The bond market rally is faltering and benchmark yields are rising - the result of strong economic recovery, rising inflationary pressures and expectations of tighter monetary policy.
Historically, such moves in bond markets have hinted at correction in equity markets - often the result of stretched valuations and expectations that future earnings cannot justify such lofty values.
What follows is a simple and - usually - regular function of financial markets: investors fear earnings will fall short of expectations, re-align their portfolios to favour bonds, sit back while the equity markets correct and then buy back into stocks when price/earnings ratios have fallen back to more reasonable levels.
A correction is when an asset, security or index falls 10% or more from its most recent cyclical peak. Corrections are common, and happen, on average, about once a year in equity markets.
The recent bull run in the US equity market has not been interrupted by a correction since January 2016, so it would appear that one is well overdue.
Equity valuations are looking lofty - particularly in the high-flying technology sectors that have seen the biggest gains in the past year or so. So why are equity markets continuing to break record ground?
"It is quite common for interest rates, government bond yields and equity prices to rise at the same time, so long as investors have a growing appetite for risk and a positive view of corporate earnings," says John Higgins at Capital Economics.
Indeed, data from FactSet show that out of the companies on the S&P 500 that have reported earnings so far, more than three quarters have delivered positive earnings surprises, while 81% have reported positive sales surprises - a record level.
On Tuesday this week, however, there was just a hint that the market was beginning to turn. As the US 10-year Treasury yield climbed more than 10 basis points in less than a week, equity markets fell sharply.
US indexes fell more than 1% before recovering some poise by the close, then Asian stocks were rocked, leaving the Nikkei 225 in Tokyo 1.43% lower. European stocks followed suit, falling more than 1% before recovering US markets helped mitigate some of Europe's losses.
Meanwhile, Europe's equity markets are being led lower on Thursday by Germany's Xetra Dax, down 1.4%.
A broad equity sell-off over just a couple of days is hardly an indication of a looming correction and a wholesale portfolio switch from risky stock markets to bond havens.
But the recent activity in bond markets presents a very simple question, says Hussein Sayed, chief market strategist at FXTM: "Why would I remain in equities when two-year Treasury bills can provide the same dividend yield return of the S&P 500 at 2.12%?"
The question will become more pertinent should volatility return to equity markets in the coming weeks. At current levels, between 10-15 points, the CBOE Vix index of implied volatility on the S&P 500 presents no worry.
But on Monday this week - the day before the equity market sell off - the Vix jumped more than 20% in one day. Although the index remained well below the 20 level at which some traders begin to get a little nervy, it served as a reminder that a correction could be just one small catalyst away.
Sayed says: "This combination of higher bond yields and the VIX increase, are catalysts for a further correction in the days to come, so keep a close eye on these two indicators."
But at the moment, it appears investors still expect the equity markets to continue higher. Earnings forecasts remain upbeat - in the US particularly, after President Trump's recent tax overhaul. Economic growth continues - in most countries without the usual caveat of higher inflation.
Inflation a marker
Presumably, however, inflation will return. At this point, tighter monetary policy is likely to catch up with economic growth. If growth expectations begin to fall, so too will earnings expectations.
"We aren’t at this point yet," says Higgins. "But we suspect that signs of an economic slowdown will become apparent later this year, setting the stage for a significant correction in the S&P 500 before the end of 2019."
Miles Eakers, chief market analyst at Centtrip, agrees: "Elevated US stock market prices are showing optimism around future earnings. But should earnings disappoint, we will expect a long-awaited correction in risk appetite."
But, in the meantime, the government bond sell-off continues as inflation expectations build. Close to publishing time on Friday, the 10-year Treasury yield was closing in on 2.8%, a mark last reached in early 2014.
And equity markets in Europe were quick to notice: the EuroStoxx 50 fell 0.92% by late morning in London as Germany's Dax lost 1.21%, France's CAC 40 shed 1.22% and Italy's FTSE MIB dropped 1.34%.
When such equity market drops follow record quarterly results from the likes of Amazon and Apple, the message is clear that investors fear profits can't continue to push new boundaries indefinitely.