U.S. sovereign bonds extended gains Wednesday after the Treasury Department saw good demand at a 10-year note auction and amid a slide in Wall Street stock indexes.
The Treasury on Wednesday sold $23 billion in 10-year notes at a high yield of 1.71 percent. The bid-to-cover ratio, an indicator of demand, was 2.68, versus a recent average of 2.62.
Indirect bidders, which include major central banks, were awarded 73.5 percent. Direct bidders, which include domestic money managers, bought 11.8 percent.
Brent and WTI crude futures traded in a back-and-forth range and held higher into the afternoon. This came amid record oil inventories and reports of a gradual ramp-up in Canadian oil sand production that put pressure on markets.
U.S. stocks dipped, with each of the major averages losing more than 0.8 percent.
Economic data to watch for include April's Treasury budget and crude inventories, which were bullish for the market.
The U.S. dollar index fell against a basket of currencies to 93.82. Goldman Sachs said on Wednesday that it expected the dollar to rise 15 percent over the next two years as U.S. monetary policy normalizes.