a lower yield spread means that the market requires less return per unit of risk lower yield spreads means that US Treasuries have a small premium over riskier bonds, thus the market is attributing a smaller premium to safe assets - a "risk-on" signal
yield spread between a safe asset and a riskier one is an expression of the required return per unit of risk higher yield spreads, means risker bonds are significantly cheaper than US Treasury bonds, thus the market is valuing safe assets with a premium - a "risk-off" signal