U.S. Treasuries extended their advance during afternoon trading, propelled by strong demand for a new $25 billion 30-year bond auction, resulting in a bull-flattening of the yield curve. The auction's stop-out rate came in 2.1 basis points below the pre-issuance trading level at the bidding deadline. Primary dealers were allotted a record low of 5.9%, reflecting robust investor appetite. Even before the auction began, Treasuries were well-supported amid risk-off sentiment that saw technology stocks leading declines in U.S. equities and WTI crude futures plunging.

Shortly after 3 p.m. New York time, Treasury yields remained near their daily lows, with the yield curve declining by 4 to 8 basis points across maturities in a bull-flattening pattern. The yield spread between 2-year and 10-year notes narrowed by 2.5 basis points, while the 5-year to 30-year spread contracted by 0.5 basis points. Following the strong auction, the 5-year to 30-year spread fell from around 109 basis points to 106 basis points, with the sale also driving a significant drop in long-term bond yields.

The stop-out yield for the 30-year bond auction was 2.1 basis points lower than the pre-auction trading level at the bidding cutoff. Indirect bidders took 69.9% of the offering, while direct bidders were awarded 24.2%. The bid-to-cover ratio reached 2.66, one of the highest on record, compared to an average of 2.36 over the past six new issue auctions.

Ahead of the auction, Treasuries received solid support as investors shifted toward quality assets, with technology stocks declining. Most megacap shares retreated, and an ETF tracking software companies fell 2.5%.

By the close, short-term interest rate swaps again increased bets on Federal Reserve rate cuts, pricing in about 56 basis points of reductions by year-end, up from 53 basis points at Wednesday's close.

As of 3:42 p.m. New York time, the 2-year Treasury yield stood at 3.4621%, the 5-year yield at 3.6647%, the 10-year yield at 4.1019%, and the 30-year yield at 4.7289%.

The yield spread between 2-year and 10-year Treasuries was 63.771 basis points, while the 5-year to 30-year spread measured 106.242 basis points.