Treasury bonds pulled back Tuesday as investors cashed in some chips following two days of price gains.

In recent trading, the benchmark 10-year note was 3/32 lower, yielding 2.505%, according to Tradeweb. Bond yields rise when their prices fall.

Government bonds in the euro zone and the U.K. also fell broadly Tuesday. The yield on the 10-year German government bond rose to 1.173% and the yield on the 10-year U.K. government debt increased to 2.575%.

Greece led the selling in euro zone's government-bond markets, with the yield on the nation's 10-year bond climbing more than 0.2 percentage point to 6.395%.

Despite the setback, the U.S. 10-year note's yield is trading near this year's low of 2.4% made on May 29. The yield was 3% at the start of January.

Worries that the Federal Reserve may raise interest rates sooner than investors expect have receded following Friday's U.S. employment report. The U.S. economy added a smaller-than-forecast 209,000 nonfarm payrolls in July while wage pressure remained contained.

Bond investors will keep watching U.S. data releases for clues on the Fed's interest-rate policy outlook.

On Tuesday, the main release is the monthly gauge of the U.S. service sector which is scheduled to be released by the Institute for Supply Management at 10 a.m. EDT. Economists expect the index to have ticked up to 56.5 last month from 56 in June.

Factory orders for June will also be released at 10 a.m. EDT.

An uneven pace of global growth, geopolitical tensions in Ukraine and the Middle East as well as continued ultralow interest-rate policy from major central banks have all propped up U.S. government bond prices and lowered their yields.

U.S. bonds offer superior yields compared with their peers in Germany and Japan, which have lured investors seeking relative value. The yield premium investors get by holding the 10-year Treasury note instead of the 10-year German government bond has climbed in July to the highest level since 1999.

Traders expect the 10-year note's yield to trade between 2.4% and 2.6% in the next few weeks.

Interest-rate strategists at U.S. big banks including Goldman Sachs Group Inc. still expect the 10-year yield to rise to 3% by the end of the year.