The stock market could be due for a nasty selloff, judging by these two signals

Two market signals are drawing attention as potential warning signs for equities. According to Bank of America, a rise in bond-market anxiety — often reflected in measures such as the ICE BofA MOVE Index, which tracks expected volatility in U.S. Treasurys — has coincided with weakness in financial stocks. Historically, stress in the bond market combined with a selloff in bank and financial shares has sometimes preceded broader equity drawdowns.

The logic is straightforward: banks sit at the center of the credit system, so when financial stocks weaken, it can suggest investors are pricing in tighter lending conditions or rising funding stress. Meanwhile, elevated Treasury volatility can ripple across all asset classes, making it harder to price risk and often prompting investors to reduce exposure to stocks.

That said, signals like these are not guarantees. They are probabilistic indicators, and markets have sometimes recovered after similar episodes. What to watch next: whether bond volatility keeps climbing, whether financial stocks stabilize or extend losses, and whether credit spreads widen in tandem. If those conditions ease, the warning may fade; if they intensify, the risk of a sharper market shock grows.