It was a classic risk-off trade today, albeit with a certain level of exhaustion on the part of US bond markets.  "Risk-off" means what it says: investors are moving money into less risky investments.  Selling stocks and commodities, or buying bonds are all quintessential 'risk-off' trades. 

There's no question that stocks were sold.  Here's a fun fact: by a very small margin, the S&P just had its worst day since November 2011!  Normally, we'd expect to see a little more love for bonds when that happens, but we can cut them some slack.  MBS and Treasuries are coming off a pretty great day yesterday, not to mention the fact that today's gains brought them to their best closing levels in more than 3 months.  A little exhaustion is understandable in that case.

Even then, today's rally wasn't too shabby.  Fannie 3.5s added 6/32nds and 10yr yields dropped 5.6bps.  Economic data was generally stronger, with both Philly Fed and Existing Home Sales beating expectations at 10am.  The fact that bonds made another move into stronger territory is more evidence that the global risk-off sentiment was in the driver's seat.