S&P and Treasuries

U.S. stocks and bonds are tracking each other’s moves more closely as speculation builds that the Federal Reserve is due to start cutting interest rates. This shift is reflected in the 120-day correlation between the S&P 500 Index and the yield on 10-year notes, as compiled by Bloomberg. The indicator closed Wednesday at 0.52, its highest level since August 2016. Correlations can be as high as 1 when two assets rise and fall in tandem and as low as minus 1 when they consistently move in opposite directions.

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