• Government bond yields hit fresh monthly lows on Tuesday.
  • The Dow Jones Industrial Average heads for its worst day in months.
  • U.S. equities will ‘get crushed” in the next recession, warns Jeffrey Gundlach.

U.S. government debt yields plunged on Tuesday after President Trump poured cold water on an imminent China trade deal, sending stocks tumbling.

Treasury Yields Tumble

Yields, which move inversely with bond prices, are back to trading at one-month lows Tuesday. The benchmark 10-year U.S. Treasury yield fell 13 basis points to 1.704%, while the 30-year Treasury yield hit 2.156%.

The benchmark 10-year U.S. Treasury yield falls to its lowest level since late October. | Chart: CNBC

The rush into government bonds follows a record melt-up in U.S. stocks last month. The S&P 500 Index posted 11 record highs over the course of 20 trading days.

Stocks are now correcting lower, with the Dow Jones Industrial Average on track for its third consecutive triple-digit loss. The blue-chip index plunged by as much as 458 points on Tuesday.

Jeffrey Gundlach Warns of Epic Stock Market Meltdown

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