NEW YORK — The Dow Jones Industrial Average sank 800 points after the bond market flashed a warning sign about a possible recession for the first time since 2007.

The yield on the 10-year Treasury briefly dropped below the two-year yield Wednesday, an ominous signal that has predicted past recessions.

“Normally in interest rates, long-term interest rates are higher than short-term interest rates, so this is a significant change when something like this happens,” said Mac Clouse, a professor of finance at the University of Denver.

But Clouse says he doesn’t believe a recession is coming.

“The market is really overreacting to some interest rate information,” he said.

At the University of Colorado Denver, Yosef Bonaparte has been researching yield curves for years, and also believes concerns over a recession are overblown.

“I suggest do nothing, enjoy the day, ride the volatility,” he said. “There is psychological research that shows people remember bad things. So they still remember 2007 — what happened with this inverted curve, and then in 2008, the financial crisis,” Bonaparte said.

He says low unemployment and strong spending among consumers will prevent another recession.

“One-hundred percent, there won’t be a recession,” Bonaparte said.

Investors have been plowing money into long-term U.S. government bonds for months, sending yields sharply lower, as they anticipate slower economic growth.

Macy’s plunged 13% after slashing its full-year profit forecast.

The Dow Jones Industrial Average fell 800 points, or 3%, to 25,479.

The S&P 500 lost 85 points, or 2.9%, to 2,840. The Nasdaq lost 242 points, or 3%, 7,773.

Bond prices soared. The yield on the 10-year Treasury sank to 1.58% from 1.68% Tuesday, a big move.