U.S. Treasury bonds jumped to session highs on Wednesday, after final first-quarter U.S. gross domestic product came in much weaker than expected.

Yields on benchmark 10-year Treasury notes (U.S.:US10Y)-used to calculate mortgage rates and other consumer loans-tumbled to 2.532 percent, following Tuesday's five basis point decline.

Read More CNBC explains: Bonds and rates

The GDP report revealed a sharper contraction than expected of nearly 3 percent, rather than the annualized 1.0 percent contracted that has been previously indicated.

Other data out Wednesday included durable goods orders for May, which also came in softer than expected.

Read More Shrink wrapped: US economy contracted sharply in Q1

The Treasury is scheduled to auction $35 billion in five-year bonds (U.S.:US5Y) and $13 billion in two-year floating rate notes (FRNs). This follows a somewhat lackluster sale of two-year fixed-rate notes (U.S.:US2Y) on Tuesday.

On the demand side, the Federal Reserve will purchase $2.25-2.75 billion of notes.

Read More CNBC explains: Treasury bond prices and yields

Concerns over Iraq continue to weigh on global markets. There is little indication the country's leadership is responding to pressure by foreign leaders to reform government in an attempt to stem the Sunni insurgency. U.S. Secretary of State John Kerry was in Iraq's Kurdistan region on Tuesday, as Iraqi government forces fought militants for control of the country's biggest oil refinery.

The Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) posted its biggest one-day drop in a month on Tuesday, despite a raft of positive data. Consumer confidence surged more than expected in June, new home sales for May rose more than forecast and the S&P/Case-Shiller home price index showed a 10.8 percent annual increase.

-By CNBC's Katy Barnato