Investors on Tuesday cranked up their bets on monetary tightening from the Federal Reserve, reigniting a sell-off in Treasuries and pushing US stocks to multi-month lows.

Treasury yields jumped to a two-year high as traders returned from the long weekend in the US, with markets for the first time fully pricing in four interest rate increases from the US central bank this year. The benchmark S&P index fell to its lowest level since December, while the tech-heavy Nasdaq hit its lowest point since October.

The yield on the 10-year US Treasury note, which rises as the price of the global government debt benchmark falls, climbed 0.09 percentage points to 1.87 per cent as the prospects of higher rates on cash deposits and sustained inflation made the security’s fixed-interest payments less appealing.