The benchmark 10-year US Treasury yield has returned to its highest level since 2011. after strong retail sales and production data.
The rise in yields hit equities, opening Tuesday deeper.
Investors are betting that the Federal Reserve will maintain its aggressive stance, even if it annoys the financial markets a bit. For the first time on Monday, traders gave the CME a 51 percent chance of a fourth rate hike by the Fed this year. The strong data on Tuesday will only increase the ranks of traders and investors with this conviction.
Yields have risen this month since the Fed said on May 2 that inflation was approaching its 2 percent target. The next Fed meeting will take place on 12 June.
The recent rise in interest rates is also taking place in the midst of a rally in oil prices, a phenomenon that could spread throughout the economy and increase input costs in several sectors.
Brent crude traded around $ 78.45 a barrel on Tuesday morning, up 0.2 percent, while US crude was around $ 70.93 a barrel, down 0.08 percent. Oil prices remained firm as market participants saw signs of continued strong demand for the product.
A Monday's OPEC report showed that oil inventories in OECD countries fell to 9 million barrels in March, the five-year average.