On Friday, the bond market once again flashed what has historically been a reliable sign of an impending U.S. recession -- an inverted U.S. Treasury bond yield curve -- after trade tensions with China heated up, triggering a 2.6% sell-off in the broader stock market. This indicator has occurred several times since Wednesday, Aug. 14, when it spooked the market and resulted in the S&P 500 index falling nearly 3%.
The inverted yield curve first sounded the economic-downturn-ahead alarm in March, but last week marked the first time since late 2005 that there was an inversion on what's considered the main part of the yield curve.
If this leading inverse economic indicator still has its good predictive mojo, the stock market's roaring, decade-long bull market could be coming to an end. Here's what you should know.