US Stocks Rebound on Higher Treasury Buyback

US stock indices were higher on Tuesday after the Treasury signaled it will buy back more notes and bonds. The S&P 500, Dow, and Nasdaq 100 were slightly above the flatline. The Treasury stated it would double the limit on buybacks of long-term securities, adding to a series of other measures it took to control the recent surge in longer benchmark borrowing costs. Besides reducing rates, the outlook of higher dollar liquidity from the Treasury's intervention also supported equities. US yields were also in focus ahead of the release of FOMC minutes. Gains were broad on most sectors, with software application and hyperscalers mostly trading higher. Apple, Salesforce, and Tesla gained 1%. Meanwhile, retail stocks gained after TJX, Target, and Lowe's all reported second-quarter earnings. On top of that, Moderna stock prices doubled and Merck surged 10% after a trial on their joint vaccine cut recurrence in melanoma.

The Dow Jones Index is gaining 130 points or 0.24 percent on Wednesday. Leading the gains are Merck (10.20%), Sherwin-Williams (2.79%) and Home Depot (1.95%). Top losers are Caterpillar (-2.18%), Goldman Sachs (-1.97%) and JPMorgan (-1.20%).

Futures tracking US equities were mixed on Wednesday, holding losses from the previous session on more pressure from elevated bond yields. Contract for the S&P 500 and Dow were flat, while those for the tech-heavy Nasdaq 100 lost 0.5%. Tech giants were mostly lower premarket as worries of soaring aggregate credit supply lifted borrowing costs in the longer end of curves. Oracle, AMD, Micron, and Marvell were down. Borrowing costs were also lifted by high energy prices as hawkish rhetoric by both the US and Iran prolonged expectations on the suspension of oil from the Persian Gulf. The outlook on interest rates will be further tested after the release of FOMC minutes today. Meanwhile, TJX, Lowe's, and Target fell between 4% and 1% after the retail giants reported their second-quarter results. Conversely, Analog Materials outperformed other semiconductors on its strong guidance. Moderna stock doubled and Merck surged 10% after a trial on their joint vaccine cut recurrence in melanoma.