Markets returned to record highs during the past week, but the most important development was not in equities. It was in the bond market.

The S&P 500 recovered from the violent technology sell-off and reached a new high after one of its strongest four-day advances in decades. Microsoft rose more than 25% across several sessions, software rebounded sharply, semiconductor shares recovered and corporate earnings remained exceptionally strong. Approximately three-quarters of S&P 500 companies had reported by the end of the week, with close to 80% ex...