All three major New York indexes closed lower across the board as Government Bonds yields rose and Walmart's weak results weighed on sentiment.
On the 20th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average finished at 52,759.21, down 703.84 points (1.32%) from the previous session. The Standard & Poor's (S&P) 500 fell 66.82 points (0.87%) to 641.16, and the tech-heavy Nasdaq composite closed at 26,067.17, down 263.93 points (1%).
The effect of the U.S. Treasury's expanded Government Bonds buyback (early repurchase) measure lasted only a day. Scott Bessent, the U.S. Treasury secretary, said in an interview that the buyback size could exceed the announced $4 billion, but it failed to calm market jitters, sending Government Bonds yields higher. The 10-year U.S. Treasury yield rose more than 5 bp (1 bp = 0.01 percentage point) to 4.706% on the day. The 30-year yield climbed more than 5 bp to 5.251%. The 30-year yield earlier this week refreshed a record high for the first time in about 20 years.
In particular, questions were raised about the effectiveness of government intervention. Adam Phillips, investment director at EP Wealth Advisors, said, "This measure is not a fundamental prescription to solve the bond market's problems," and noted, "Structural factors beyond the control of the Treasury or the administration are at work, so stronger steps are needed to stabilize the market."
Amid this, shares of Walmart, the bellwether in consumer staples, plunged 9%. U.S. same-store sales and the outlook for adjusted earnings for the third quarter and the full year fell short of market expectations. It was the biggest drop in about four years. Shares of rival retailers Costco, Dollar Tree, and Albertsons also fell in tandem.
Meanwhile, memory chip stocks such as SK hynix and Micron Technology outperformed and rebounded. The Philadelphia Semiconductor Index (SOX) rose 61.79 points (0.53%) to 11,800.02 from the previous session. SK hynix ADR jumped 4.4%, and Micron Technology surged 4%. The rally was driven by the previous day's roughly 13% spike in Korea's stock market after SK hynix(000660) released a large share buyback. Marvell Technology, which announced a major artificial intelligence (AI) chip alliance with Google the previous day, gained 5.8% on the day. AMD rose 0.65% to $469.45, and Broadcom added 0.43% to $364.03 at the close.
With disruptions to crude supply in the Middle East persisting and U.S. economic pressure on Iran continuing, global oil prices climbed for a fifth straight session. West Texas Intermediate (WTI) September delivery futures rose 2.7% to $86.64 a barrel. Brent, the global benchmark, for October delivery advanced 2.36% to $93.78.