It FINALLY happened. Bonds finally had a sizable rally yesterday, pushing the yield on the 10-year Treasury Note from an intraday high of 4.88% down to 4.74%. As rates and the US dollar fell, stocks rallied.

Now it’s all about whether we get follow-through. So far, most markets are flattish. But crude oil is down again this morning after dropping 5%-plus yesterday.

On the news front...

The recent move in rates has been big. The 10-year yield alone has surged more than half a percentage point (50 basis points) in just a couple of weeks. The mystery is...why so much and why now? Even Chicago Fed President Austan Goolsbee admitted in a Bloomberg interview the move was “still a puzzle.”

CBOE 10-Year Treasury Yield Index (TNX)

Sure, the “higher for longer” outlook from the Federal Reserve contributed. And sure, there has been talk of foreign bond selling. But the inflation data has improved a bit more, and the rate futures market is only pricing in about a one-third chance the Fed will hike another 25 bps before the end of this year.

Could it be concern about deficits? Government dysfunction? Something else? Even the sharpest minds on Wall Street aren’t sure.

Strategists at Barclays weighed in with some “good news” on the selling though: It can be stopped by something. The “bad news”? That “something” would be a plunge in risk assets (read: stocks).

As for the drop in crude oil, it stemmed from fresh data showing a decline in US gasoline demand. A measure called “finished motor gasoline supplied” in the latest Energy Information Administration (EIA) report dropped to 8 million barrels per day. That was the lowest all year. A separate JP Morgan analysis found US gas consumption is running around its lowest in 22 years.