Treasury buybacks drag yields lower; gold, miners rally
The Treasury’s decision to at least double long-dated debt buybacks pushed benchmark yields lower, weakened the dollar to its lowest since late May and lifted gold-related assets.
U.S. equities clawed back Tuesday’s tech-led slump by midday Wednesday as the Treasury’s decision to double its long-dated debt buybacks pulled benchmark yields off 20-month highs and knocked the dollar to its weakest level since late May.
The reflation impulse ripped through hard assets.
Gold — tracked by th SPDR Gold Shares (NYSE: GLD ) — jumped toward $4,500 an ounce.
Silver rallied 4.3% to $66.06 and Platinum gained 4.4% to $1,809.50, both at two-month highs.
Bond Market Intervention Is Session’s Organizing Event The Treasury said it would at least double the size of its liquidity-support buyback operations covering securities maturing in 10 to 30 years, lifting the maximum to $4 billion through Nov.
4, after 30-year yields recently touched their highest since 2007.
The yield on the 10-year Treasury note fell 5 basis points to 4.66% after testing a 20-month high of 4.75% on Tuesday.
The 30-year yield dropped 8 basis points to 5.20% and the 20-year fell 9 basis points to 5.19% ahead of a $16 billion 20-year auction.
The 2-year was little changed at 4.19%, steepening the curve’s front end against a flattening long end.
The dollar index slid to 99, the lowest since late May.
The euro rose 0.8% to $1.1664 and the yen strengthened 0.8% against the greenback.
That was enough to spark a rotation rather than a straight rally: money moved out of the crowded AI hardware trade and into rate-sensitive, dollar-sensitive and defensive assets.
The S&P 500 added 0.6% to 7,735, while the Dow Jones Industrial Average rose 0.4% to 53,563.
The Nasdaq 100 was unchanged, while the small-cap Russell 2000 outperformed, up 0.8% to 3,043 as lower long-end yields lifted domestic cyclicals.
Crude extended a three-day advance despite a bearish inventory print.
West Texas Intermediate rose 2.1% to $86.68 a barrel and Brent climbed 1.5% to $92.42, near three-week highs.
Attention now turns to the 2 p.m.
ET release of the July FOMC minutes, which should quantify how divided the committee was when it held the fed funds rate at 3.75% last month with three dissents.
Wednesday’s Performance In Major US Indices Index Last % Change MTD YTD S&P 500 7,735.19 +0.6% +3.3% +13.8% Dow Jones 53,563 +0.4% +2.1% +12.1% Nasdaq 100 29,480 0.0% +4.5% +17.1% Russell 2000 3,043.33 +0.8% +3.9% +23.4% Updated by 12:25 p.m.
ET According to the Pro platform: The Vanguard S&P 500 ETF (NYSE: VOO ) gained 0.6%.
The SPDR Dow Jones Industrial Average ETF Trust (NYSE: DIA ) rose 0.4%.
The Invesco QQQ Trust (NASDAQ: QQQ ) edged up 0.2%.
The iShares Russell 2000 ETF (NYSE: IWM ) rallied 0.8%.
Moderna Jumps on mRNA Breakthrough The Health Care Select Sector SPDR Fund (NYSE: XLV ) led all 11 S&P 500 sectors with a 2.8% advance, its strength concentrated in a single stunning headline.
Moderna Inc. (NASDAQ: MRNA ) more than doubled, soaring 132.7% to $146.52, the stock’s best day ever, after the biotech company and Merck & Co.
Inc. (NYSE: MRK ) said their personalized mRNA cancer vaccine intismeran autogene, combined with Keytruda, met both its primary endpoint of reducing melanoma recurrence and its secondary endpoint on distant metastasis in a Phase 3 trial of more than 1,100 post-surgical patients.
It is the first positive late-stage readout for an mRNA cancer vaccine, and the partners said regulatory discussions would begin within months.
Merck rose 10.7% to $149.69, the stock’s best day since March 2009.
The Consumer Discretionary Select Sector SPDR Fund (NYSE: XLY ) and the Materials Select Sector SPDR Fund (NYSE: XLB ) each rose 1.9%, and the Communication Services Select Sector SPDR Fund (NYSE: XLC ) added 1.3%.
Laggards Tell a Rotation Story The Industrials Select Sector SPDR Fund (NYSE: XLI ) fell 0.5%, the Utilities Select Sector SPDR Fund (NYSE: XLU ) lost 0.4% and the Technology Select Sector SPDR Fund (NYSE: XLK ) shed 0.4%.
At the industry level, the VanEck Gold Miners ETF (NYSE: GDX ) exploded 9.4% higher, extending its month-to-date gain to 31.3%.
The iShares Biotechnology ETF (NASDAQ: IBB ) surged 4.7% and the iShares U.S.
Home Construction ETF (BATS: ITB ) rose 3.6% on the yield retreat.
Two names bucked the semiconductor tape.
Marvell Technology Inc. (NASDAQ: MRVL ) rallied 9.7% to $236.89, and Analog Devices Inc. (NASDAQ: ADI ) outperformed the group after reporting adjusted earnings of $3.45 per share against a $3.31 estimate and issuing strong guidance.
Wednesday’s Stock Movers Tempus AI Inc. (NASDAQ: TEM ) jumped 21% to $59.73 after agreeing to acquire Personalis Inc. (NASDAQ: PSNL ) for roughly $1.5 billion, largely in stock, at $16.25 per share, pushing Tempus into the roughly $20 billion minimal residual disease cancer-testing market.