There was some speculation that Biden would nominate Fed governor Lael Brainard to take over as Fed chair. It an outside possibility, but one that left some room for market movement when the uncertainty cleared up. As of this morning, the word is in. Powell stays. Bonds are modestly weaker as a result (Brainard is decidedly the more bond-friendly of the two). The bond market's more immediate concern will be the digestion of condensed Treasury auction schedule today and tomorrow.
The following chart shows the reaction to the morning's news. It's actually somewhat debatable to give Powell's re-nomination credit for causing all of the weakness. The stock market tells a more accurate story with a brief, small blip of weakness, but no lasting impact.
So why did bonds continue to weaken as stocks improved? The early focus this week is on the condensed Treasury auction cycle. 2, 5, and 7 year notes would normally be auctioned on Tue, Wed, Thu respectively, but due to the holiday, that process will be complete by tomorrow afternoon. Traders knew this last week, but there always seems to be a bit of extra concession at the beginning of weeks with a condensed auction cycle.