* Tech-fueled stock rally fades amid market correction fears * US government shutdown leaves bond market directionless * Investors await ADP report, Treasury's quarterly refunding plans (Adds new comment in paragraphs 5-6, 14; updates yields) By Davide Barbuscia and Gertrude Chavez-Dreyfuss NEW YORK, Nov 4 (Reuters) - U.S. Treasuries rose on Tuesday, pushing yields lower, with a boost from safe-haven bids amid concerns that overstretched valuations in stocks and corporate bonds could eventually lead to a market correction. A tech-fueled stock rally lost momentum, as top Wall Street executives including the chief executives of Morgan Stanley and Goldman Sachs cautioned that equity markets could be heading toward a drawdown. The economic calendar was empty due to the U.S. government shutdown, which on Tuesday entered its 35th day, matching a record set during President Donald Trump's first term for the longest in history. This left the bond market directionless, except for safe-haven demand spurred by fears of a market bubble in stocks. "There's definitely a risk-off tone with a lot of AI stocks down, and so a little bit of flight to quality with regard to Treasuries," said Greg Faranello, head of U.S. rates strategy at AmeriVet Securities in New York. "Rates are a little bit lower, Treasuries are firmer, but we're still well off the yield lows that we've seen over the last two to three weeks." In afternoon trading, the benchmark 10-year yield was last at 4.089%, about 1.8 basis points lower on the day. Further out the curve, 30-year yields declined 2.1 bps to 4.669%. On the shorter end of the curve, two-year yields , which reflect interest rate expectations, were at 3.58%, about 1.8 bps lower. The declines in yields tracked falls on Wall Street, where the Nasdaq composite <.IXIC> posted the biggest loss on the day among the main indexes, at nearly 2%. "The stock market one day feels very euphoric and the next day very scary. That alone is probably an indication that it's becoming a bit unstable, at least in terms of the outlook," said Jay Menozzi, chief investment officer and senior portfolio manager at Easterly Orange. Because of the government shutdown, a closely watched monthly jobs report from the Bureau of Labor Statistics will not be available on Friday, as previously scheduled. Investors will be relying instead on the ADP employment report, an independent survey that is due on Wednesday, to assess the health of the labor market and the potential for additional interest rate cuts by the Federal Reserve at its next policy meeting in December. U.S. rate futures pricing on Tuesday showed a 67.2% chance of another 25-bps rate cut in December, according to LSEG calculations, declining from last week's 85% implied odds. Fed Chair Jerome Powell has dampened expectations of easing in December amid a sharply divided view on monetary policy among members of the policy-setting committee. "Our bias is that if we're priced for another 25 basis-point cut, the Fed will likely take it and go," said AmeriVet's Faranello. "But we have a lot of time between now and then, and we're going to try and sift through as much private-sector data as we can." Also on deck on Wednesday, the Treasury Department will release details of its quarterly refunding plans, which bond investors will watch closely to assess how the government plans to finance its deficits. (Reporting by Davide Barbuscia and Gertrude Chavez-Dreyfuss; Editing by Peter Graff and Edmund Klamann) ((davide.barbuscia@tr.com; gertrude.chavez@thomsonreuters.com; 646-301-4124)) Keywords: USA BONDS/ (UPDATE 1)
