New York stocks opened higher as U.S. Treasury yields tumbled after the Treasury Department expanded the size of its medium- to long-term Government Bonds buybacks. Yields on medium- to long-term Government Bonds, which had been climbing on concerns about the widening fiscal deficit and inflation, reacted to the Treasury's market-stabilizing move, improving investor sentiment somewhat.
As of 9:37 a.m. on the 19th (local time), the Dow Jones Industrial Average was up 76.80 points, or 0.14%, at 53,420.20 on the New York Stock Exchange (NYSE). The S&P 500 was up 21.35 points, or 0.28%, at 7,713.11, and the Nasdaq was up 19.90 points, or 0.08%, at 26,309.61.
The Treasury Department said it would expand the buyback size for long-term Government Bonds with remaining maturities of 10–20 years and 20–30 years from up to $2 billion per operation to at least $4 billion. The measure will be implemented temporarily through Nov. 4, when this quarter's Government Bonds issuance plan takes effect.
The bond market reacted immediately to the news of the Treasury's larger buybacks. At the same time, the U.S. 10-year Government Bonds yield fell 5.20 bp (1 bp = 0.01 percentage point) from the prior session to 4.653%, and the 30-year yield fell 8.50 bp to 5.200%.
Recently, U.S. Government Bonds yields have risen, led by medium- to long-dated maturities, as concerns about a widening fiscal deficit and inflation overlapped. In particular, long-term yields climbed faster than short-term ones, producing a "bear steepening" of the yield curve. The Treasury's buyback expansion acted as a factor that partly reversed this upward trend in yields.
With Government Bonds yields falling, the stock market also started higher. The pressure from rising Government Bonds yields in major countries, which had weighed on stocks recently, has eased.
However, the gains are limited. The main indexes gave back part of their early rise after the open, leaving the market's direction unclear. Solid corporate earnings and expectations for increased investment in artificial intelligence (AI) are supporting prices, while higher rates and concerns about lofty stock valuations are pushing back.
By sector, health care and health-related stocks are up more than 3%, and materials are rising in the 2% range. Consumer discretionary and consumer staples are also up more than 1%. In contrast, technology and industrials were little changed to slightly lower.
Moderna soared more than 100%. The move followed news that an experimental skin cancer vaccine co-developed by Moderna and Merck produced positive results in late-stage clinical trials. Merck shares also rose more than 10%.
Marvell Technology rose more than 7% on news of a deal with Google related to tensor processing units (TPUs). In contrast, concerns about elevated levels in AI and semiconductor stocks persisted, with the Philadelphia Semiconductor Index falling more than 2%. Broadcom fell in the 4% range, and AMD and Intel fell in the 3% range, as major chip stocks weakened.