Yesterday saw US Treasuries rally sharply as investors fled riskier assets like tech stocks. The selloff in technology shares triggered a broader market reaction, with global investors moving toward safer investments.
This "flight to safety" showed just how nervous markets are about the future.
Treasuries’ comeback

The rally in Treasuries yesterday wiped out losses from earlier this year. Back then, concerns over inflation and political uncertainty had hurt the bond market. The 10-year Treasury yield fell 12.5 basis points to 4.50%, its biggest drop in two weeks. At the same time, the two-year yield slipped to 4.17%, the lowest it’s been in over a month.
This movement focused on 5 to 10-year maturities, as investors sought stable ground in an otherwise volatile market. When we talk about "5 to 10-year maturities," we’re talking about bonds that will pay back the full amount (plus interest) in 5 to 10 years.
For context:
Short-term bonds (like 1-2 years): These are safer but pay less interest. People use them when they think things will improve soon and want their money back quickly.
Long-term bonds (20-30 years): These pay more interest but are riskier if the economy changes a lot over time.
The "5 to 10-year" bonds are a middle ground. They’re safer than long-term bonds but still offer decent returns compared to the short-term ones. During uncertainty (like when tech stocks fall), investors want something stable but also rewarding, so they often pile into these medium-length bonds.
What sparked the selloff?
Hard to ignore: DeepSeek - the Chinese model, which was cheaper to produce, implying a higher degree of cost efficiency. This raised doubts about the dominance of US technology companies. Investors began questioning whether high valuations for US tech stocks were justified.
George Saravelos of Deutsche Bank compared this moment to the DotCom crash of the early 2000s. Back then, a sudden tech revaluation caused major market disruptions.
Global ripple effect
The selloff wasn’t just limited to stocks. Safe-haven currencies like the yen and Swiss franc surged. The yen climbed 1.5% to its highest level in five weeks. The Swiss franc jumped 1% as well. European bonds also gained ground, with debt from Germany, France, and Italy benefiting from the flight to safety.
What Comes Next?
Monday’s events highlight how fragile the market is right now. For now, it’s clear: when uncertainty looms, investors turn to the stability of US Treasuries.
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