May 20 that the bond market was “painting a different picture” from equities, with government bond yields rising as investors priced in higher inflation and broader rate-hike risks. (cnbc.com) The same report said the S&P 500 was up 7.4% year-to-date even as the 10-year yield had surged about 70 basis points over the course of the Iran war. (advisorperspectives.com) ### Who else was flagging the split? Bank of America’s May fund manager survey found a record jump in equity allocations even as bond-market anxiety persisted. Reuters reported that a net 50% of surveyed managers were overweight equities in May, up from 13% in April, based on responses from investors managing $517 billion. (cnbc.com) CNBC said on May 20 that the divergence between rising stock optimism and pressure in sovereign bonds had prompted warnings from some investors that an equity correction could be looming. That characterization was CNBC’s, not Crypto Rover’s, but it reflected the same split-screen setup highlighted in the X thread. (msn.com) ### What is the next concrete thing to watch? Treasury trading resumes after the Memorial Day holiday with investors watching whether the 10-year yield stays around 4.56% and whether the S&P 500 revisits its May 14 record of 7,517.12. Crypto Rover’s original May 22 thread remains available on X under @cryptorover, alongside the market data that prompted the post. (advisorperspectives.com) (cnbc.com)