U.S. Treasury prices are extending their Monday losses, pushing yields back to multi-year highs; the yield on the benchmark 10-year note is up 6 bps at 3.06%, which marks its highest level since July 2011, and the two-year yield is up 2 bps to 2.56%, its highest level since August 2008.
Bond prices fell, sending yields higher, after the government reported a solid increase in USA retail sales last month.
The yield, a barometer for mortgage rates and other financial instruments, has jumped recently on signs of rising inflation, which sparked market speculation for more rate hikes later this year.
US equity markets closed solidly lower on Tuesday with the Dow industrials halting their eight-day advance. The Nasdaq composite tumbled 1% and the S&P 500 0.8%. Smaller rival Lowe's Companies Inc was down 1.0 percent.
Banks, which stand to prosper because of higher interest rates on loans, bucked the downward trend. The Dow lost 0.8 percent, to 24,706.41. The Nasdaq composite fell 60 points, or 0.8 percent, to 7,349.
The North Korean announcement sent South Korea's Kospi 0.2% lower.
The yield on the 10-year Treasury rose to 2.99 percent.
"Yields on treasuries with shorter maturities are at their highest closing and intraday points in about a decade, continuing the basis point increases that began in September 2017 and have sustained so far this year", Tradeweb noted.
The Nasdaq climbed 8 points, or 0.1 percent, to 7,411.
The Federal Reserve has signaled it will raise rates twice more this year, after having done so in March, and most economists foresee the next increase in June.
"The stock market was due for a digestion of the gains that we've seen over the last eight trading sessions", said Quincy Krosby, chief market strategist at Prudential Financial. Small-company stocks also rose.
Viacom slumped 6 percent and CBS rose 4 percent after CBS sued to block efforts to force the company combine with Viacom. Apple Inc. fell 0.9%.
In Asia, Japan's benchmark Nikkei 225 edged down 0.2 percent. Hong Kong's Hang Seng fell 0.8%. Germany's DAX fell 0.1 percent after new data showed the country's economy slowed in the first quarter.
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