By Sunny Oh

Prices for U.S. government bonds rose, pushing yields lower, Monday after the Treasury Department said it was planning to restrict firms with at least 25% Chinese ownership from buying a piece of leading U.S. technology firms.

What are Treasurys doing?

The 10-year Treasury note yield fell 1.6 basis point to 2.884%. The 2-year note yield ticked lower by 0.9 basis point to 2.541%, while the 30-year bond yield fell by 1.3 basis point to 3.031%.

Bond prices move in the opposite direction of yields.

What's driving the market?

Trade concerns flashed again after the Treasury Department said it was drafting limits on Chinese investment into U.S. companies with "industrially significant technology," a government official with knowledge of the matter said on Sunday (http://www.marketwatch.com/story/trump-seeks-curbs-on-chinese-investment-in-us-tech-firms-exports-to-china-2018-06-24). Plus, the National Security Council and the Commerce Department are coming up with export controls to prevent important technologies from being sent to China. The plans will be announced by the end of next week.

These curbs come on top of the tariffs that President Donald Trump imposed on $50 billion of Chinese imports. Trump also threatened an additional levy on $400 billion of imports, if Beijing attempted to retaliate.

See: Trump's latest threat to U.S. trade partners: Drop tariffs or face consequences (http://www.marketwatch.com/story/trumps-latest-threat-to-us-trade-partners-drop-tariffs-or-face-consequences-2018-06-24)

Read: Trade-war tracker: Here are the new levies, imposed and threatened (http://www.marketwatch.com/story/trade-war-tracker-here-are-the-new-levies-imposed-and-threatened-2018-06-22)

With a return of trade tensions kicking off the week, investors bought haven assets like U.S. government paper even as they fled from stocks. Stock futures suggested the market was set to open lower. Futures for the Dow were down 0.7%, while the S&P was down 0.5%.

Investors will also handle a wave of bond auctions from the Treasury, with around $100 billion of coupon-bearing debt set to go on the block between Tuesday to Thursday. So far, market participants have taken down the increase in bond auction sizes with little impact on trading.

What did market participants say?

"Stocks are reacting much more than bonds to the latest round of pending trade disagreements. Yields are lower again this morning, but not on any buying push. The set up to sell into this week's Treasury auctions -- and possible corporate issues -- had to shift into reverse," said Jim Vogel, interest-rate strategist for FTN Financial, in a Monday note.

What's on investors' radar?

The Chicago Fed's National Activity Index for May was set to come in at 8:30 a.m. Eastern. Soon after, May's new home sales figures are projected to hit an annual pace of 668,000 from economists polled by MarketWatch, up from April's 662,000 pace.

(END) Dow Jones Newswires

June 25, 2018 08:23 ET (12:23 GMT)