U.S. Treasury yields pulled back on Tuesday after the latest economic data signaled easing price inflation.
The yield on the 10-year Treasury yield fell more than 8 basis points to 4.137%. The 2-year Treasury yield dropped more than 5 basis points to 4.552%.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
Treasurys
The ISM services index reported Tuesday showed businesses were still reporting expansion, but less than economists forecasted. The index also showed a notable decrease in the expected pace of future price increases, a welcome sign on the inflation front.
Later in the week, investors will watch for ADP's private payrolls report on Wednesday, followed on Friday by official Labor Department figures on February jobs, for insights into the labor market.
Investors are hoping the data will indicate that the job market is cooling, paving the way for interest rate cuts later in the year.
Uncertainty about the outlook for rate cuts has been persistent as Federal Reserve officials have given few indications about a timeline and recent economic data has painted a somewhat mixed picture.
Investors will also closely monitor testimony that Fed Chairman Jerome Powell is due to give the House of Representatives on Wednesday and to the Senate on Thursday.
Powell may offer fresh hints on how much scope policymakers believe exists for future rate cuts as part of the central bank's economic outlook.
— CNBC's Jeff Cox contributed to this report.