Stocks and bonds declined in response to much better-than-expected job growth. This week's consumer inflation (CPI) report could further pressure yields.

"Markets tried to front-run the Fed on the level of interest rates and are now paying the price," Jamie Cox of Harris Financial Group said.

The December jobs report showed a surprise surge in hiring and an unexpected drop in the unemployment rate. Taken together, the data strengthen the case for the Federal Reserve to maintain its current cautious stance toward lowering borrowing costs,