10Y-3M Yield Curve vs S&P 500
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
The 10Y-3M curve is the NY Fed's preferred recession signal. Inversions lead recessions by 12-24 months. When the curve inverts while SPY rallies, equities are ignoring the signal. The pattern has repeatedly resolved via SPY drawdowns as recessions arrive. Monitoring both reveals timing risk.
Cross-Asset Analysis
Before getting to the spread, note what each leg actually represents: 10Y-3M Yield Spread is spread between 10-year Treasury and 3-month T-bill, Fed's preferred recession indicator, and S&P 500 ETF (SPY) is SPDR S&P 500 ETF, tracks the benchmark US equity index. Implied volatility regimes in 10Y-3M Yield Spread and S&P 500 ETF (SPY) transmit through dealer flows that connect one market to the other via dealer balance sheets. Regime identification based on 10Y-3M Yield Spread-S&P 500 ETF (SPY) can be feedback-driven, because extreme spread values often snap back via mean reversion or regime change.
The Yield Curve & Rates and Equity Index corners of the market hold in common structural drivers but differ in sensitivity, and the 10Y-3M Yield Spread-S&P 500 ETF (SPY) spread surfaces those sensitivities. The bridge between 10Y-3M Yield Spread and S&P 500 ETF (SPY) runs through shared macro drivers, and isolating the spread distinguishes common factors from idiosyncratic noise. Macro funds use the 10Y-3M Yield Spread-S&P 500 ETF (SPY) spread to implement views cleaner than single-asset trades, pinpointing the exact macro factor they want to bet on.
Structural shifts hitting 10Y-3M Yield Spread or S&P 500 ETF (SPY), including retail demand or regulatory changes, can persistently reprice the relationship. 10Y-3M Yield Spread belongs to the Yield Curve & Rates space, while S&P 500 ETF (SPY) belongs to Equity Index, and the interaction between those two worlds is where the notable macro information resides.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between 10Y-3M Yield Spread and S&P 500 ETF (SPY)?+
10Y-3M Yield Spread and S&P 500 ETF (SPY) are connected through shared macro drivers across asset classes. When the dominant macro driver shifts, both respond, though with different sensitivities and at different speeds. The spread between 10Y-3M Yield Spread and S&P 500 ETF (SPY) captures the specific macro signal that flows through this relationship.
When does 10Y-3M Yield Spread typically lead S&P 500 ETF (SPY)?+
10Y-3M Yield Spread tends to lead S&P 500 ETF (SPY) during macro regime changes, where the more liquid asset moves first. In those periods, moves in 10Y-3M Yield Spread precede corresponding moves in S&P 500 ETF (SPY) by days to weeks, depending on the transmission channel and the depth of each market.
How are 10Y-3M Yield Spread and S&P 500 ETF (SPY) historically correlated?+
Long-run correlation between 10Y-3M Yield Spread and S&P 500 ETF (SPY) varies by regime. Cross-asset correlations vary by regime, tending to tighten in stress and loosen during normal conditions. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the 10Y-3M Yield Spread-S&P 500 ETF (SPY) relationship.
What macro conditions drive divergence between 10Y-3M Yield Spread and S&P 500 ETF (SPY)?+
Divergence between 10Y-3M Yield Spread and S&P 500 ETF (SPY) typically arises from idiosyncratic shocks in one asset, policy interventions, or structural shifts in demand. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in 10Y-3M Yield Spread or S&P 500 ETF (SPY).
Is 10Y-3M Yield Spread a hedge for S&P 500 ETF (SPY)?+
Cross-asset hedges between 10Y-3M Yield Spread and S&P 500 ETF (SPY) work when the macro drivers of the two assets are sufficiently decorrelated, which depends on the regime and therefore needs to be reviewed as conditions change. Effective hedging requires matching the hedge to the specific risk being protected, and the 10Y-3M Yield Spread-S&P 500 ETF (SPY) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.