- “I think if yields roll over and start slipping, we may see renewed pressure on stocks,” says UBS’ Art Cashin.
- Should stocks nosedive again, he says he would be watching for key levels at 26,000 on the Dow and 2,822 on the S&P 500.
U.S. stocks could resume their downturn if bond yields begin to move lower again, veteran trader Art Cashin told CNBC on Monday.
Stocks were trading sharply higher Monday, adding to a rebound that started on Thursday, a day after the Dow Jones Industrial Average posted its worst session of the year.
Last Wednesday, stocks sank after the 10-year Treasury yield inverted and briefly fell below the 2-year yield, a move preceding every recession over the past 50 years. The 10-year and 2-year yields have since gone back to normal.
Cashin noted that once bond yields stopped moving lower last week, stocks bounced.
“It may just be a simple coincidence, but I think not,” the UBS director of floor operations at the New York Stock Exchange said on “Squawk Alley. ” “I think if yields roll over and start slipping, we may see renewed pressure on stocks.”