NEW YORK (CNN/Money) - Wall Street equity traders weren't the only ones on a roller coaster ride today: A powerful rally in the bond market stopped dead in its tracks after a stunning reversal in the stock market. If the stock bear is going into hibernation, then bond bulls are likely to turn tail and run.

Early on the yield on the government's two-year note hit a low of 2.06 percent -- a new record. Traders said that "risk aversion" took over as the overnight drop in European stock markets and the initial steep losses in U.S. stocks fueled fears of another stock market meltdown.

Another catalyst for the early bond market rally: lingering worries over the investigation into Citigroup and J.P. Morgan Chase and their dealings with Enron. The question for bond traders is how that could affect the banks' bottom lines and ultimately their credit quality.

"There was continued fear that there might be more than meets the eye, more than has already happened," according to Jerome Lacey, who trades bonds at the Chicago Board of Trade for Prudential Financial (I interviewed him on CNNfn's Halftime Report today). "And if that, in fact, happened, there may be a credit crunch, a liquidity crisis, call it what you will," he said.

But when stocks started turning around, the bond market party was over. Prior to the U.S. Treasury's $27 billion dollar note sale Wednesday, traders thought the new paper would sell at a yield around 2.10 percent. But as stocks roared higher, expectations for a continued "flight to safety" by investors started to dry up. In the end, the two-year note sold at a much higher 2.27 percent.

Let's keep this in perspective, though. Just three weeks ago the government sold two-year notes at a yield of 2.97 percent, so short-term yields remain at very low levels.

What next? Depends on how badly the U.S. economy is damaged by the recent rout in stocks. If people keep spending and if businesses keep getting new orders for their goods, then talk of a double-dip recession and a possible rate cut by the Federal Reserve will dissipate. (At the height of the bond market rally this morning, there were rumors of an emergency meeting by the Fed to discuss a rate cut -- typical in moments of market "near-hysteria.") And that would argue for bond yields to retrace their recent declines.

But those are some pretty big ifs. Is today's stock rebound a one-day wonder? Have we seen the last of Citigroup and J.P. Morgan Chase's allegedly dirty laundry?

Kathleen Hays co-anchors Money & Markets, airing Monday to Friday on CNNfn, and appears throughout the day reporting on the economy and how it affects financial markets. As part of CNN's Business News team, she is also a regular contributor to Lou Dobbs Moneyline.