Rattled investors took refuge in U.S. government bonds after stock markets dropped around the world.
Investors were alarmed by the deepening political turmoil in Greece, which threatens to undermine that country's financial rescue program.
The leader of a left-wing party declared that Greece was no longer bound by its pledges to impose steep spending cuts in return for relief from international lenders. Alexis Tsipras is struggling to form a new government two days after Greek voters vehemently rejected mainstream politicians but failed to produce a clear winner in parliament.
The price of the 10-year Treasury rose 28 cents for every $100 invested. Its yield dropped to 1.84 percent from 1.88 percent. It was the lowest yield since February.
Tsipras, however, is not expected to be able to form a governing coalition either. That means another general election is increasingly likely, possibly next month. That would threaten the country's ability to pass more budget cuts, as it was scheduled to do next month, to qualify for more rescue loans.
If Greece can't stay solvent, it risks falling out of the euro zone, which could disrupt financial markets around the world.
Against that backdrop, European markets suffered heavy losses. Britain's FTSE 100 fell 1.8 percent, Germany's DAX lost 1.9 percent, and France's CAC-40 shed 2.8 percent. On Wall Street, the Dow Jones industrial average ended down 0.6 percent. It was down as much as 1.5 percent earlier.
Also Tuesday the Treasury Department sold $32 billion in 3-year notes. There were $3.65 worth of bids for every dollar in notes sold, above the average of $3.46 over the previous four auctions, according to broker CRT Capital Group.
The notes yielded 0.362 percent, the lowest level since February.
In other trading, the price of the 30-year Treasury bond rose 50 cents, sending its yield down to 3.03 percent, from 3.07 percent Monday.
The yield on the two-year Treasury note was unchanged at 0.26 percent. The yield on the three-month Treasury bill rose to 0.09 percent from 0.08 percent late Monday.