Treasury yields slide as surge to multiyear highs cools

U.S. Treasury yields were lower on Tuesday as a surge easing to multi-decade highs took a pause.

The benchmark 10-year Treasury yield was last down more than 4 basis points at 5.269% after reaching its highest level since April 2002 on Monday. The 30-year Treasury yield was down around 1 basis point at 5.638% following its rise to levels not seen since May 2002. The 2-Year Treasury note yield was down 4 basis points at 4.793%.

One basis point is equal to 0.01%, and yields and prices move in opposite directions.

Treasury yields soared on Monday. The 10-year and 30-year recorded 24-year highs after fresh data from the Institute for Supply Management showed cooling services growth.

The PMI reading rose to 54.9 in September, virtually in line with expectations but just below August's growth, while the prices index was up 1.4 points to 74.

Traders are now pricing in a roughly 80% chance that the Fed will keep rates unchanged at its next meeting, according to the CME Group's FedWatch tool.

The event of the week will be the release of the FOMC minutes from its September meeting on Wednesday, which investors will parse closely for clues about future monetary policy.

"The bond market is sending a more important signal right now than the stock market. The Fed controls the short end, but it has far less control over the long end," said David Miller, CIO at Catalyst Funds.