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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 the SPDR Gold Shares (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.
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.
According to market data:
The Health Care Select Sector SPDR Fund (XLV) led all 11 S&P 500 sectors with a 2.8% advance, its strength concentrated in a single stunning headline.
Moderna Inc. (MRNA) more than doubled, soaring 132.7% to $146.52, the stock's best day ever, after the biotech company and Merck & Co. Inc. (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 (XLY) and the Materials Select Sector SPDR Fund (XLB) each rose 1.9%, and the Communication Services Select Sector SPDR Fund (XLC) added 1.3%.
The Industrials Select Sector SPDR Fund (XLI) fell 0.5%, the Utilities Select Sector SPDR Fund (XLU) lost 0.4% and the Technology Select Sector SPDR Fund (XLK) shed 0.4%.
At the industry level, the VanEck Gold Miners ETF (GDX) exploded 9.4% higher, extending its month-to-date gain to 31.3%.
The iShares Biotechnology ETF (IBB) surged 4.7% and the iShares U.S. Home Construction ETF (ITB) rose 3.6% on the yield retreat.
Two names bucked the semiconductor tape. Marvell Technology Inc. (MRVL) rallied 9.7% to $236.89, and Analog Devices Inc. (ADI) outperformed the group after reporting adjusted earnings of $3.45 per share against a $3.31 estimate and issuing strong guidance.
Tempus AI Inc. (TEM) jumped 21% to $59.73 after agreeing to acquire Personalis Inc. (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.
The gold complex supplied the next tier of gainers. Coeur Mining Inc. (CDE) climbed 14.2% and was matched almost tick-for-tick by peers Hecla Mining Company (HL), up 14.0%, Newmont Corp. (NEM), up 8.5%, and Royal Gold Inc. (RGLD), up 7.9%.
The dollar's slide did the same work for crypto proxies. Strategy Inc. (MSTR) rose 14.2% to $105.64 alongside a Bitcoin (CRYPTO: BTC) rally toward $66,000.
The Estee Lauder Companies Inc. (EL) rose 16.8% to $98.42 after fiscal fourth-quarter revenue of $3.6 billion, up 6% and ahead of the $3.54 billion consensus, and adjusted earnings of 39 cents per share, double the year-ago figure.
The decliners were almost entirely an AI hardware story. Vicor Corp. (VICR) was the worst Russell 1000 performer, down 9.4% to $219.59 as investors took profits on a 21% single-session rally in the prior session.
Keysight Technologies Inc. (KEYS) extended its post-earnings slide.
TTM Technologies Inc. (TTMI) fell 6.4% to $117.61 and MACOM Technology Solutions Holdings Inc. (MTSI) lost 6.1% to $274.89, both sliding on a continued de-risking across the AI supply chain.
Retail results were the session's other soft spot. The TJX Companies Inc. (TJX) reported second-quarter earnings of $1.22 per share against a $1.19 estimate, while Target Corp. (TGT) posted $4.11 per share. TJX, Target and Lowe's Companies Inc. (LOW) traded between 4% and 1% lower after the prints.
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