US Treasuries stood out as the best performer amongst the major asset classes amidst the broad-based sell-off overnight. The sell-off ended several days of calm as investor jitters over momentum performers (tech stocks and precious metals) returned. Note that gold and silver are trading more like risky assets given their correlation with stock indices. Moreover, realized and implied vol for these two metals are high by historical standards (especially silver) suggesting that investors are expecting considerable price swings. Market dynamics are made worse as market participants increasingly worry on the negative implications of AI across more industries. Tech stocks, the darling for the past few years, are lagging noticeably this year.
Against this backdrop, US Treasuries stood out in what may be the first meaningful risk-off period since Liberation Day. Yields have been broadly stable for an extended period and there are no bubble signs in USTs. As mentioned previously, 10Y yields above 4% are sufficient for investors to seek safety in these longer-tenor securities. We note that the technical picture looks somewhat shaky for stocks and at best mixed for precious metals in the near term. This could mean sustained downward pressure across UST yields until the asset market sell-off abates. 3.4% and 4.0% will be the two critical levels to watch for 2Y and 10Y yields respectively. 
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