Treasury yields fell from their session highs on Tuesday, after U.S. equities gave back ground even as China said it would launch fiscal stimulus measures to spur infrastructure spending across the second largest economy in the world.

What are Treasurys doing?

The 10-year Treasury note yield TMUBMUSD10Y, +0.00%  was virtually unchanged at 2.140%, after touching an intraday peak of 2.177%, while the 30-year bond yield TMUBMUSD30Y, -0.34% was down 0.6 basis points to 2.617%. The 2-year note yield TMUBMUSD02Y, +0.62% was up 2.2 basis points to 1.922%. Debt prices move in the opposite direction of yields.

What’s driving markets?

China’s state news agency Xinhua said on Monday that local governments and financial institutions should make use of special bonds to ramp up infrastructure investment throughout the country. Investors have looked toward China’s stimulus to reflate an anemic global economy even as Beijing attempts to navigate a simmering trade spat with the U.S.

Trump warned China’s President Xi Jinping on Monday that he would levy tariffs on another $300 billion of imports if they did not meet at the G-20 meeting held in late June.

Demand for Treasurys waned and then waxed in line with the stock-market’s movements. The S&P 500 SPX, -0.03% initially climbed in early trading but struggled to push above the 2,900 level.

Global equities achieved hefty gains. China’s CSI 300 index 000300, +3.01% climbed 3%, while the Stoxx Europe 600 index SXXP, +0.69% rose 0.7%.

The Treasury Department’s sale of $38 billion 3-year notes attracted strong appetite from bond investors. The ratio of bids accepted to bids received for the sale, or the bid-to-cover ratio, sat at 2.62 times, slightly above the average in auctions held during the last 12 months. Sales for government paper can influence trading in the outstanding debt market.

What did market participants say?

Analysts say the solid reception for the auction of 3-year notes, sensitive to expectations for Federal Reserve policy, could reflect the expectation for rate cuts this year.

“Too early to say for June and July but it’s certainly a message and belief where interest rates are likely going in the next few years on the short end. In this case, that means lower. As for next week, I think there is zero chance they cut as it makes no sense to ahead of the Trump/Xi meeting,” said Peter Boockvar, chief investment officer for the Bleakley Advisory Group.

What else is on investors’ radar?

In economic data, producer prices for May rose 0.1%. The NFIB’s small-business optimism index rose to a seven-month high of 105 in May.