NEW YORK: Treasury prices increased on Wednesday as investors remained wary  of volatile equity markets, though Treasury yields rose from  three-week lows reached on Tuesday as stocks pared losses.

Growth concerns about China, disappointing corporate earnings and tensions between Italy and the European Union over Italy's spending plans sent stock markets tumbling on Tuesday, and prompted demand for low risk U.S. government bonds.

Now, "the market's trying to find a short-term range as everyone evaluates different global events going forward," said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York.

Benchmark 10-year notes gained 9/32 in price on the day to yield 3.13 percent, up from a three-week low of 3.11 percent on Tuesday. The yields rose to 3.17 percent late on Tuesday as stocks recovered, before renewed bond buying sent yields back lower on Wednesday.

Stock volatility has raised some concerns that equity markets and the economy may not be as strong as previously thought, which could give second thoughts at the Federal Reserve about being aggressive in raising rates.

At the same time, investors fear that inflation pressures are on the rise.

Atlanta Fed President Raphael Bostic said on Tuesday that business contacts are indicating that they are starting to pass through the costs of trade tariffs.

The Treasury Department will sell $39 billion in five-year notes on Wednesday, the second portion of $108 billion in short and intermediate-dated debt this week.

Investors are watching the auctions for any signs of weakness as the U.S. government increases supply to pay for tax cuts and a worsening budget deficit.

A $38 billion sale of two-year notes on Tuesday was marked by solid demand.

The Treasury will also sell $31 billion in seven-year notes on Thursday.

This week's economic focus is Friday's reading of gross domestic product for the third quarter.