US Treasury yield is trading in a range that implies some investors are pricing in stagflation, according to one strategist.

The bond market has a sleepy reputation, but it can pack a punch when alarmed. And worries are now growing about tax cuts pushed by Washington and how they'll inflate the U.S. government's debt.

The Dow closed lower by 817 points, or 1.91%. The broader S&P 500 slid 1.61% and the tech-heavy Nasdaq Composite fell 1.41%. The three major indexes each posted their worst day in one month.