Jessica Lerner

"The equity market is looking at this more positively, but bonds are still thinking, 'Well, these tariffs still have to be resolved,'" said Kim Olsan, a senior fixed income portfolio manager at NewSquare Capital.

Municipal AAA yield curves were cut up to another 42 basis points, depending on the curve, as of noon, pushing yields to multi-year highs and long-end muni to UST ratios above 100%. Muni yields have risen up to nearly 100 basis points in spots since the bond market rout began.

Weakness in the muni market has been partly amplified by ETF selling; high-grade yields rose more than 60 basis points on parts of the curve over two sessions.

"The changing momentum on what the market is looking for on tariffs and the volatility in the equity market is spilling over into the Treasury market, and munis can only fight the Treasury market for so long," said Pat Luby, head of municipal strategy at CreditSights.

"In the aftermath of this week's Treasury yield move lower, MMD-UST ratios have reached short-term highs," Barclays strategists said.

"With the initial announcement proving to be more aggressive than expected, the market responded overwhelmingly negatively," said Principal Asset's Seema Shah.

At noon Thursday, muni yields had been bumped up to 12 basis points, depending on the curve, while UST yields rallied, with yields falling 13 basis points on the short-end.

Parity Plus gives muni issuers increased transparency and resources to determine market demand prior to a bond sale.

Details surrounding the tariffs — which could be anything from reciprocal tariffs to finally implementing delayed tariffs on Canada and Mexico and on pharmaceuticals — have remained unclear, but uncertainty has plagued the market for weeks.

Triple-A yields have fallen as much as 12 basis points over the past three trading sessions.