U.S. sovereign bond prices held higher Tuesday after the Treasury Department auctioned $24 billion of three-year notes to weak demand.
Bonds had climbed earlier in the day, sending yields lower, as equity investors paused for breath after a recent rally and digested weaker-than-expected trade data from China.
The Treasury sold the three-year notes Tuesday at a high yield of 1.039 percent.The bid-to-cover ratio, an indicator of demand, was 2.71, the lowest since July 2009.
Indirect bidders, which include major central banks, were awarded 46.2 percent. Direct bidders, which includes domestic money managers, bought 9.1 percent.
Global equities have rallied recently, but U.S. stocks fell on Tuesday, helping safe havens like Treasurys. Sentiment in equity markets appeared to have turned by Tuesday morning, with Asian and European indexes posting losses ahead of the fall in the U.S.
China's trade data overnight showed February exports falling 25.4 percent in U.S. dollar terms, while imports fell 13.8 percent, with both declines wider than expectations. The drop in exports was the largest on-year drop since 2009, according to Reuters.
Back in the U.S., the National Federation of Independent Businesses (NFIB) released its business optimism index, which fell last month amid sales growth concerns and hurting profits due to capital spending and hiring plans. Two key Fed officials said Monday they expected inflation to get closer to the central bank's target.
In separate prepared remarks in Washington, neither Fed Vice Chairman Stanley Fischer nor Governor Lael Brainard made direct reference to next week's meeting of the Federal Open Market Committee. But Brainard argued for patience in rate increases amid possible risks that inflation and U.S. economic activity will fall.
—CNBC's Jacob Pramuk and Reuters contributed to this article