NEW YORK — Stocks sank today after the bond market threw up one of its last remaining warning flags on the economy.

The yield on the 10-year Treasury briefly dropped below the two-year Treasury's yield this morning. It's rare for short-term yields to rise above longer-term ones, and when it happens, market watchers call it "an inverted yield curve" and brace for the possibility of a recession hitting in a year or two.

The Dow Jones Industrial Average dropped as much as 475 points in the first few minutes of trading before recouping some of its losses.

Weak economic data around the world also unnerved investors, who flipped back into selling mode after driving a rally Tuesday on hopeful signals that the U.S.-China trade war may not be worsening so much.

The S&P 500 fell 1.7%, as of 10 a.m. Eastern time, giving back all of the prior day's jump after the U.S. delayed some of the tariffs threatened on Chinese imports. The Dow lost 435 points, or 1.7%, to 25,841, and the Nasdaq composite lost 1.9%.

Much of the market's focus was on the U.S. yield curve, which has historically been one of the more reliable recession indicators.

Each of the last five times the two-year and 10-year Treasury yields have inverted, a recession has followed. The average amount of time is around 22 months, according to market analysts.

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