Market Overview
Wall Street's main indexes rebounded on Wednesday, recovering from a technology-led selloff in the previous session, as a retreat in government bond yields helped lift investor sentiment. The S&P 500 rose 0.4%, the Dow Jones Industrial Average was up 0.5%, and the Nasdaq Composite was virtually unchanged as of 10:30 a.m. Eastern Time, according to data from Livemint. At the open, the Dow rose 120.1 points to 53,463.47, the S&P 500 gained 25.0 points to 7,716.74, and the Nasdaq added 104.2 points to 26,393.889, as reported by the same outlet.
The bounce followed a heavy selloff on Tuesday, triggered by Treasury yields climbing to multi-decade highs amid concerns over rising U.S. government debt and geopolitical uncertainty. The yield on the 30-year Treasury had reached its highest level since 2007, but on Wednesday it fell to 5.209%.
Treasury's Buyback Announcement
The easing in yields came after the U.S. Treasury Department said it would double the size of its liquidity-support buyback operations for longer-dated government bonds. This move, described as at least doubling the intended purchases of longer-term Treasurys from Sept. 9 through Nov. 4, was aimed "to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants," according to reports in The Atlanta Journal-Constitution and The Times of India.
As a result, the 10-year Treasury yield fell to 4.66% from 4.71% late Tuesday, though it remains well above the 3.97% level recorded before the war with Iran, which had pushed oil prices and inflation concerns higher. The 30-year yield declined more sharply, falling to 5.2% from 5.28% late Tuesday, as noted by multiple outlets.
The Treasury's move was seen as a direct attempt to ease pressure in the bond market, which had been weighing on equities. Rising yields increase borrowing costs across the economy and can undercut stock valuations, particularly for technology companies that are priced on future earnings expectations.
"Most tech companies are priced mainly on forward earnings expectations and when interest rates creep up, those expectations are worth less, and the stocks are worth less," Robert Pavlik, senior portfolio manager at Dakota Wealth, told The Economic Times.
Earnings and Stock Movers
Strong corporate earnings also supported the market. Moderna and Merck reported encouraging initial results from a study of their mRNA cancer therapy, which, when combined with Keytruda, showed better recurrence-free survival in melanoma patients than Keytruda alone. Moderna shares soared 138.4%, according to The Atlanta Journal-Constitution, while other reports cited a jump of more than 150% (Livemint) or an 89.5% surge (The Times of India). Merck shares rose 9.6% (as reported by The Economic Times and Livemint), while The Atlanta Journal-Constitution noted a 12.4% gain. The rally extended to other biotech stocks, with Novavax rising 6.8% and BioNTech's U.S.-listed shares surging 17.5%, as reported by multiple sources.
In the retail sector, Target rose 5.9% after reporting better-than-expected profits, with The Economic Times noting a 3.3% gain after the company raised its annual sales forecast. Lowe's advanced 1% despite lowering its outlook, and Toll Brothers climbed 5.3% (or 7.1% per The Times of India) after reporting better-than-expected quarterly profits. Estee Lauder jumped 15.7% after CEO Stéphane de La Faverie said a key indicator of revenue growth accelerated for a fourth consecutive quarter, with mainland China delivering the strongest growth. The company reported earnings per share of 39 cents, excluding one-time items, up from 9 cents a year earlier and above the 32 cents expected by analysts.
On the downside, Broadcom shares fell more than 4% after recent strength in the semiconductor sector, acting as a drag on the S&P 500. Marvell Technology climbed about 9% after granting Alphabet's Google a warrant to purchase a stake valued at approximately $12.18 billion. The Philadelphia SE Semiconductor index slipped 0.7%, and technology stocks in the S&P 500 edged down 0.4%, capping gains in the broader market.
At 10:30 a.m. Eastern Time, the S&P 500 was up 0.4% at 7,720.24, the Dow had added 119.94 points to 53,463.34, and the Nasdaq had risen 67.17 points to 26,356.89, according to data from The Economic Times. Advancing stocks outnumbered decliners by nearly four-to-one on the NYSE and more than two-to-one on the Nasdaq.
Global Markets and Commodities
International markets were mixed, with Tokyo's Nikkei 225 sinking 3.2% and South Korea's Kospi slumping 5.8%, as reported by The Atlanta Journal-Constitution and The Times of India, citing heavy exposure to AI-related stocks in those markets.
In commodities, spot gold climbed 3.5% to $4,486.88 per ounce, while silver rallied 3.69% to $65.64, platinum rose nearly 4% to $1,779.89, and palladium advanced 2.8% to $1,326.13, according to Livemint. Brent crude futures rose 0.5% to $91.45 per barrel, with West Texas Intermediate adding 0.5%.
President Donald Trump said there were no negotiations underway with Iran and maintained that the Strait of Hormuz remained open to shipping, contradicting Iran's claims, as reported by The Economic Times and Livemint. His comments came amid ongoing geopolitical tensions that have contributed to bond market volatility.
Looking Ahead
Investors were also awaiting the release of the Federal Reserve's minutes from its July meeting for clarity on the interest-rate outlook. Markets are pricing in at least one 25-basis-point rate increase by the end of 2026, though expectations for a hike as early as September have dropped following mild inflation figures, according to The Economic Times. Walmart was set to release its quarterly results on Thursday, adding to the week's earnings calendar.