The S&P 500 snapped a three-day losing streak on Wednesday as falling Treasury yields provided relief to investors following the Treasury Department’s move to increase buybacks of longer-term government debt.
The broad market index rose 0.21% to close at 7,707.98, while the Nasdaq Composite gained 0.16% to finish at 26,331.09. The Dow Jones Industrial Average added 119.65 points, or 0.22%, closing at 53,463.05.
The market’s gains were stronger earlier in the session but faded toward the close. At its intraday peak, the Dow was up more than 360 points, while the S&P 500 and Nasdaq had climbed roughly 0.7% and 0.6%, respectively.
The initial rally was driven by a decline in long-term Treasury yields after the Treasury Department announced plans to at least double its repurchases of government debt, focusing on maturities between 10 and 30 years, including 20-year bonds.
The 30-year Treasury yield, which had reached a fresh 19-year high above 5.33% in the previous session, fell by more than 10 basis points to 5.184%. Meanwhile, the 10-year Treasury yield declined by over 6 basis points to 4.637%.
Stocks that could benefit from lower borrowing costs moved higher, with Lowe’s and Home Depot both gaining around 2%.
Moderna was among the biggest gainers, surging approximately 177% for its strongest session on record after its experimental skin cancer vaccine, developed with Merck, showed positive results in a late-stage trial. Merck shares also climbed more than 12%, helping support the Dow.
Marvell Technology jumped nearly 10% after announcing an agreement with Google involving its tensor processing units. The company also issued Alphabet a warrant to purchase up to $12.2 billion in Marvell common stock.
However, the broader technology sector faced some pressure after reports that OpenAI’s second-quarter results disappointed investors, with revenue growth slowing while losses continued to increase. Broadcom fell more than 4%, while AMD declined nearly 4%. The iShares AI Innovation and Tech Active ETF also dropped around 2%.
The rebound followed Tuesday’s sell-off, when major U.S. indexes came under pressure as sovereign bond yields around the world climbed to multi-year highs amid persistent inflation concerns. Japan’s 10-year government bond yield reached its highest level in three decades, while long-term yields in France and Germany also climbed sharply.
Inflation remains a key concern for investors. The latest Federal Reserve meeting minutes showed that policymakers could support further rate hikes if inflation fails to cool sufficiently. At the Fed’s July meeting, three officials dissented in favor of raising interest rates.
