Stocks and Bonds Pull Back in Rare Tandem Selloff, But History Suggests Bonds May Soon Outperform

Stock market pullback so far has been relatively ordinary, but accompanied by a rout in the Treasury market.

Stocks and bonds falling in tandem has been rare, though fresh in investors' memories from 2022.

When investors are more pessimistic toward bonds than stocks, bonds have tended to outperform.

Capitulation in stocks while bonds rally could lead to a year-end stock market rally.

Alternately, both stocks and bonds could simply rally together, with bonds outperforming.