The benchmark 10-year Treasury yield broke below 0.4% for the first time ever as coronavirus fears, coupled with an all-out oil price war, sent investors flocking to safer government bonds.
The yield on the benchmark U.S. 10-year Treasury briefly touched an all-time low of 0.3469% in overnight trading. Bond yields move inversely with prices. The benchmark rate has tumbled 40 basis points in March alone. The 30-year Treasury yield also hit a record low of 0.7104%, breaching the 1% threshold for the first time in history.
Around 6:30 a.m. ET, the yield on the benchmark 10-year Treasury note was at 0.465%. The yield on the 30-year Treasury bond was at 0.873%. 
The fast-spreading coronavirus kept investors on edge for weeks as the outbreak has the potential to disrupt global supply chains and tip the economy into a recession. As of Sunday, global cases of the infection have climbed to more than 109,000 with at least 3,801 deaths around the world.
Adding to the stress is a shocking all-out oil price war after OPEC talks collapsed last week. Saudi Arabia on Saturday slashed official crude selling prices for April, in a sudden U-turn from previous attempts to support the oil market as the coronavirus hammers global demand.
Stock futures tumbled in overnight trading, with the Dow Jones Industrial Average set to open more than 1,300 points lower. The Dow and the S&P 500 both fell into correction territory as worries over the coronavirus deepened.
“There has been an extreme ‘risk-off’ move in the financial markets due to the fear surrounding the COVID-19 virus and the most recent Saudi oil decision,” Tony Dwyer, Canaccord Genuity’ market Strategist, said in a note on Sunday. Dwyer expects yields to rebound sharply like they did during the financial crisis.
“There was a sharp spike in rates following that extreme in 2008 and we expect something similar as the global monetary and fiscal stimulus is rolled out,” Dwyer said.
The Federal Reserve slashed interest rates by half a percentage point last week in between its policy meetings, the first such emergency cut since the financial crisis. The market has already priced in more aggressive easing a 75 basis point reduction at the Fed’s March 18 meeting, according to the CME FedWatch tool.
While the coronavirus poses a new threat to the global economy, the bond market has been flashing various warning signs about the economy for a while now. Last summer, the benchmark 10-year yield dipped below the 2-year rate, inverting a key part of the yield curve. The inversion has been a reliable recession indicator as the phenomenon has preceded every recession over the past 50 years.
CNBC’s Michael Bloom contributed reporting.