Dow rises as Treasury unveils plan to relieve bond market pressure: Live updates
Traders work on the floor of the New York Stock Exchange.
NYSE
The Dow Jones Industrial Average rose on Wednesday as Treasury yields fell after the Treasury Department announced an increased buyback operation for longer-term debt.
The 30-stock Dow added 263 points, or 0.5%. The S&P 500 traded up 0.3%, while the Nasdaq Composite fell 0.2%.
Yields on the long end of the Treasury curve sank after the Treasury Department said Wednesday that it’s going to at least double the size of its government debt repurchases. The increased buyback is aimed at the 10- to 30-year parts of the market. That’ll include the 20-year.
The 30-year Treasury bond yield — which notched a new 19-year high of above 5.33% in the prior trading day — declined almost 9 basis points to 5.196%. The 10-year Treasury note yield shed 6 basis points to 4.647%.
“The Treasury’s move to double long‑end buybacks from $2 billion to $4 billion was purely a liquidity‑management adjustment for outstanding 30‑year bonds. Yet, markets treated it as a broader easing signal, with yields falling 10 basis points and semis/tech rallying sharply,” said Ben Emons, founder of FedWatch Advisors.
“This highlights how tightly rate dynamics are now correlated with the AI‑and‑tech complex rather than traditional QE interpretations,” he continued.
Moderna almost doubled, soaring more than 90% and heading for its best day on record after an experimental skin cancer vaccine developed with Merck showed success in a late-stage trial. Merck shares jumped more than 7%, supporting the Dow.
Shares of Marvell Technology gained more than 12% after announcing an agreement with Google related to its tensor processing units and issuing Alphabet a warrant to buy as much as almost 59 million shares of Marvell common stock.
The major U.S. stock averages fell on Tuesday, with the S&P 500 posting its third consecutive loss, as sovereign bond yields around the globe hit multi-year highs. Along with the 30-year Treasury yield’s fresh 19-year high, Japan’s 10-year bond yield reached its highest level in three decades. Rates on France’s 30-year bond reached the highest going back to 2008. The German 30-year bund yield hit its highest point since 2011.
The latest Federal Open Market Committee meeting minutes are set to release Wednesday afternoon. Investors will likely take a keen eye to the minutes, given the sharp divisions within the central bank. At the July meeting, there were three dissenters voting to hike rates, a division that investors will seek greater detail on.