The broader equity market’s resilience in the face of head-spinning volatility in US rates is an anomaly within an anomaly.

By now, everyone with even a passing interest in markets has seen the visual depicting the largest three-session drop for short-end US yields since 1987.

The figure below is now enshrined in the annals of history and seared into the corneas of the humans behind various trend-following strategies wrong-footed by the second-largest US bank failure ever.

Naturally (and as discussed in these pages more times over the past week than I care to remember), the plunge in two-year yields catalyzed an equally anomalous bull steepener.

The signal from the 100bps collapse in front-end yields and accompanying ~65bps re-steepening in the 2s10s was unambiguously recessionary, notwithstanding that the entire episode was amplified by short-covering and stop-outs universally described as “brutal.”

But outside of financials, equities were largely unmoved, thanks in part to rallies in tech shares, which benefited from the drop in yields and also from the perception of “quality.”

Various explanations were offered for the broader market’s purported resilience, but one thing you should note is that it was partly a cap-weighted phenomenon, so “broad” might not be the best adjective. Regardless, the disconnect sticks out.

The move in two-year US yields was, on Barclays’ math, a near eight standard deviation event, eclipsing all such episodes, including Black Monday.

“Flights to quality of this magnitude have historically had dire implications for equities, given the tendency to portend broader financial contagion down the road,” Barclays’ Venu Krishna said, editorializing around the chart. “While it is true that each of these events were followed by Fed cuts, broader risk assets (and the US economy) were not completely unscathed,” the bank went on, in a note dated March 20. “While one can argue that the economy shrugged off the LTCM crisis and never slowed down, the rate cuts eventually fed an even greater asset bubble, which then burst that much more [spectacularly].”

As regular readers will attest, I don’t enjoy trafficking in clichés, but if ever there were an example of stocks “whistling past the graveyard” this is surely it, although, as a quick aside, I should mention that people who employ that cliché often don’t seem to understand it — the “whistler” is nervous. So, maybe it doesn’t actually apply here. Because I’m not sure everyday investors are all that concerned.

Speaking of clichés, Barclays can’t decide which is more apt:

The banking crisis puts equities on shakier footing. A roller-coaster week leaves us wondering which among the two cliché idioms best sums up the recent market events: “Tempest in a teapot” or “canary in the coal mine.” In argument for the former, reactivity among equities was mostly localized to the Financial sector and swift actions by regulators have helped shore up both market and depositor confidence. On the other hand, sharp repricing in bond markets suggests that investors are on edge, and that the Fed is entering a critical phase of its tightening campaign.