NEW YORK - Stocks fell sharply Wednesday after the bond market raised another warning flag on the economy.
The yield on the 10-year Treasury briefly dropped below the two-year Treasury's yield Wednesday morning for the first time since 2007. The so-called inversion has correctly predicted many past recessions and is the loudest warning bell yet about a possible recession ahead.
So is this a sign of something worse to come? Or just a bad day on Wall Street?
If you're checking the market every day and you're not a day trader, you're probably stressing yourself out too much, at least, that's what experts told FOX 10's Matt Galka. They're not panicking, but this is still a chance to shore up your portfolio.
"10-year Treasury notes dropped below two-year yields which means long-term yields are lower than short-term yields and that's always been a leading indicator that a recession is to comein the next six to eighteen months, historically," said Calvin Goetz.
But the president of Strategy Financial Group isn't ready to say the sky is falling.
"Historically, the S&P has rallied back after we've had this inversion for the first time," Goetz said.
And economist Alan Maguire says while this warning has come before past recessions, it's also come before regular market volatility.
"What you really need to look at is not the market, which is emotional at times, look at the economy. The economy is doing great. Unemployment is very, very low. Inflation is low. Those are good signs," Maguire said.
But both agree that the market swings come down to one thing for you and your wallet: how much are you willing to risk?
"It's the right time to reevaluate your overall plan, evaluate your risk tolerance, what you're comfortable with and what your risk level that you have in the portfolio that you've got," Goetz said.
They say other factors like tariffs aren't helping. It hurts confidence and low confidence hurts the martket.
The Dow today is almost at the same level it was last year, which is a lot better than decade ago.
The Associated Press contributed to this report. This story was reported from Phoenix.