By Joseph Adinolfi, MarketWatch

Treasury yields extended earlier declines Tuesday after a report on U.S. manufacturing activity missed expectations.

The Institute for Supply Management said its manufacturing index dropped to 51.1% (http://www.marketwatch.com/story/us-manufacturing-growth-weakest-since-mid-2013-ism-says-2015-09-01) in August, falling short of forecasts.

Earlier in the session, yields moved lower after official data showed a slowdown in China's manufacturing sector in August.

The yield on the 10-year Treasury note was down 2.5 basis points to 2.175% in recent trade, according to Tradeweb data.

The two-year yield was down 1.9 basis points to 0.720%.

The China Federation of Logistics and Purchasing's official manufacturing purchasing managers index came in at 49.7 from 50.0 (http://www.marketwatch.com/story/china-factory-activity-slips-to-3-year-low-2015-09-01) a month ago. A reading below 50 indicates contraction.

Read:Treasurys finish flat after volatile August (http://www.marketwatch.com/story/treasurys-buoyed-as-investors-look-ahead-to-payrolls-2015-08-31)

"Bonds seem to be taking their cues from equities this morning, which are pretty broadly selling off," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott.

U.S. stocks opened sharply lower with S&P 500 sinking 1.7% to 1,938 in early trade and the Dow Jones Industrial Average was nearly 300 points lower, or down 1.7%.

Germany's DAX was down 2.9% in recent trade to 9,956, while France's CAC 40 was down 2.9% to 4,521.

Read: European markets fall as weak factory data piles on pressure (http://www.marketwatch.com/story/european-markets-fall-as-weak-factory-data-piles-on-pressure-2015-09-01)

Investors sold core European debt, sending the yields on 10-year German higher. The benchmark bund was up 1.2 basis points to 0.801%, while the French benchmark rose 1.7 basis points to 1.157%.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

September 01, 2015 10:24 ET (14:24 GMT)