Economic fears push down stocks, bonds

The U.S. stock market had its worst day of the year Wednesday, with the Dow Jones Industrial average dropping a whopping 800 points. The yield on Treasury bonds also fell, signaling that investors are buying up bonds because they think stocks will continue to decrease in value.

Does this mean a recession is coming? The bond market shifted the same way this week as it did in 2007 before the Great Recession—and the four recessions before that. Worry that the U.S.-China trade war will drive up consumer prices is fueling fears of an economic downturn. The U.S. retail market is so far staying strong. Overall retail sales and Walmart’s profitability both did better than expected last month. But uncertainty over China is still shaking investor confidence.