U.S. bonds turned higher on Tuesday as energy shares lead a sharp stock market selloff.
Yields on the benchmark 10-year note topped 2.50 percent after the Institute for Supply Management said its services index rose to 58.7 last month, the highest since December 2005, from 56.0 in June. The reading blew past economists' forecasts of a 56.3 reading, according to a Reuters survey.
The report further encouraged speculation that Federal Reserve may start hiking interest rates sooner than expected.
Benchmark 10-year Treasury notes—whose yields are used to calculate mortgage rates and other consumer loans—turned positive, bringing the yield down modestly to 2.48 percent.
The 30-year bond also turned positive, with the yield at 3.28 percent, up 7/32 in price.