As stocks rallied Tuesday, bonds sold off. Third-quarter GDP growth was revised to a stunning 5 percent, and November consumer spending was up a strong 0.6 percent. But durable goods surprised to the downside, and traders said the markets were more influenced by year-end positioning than any news.
Read MoreAs American economy roars, US dollar soars
The two-year note late Tuesday was yielding 0.73 percent, the highest level since 2011. But the two-year has also been selling off on the anticipation of Fed rate hikes next year.
"Two-years tend to lead short-term rates higher when it anticipates that the Fed is going to begin to tighten," said Ward McCarthy, chief financial economist at Jefferies. "You can see it in some of the bills."
Read MoreThese stocks are biggest winners from oil meltdown
The 10-year was yielding 2.26 percent late Tuesday.
"In volume terms, this is the sixth-quietest day of the year," said David Ader, chief Treasury strategist at CRT Capital. "We're coming in to a thinly traded, illiquid time of year. People have gotten through a refunding, they've gotten through this week's auctions, and I think they were holding on and probably got here, and they got stopped out."
Read MoreWhy repeat of blowout GDP not likely
As for stocks, traders say they could continue to drift higher on year-end buying. Data expected to be released include weekly mortgage applications at 7 a.m. ET and weekly jobless claims at 8:30 a.m.
Stock traders are also watching the price of oil, up sharply Tuesday after selling off Monday.
The key is whether oil holds the low from week, at around $54 per barrel for West Texas Intermediate futures. Oil inventory data is released by the government at 10:30 a.m., and that could be market moving Wednesday.
Stocks close at 1 p.m. for the Christmas holiday, and reopen for a full trading day Friday morning.
CORRECTION: This story has been updated to show that weekly mortgage applications data will be released on Wednesday.