A number of state and local government debt deals were postponed on Tuesday, as the asset class recorded a second painful trading session.

Louisiana delayed the sale of $351 million of muni bonds set to be sold via auction on Wednesday, according to a spokesperson for the treasurer’s office. And a senior living center in Massachusetts shelved a $133 million sale as did school districts in California and Florida.

Benchmark bond yields jumped as much as 25 basis points on Tuesday, following a surge on Monday. Ten-year, top-rated bonds are yielding 3.5%, nearly 60 basis points higher than where they ended last week, according to data compiled by Bloomberg.

The state and local debt selloff followed a Treasury rout this week. The muni market’s core mom-and-pop investor base may be selling their holdings in order to buy stocks or raise cash as they ride out the wild volatility amid President Donald Trump’s tariff plans, investors and analysts said. At the same time, supply has stayed heavy in 2025, and March and April tend to be tougher months for performance because investors sell their holdings to pay taxes.

“Retail doesn’t buy to lose money in fixed income, especially muni bonds,” said James Pruskowski, chief investment officer at 16Rock Asset Management. “High cash yields make for an easy excuse just to get out.”

The amount of municipal bonds out for bid on Bloomberg’s platform totaled more than $3 billion on Tuesday, the most since March 2020. That measure signals investors were unloading the securities en masse, causing prices to drop.

“We’ve seen bid wanteds move much higher,” said Cooper Howard, a fixed income strategist at Charles Schwab. “There’s a significant amount of selling pressure and deals have been pulled back.”

‘Everything Went Sideways’

Ronald Fagan, chief financial officer for Duval County Public Schools in Jacksonville, Florida, said he was hopeful about market conditions during last week’s rally. He came in on Monday and “everything went sideways,” he said. His school district is looking to do a debt refinancing and he hopes that the deal can get done this week if the market calms down.

The market volatility also delayed a $125 million sale from the Indianapolis Local Public Improvement Bond Bank which is borrowing to help fund the Blue Line, a component of the city’s bus rapid transit system, said Joe Glass, executive director of the bond bank. Glass said they initially offered an order period to investors but ultimately decided to move the transaction day-to-day.

Last week “you saw some deals do extremely well and you couldn’t get enough bonds,” said John Flahive, head of fixed income at BNY Wealth. “Obviously that’s completely done a 180.”

He said the market needs new deals to get pulled so it can stabilize.

New York City proceeded with a bond sale on Tuesday. Debt due in 2035 priced to yield 3.81%, 55 basis points higher than AAA debt.

“Given the city’s large capital needs, we price our deals in both good markets as well as less favorable markets,” said Liz Garcia, spokeswoman for New York City’s mayor’s office. “Today’s sale represented continued demand for city bonds, with yield adjustments in line with movement in the broader municipal bond market.”

— With assistance from Elizabeth Rembert, Maxwell Adler, Michelle Kaske, Shruti Date Singh, Sri Taylor and Navaya Misra.