Treasurys yields approached two-year highs after data in Europe showed that the region's economy is picking up steam, while U.S. retail sales data was also firm.
Gold fell 1 percent on Tuesday, weighed down by better U.S. consumer spending data and after top market India hiked its import duty on gold to a record 10 percent.
U.S. oil ended higher on Tuesday after exports from Libya fell to their lowest in two years, heightening supply worries.
CNBC's Sharon Epperson reports the latest from the metals and mining as the markets close.
Gold is taking a step back from its best rally in a month. Mike Harris, Campbell and Company, takes a look at the technicals.
European shares closed higher on Tuesday following data for the euro zone which boosted hopes the currency bloc is heading out of recession and signs of a housing recovery in the U.K.
CNBC's Bob Pisani and Art Cashin, of UBS, discuss "good enough" retail sales and whether the Fed may go ahead with a taper. in September. "The Fed is going to taper, Bernanke wants to get the process started before he's gone, and that's going to be a headwind for the stock market," says Cashin.
Asian equity markets ended at session highs on Tuesday with Japan's benchmark index leading gains by 2.6 percent as the yen weakened on news of corporate tax cuts.
The dollar rose on expectations of strong U.S. data that could signal an early scaling back of monetary stimulus.
Stocks kicked off the week on a lackluster note, with the Dow and S&P 500 extending their losses after posting their worst week since June, as investors found little reason to buy.
U.S. Treasurys traded lower on Monday in light summer trading, with no new information to break bond yields out of their recent range.
Gold rose nearly 2 percent on Monday, hitting its highest in nearly three weeks as strong Chinese gold consumption and an inflow to gold-backed exchange-traded funds fuelled hopes of resurgent physical and investment buying.
Brent crude rose on Monday as fresh export disruptions in OPEC nation Libya stoked supply concerns.
With September right around the corner, the countdown to taper has begun. The FMHR traders focus on housing and retailers. CNBC's Steve Liesman joins to discuss what the Fed will be looking at this week, and Barry Knapp of Barclays shares his price target for S&P stocks.
European shares closed mixed on Monday, with financial services stocks posting the biggest declines, amid contrasting data from Japan and China.
Markets may be too sensitive to events in Japan and not focused on the areas that really matter, like the U.S., Europe and China, Cramer said.
Market pros predicting a sharp near-term pullback are pointing to worries from Washington.
China's benchmark index shot up to a seven-week high on Monday, boosting Asian stocks across the board on optimism that the world's second-largest economy may be stabilizing, but Japan bucked the trend after weak growth data.
U.S. Treasury debt prices rose in light volume on Friday, aided by a lack of new supply and by the stock market's struggle to advance from near record-high levels.
Stocks finished the week in negative territory, with major indexes logging their worst week since June, as investors found little reason to buy following the market's recent highs and amid ongoing worries about when the Fed may start to wind down its stimulus program.
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