Closing Bell: Treasury Buybacks Send Yields, Rates, and Dollar Lower, Stocks Higher

Major indexes reversed three days of declines with small gains, and U.S. Treasury yields fell, after the Treasury Department said it would double the size of certain long-dated government debt repurchases. 

The S&P 500 (SPX) rose 0.21% and the Dow Jones Industrial Average ($DJI) was up 0.22%. The small-cap Russell 2000 (RUT) rose 0.50%. The Nasdaq-100 (NDX) fell 0.22%. The Philadelphia Semiconductor Index (SOX) slumped 2%, bringing its week-to-date decline to more than 5%. 

Tech came under pressure after The Wall Street Journal reported that OpenAI second-quarter sales growth was tepid compared with competitor Anthropic. This hurt Oracle (ORCL), which has a large supplier agreement with OpenAI, which is not publicly traded. 

The Treasury Department liquidity support, focused on long-dated credit, applies to 10- to 20-year and 20- to 30-year debt, effective September 9 through November 4, according to Reuters. The U.S. dollar index declined 0.85% to 98.809. Crude prices were up 0.27% to near $84 per barrel.  

In two LinkedIn posts, Mohamed El-Erian, the economics and bond expert who was CEO/co-CIO of PIMCO, said the debt buyback move is less about its size and more about “broader deployment of ‘yield curve control’ (YCC)” that can bring down long-dated yields immediately and in the short term, “thus helping mortgage and other borrowing costs.” But he warned of “unintended consequences” adding, "the effects of this financial engineering are short dated unless followed by fundamental policy adjustments.” See Treasury Buybacks, Fed Expectations and WMT Earnings in Focus 

A few things to watch from Wednesday’s market: 

• Total U.S. national debt surpassed $40 trillion this week, with $1 trillion in new debt on government balance sheets in just a few months, according to reports sourcing the U.S. Treasury. 
• The star stock Wednesday was Moderna (MRNA), the vaccine producer, whose shares spiked a whopping 177% to $174.38. You read that right. The company and Merck (MRK) announced that an experimental personalized cancer vaccine showed positive initial results in its first-ever late-stage trial, according to reports. The mRNA cancer vaccine slowed the return of melanoma and its spread to other parts of the body. Merck shares jumped 12.6% Wednesday. See U.S. Treasury Boosts Debt Buybacks, UAE Cuts Off Iran, MRNA & MRK Melanoma Trial Results 
• Target (TGT) reported strong second-quarter earnings, which beat Wall Street analysts’ expectations, and it raised its full-year guidance. Target shares rose 4.2% Wednesday. See TGT Nears 2-Year High After Earnings as Investors Assess Retail Revival 
• Marvell Technology (MRVL) shares surged nearly 10% after a regulatory filing revealed it issued Alphabet (GOOGL) a warrant to purchase up to 58.97 million shares at an exercise price of $206.58 per share, a stake valued at roughly $12.2 billion. Broadcom (AVGO) shares fell. 
• SK Hynix (SKHY) announced it would buy back and cancel shares valued at roughly $29 billion between August 20 and November 19, 2026. This marks the largest share cancellation in South Korean corporate history, designed to boost shareholder returns and support its stock price following recent market dips. The company’s US shares rose 0.35% Wednesday. 

For economic and earnings calendars for the remainder of the week, see Week Ahead: Retail Earnings, FOMC Minutes, Housing Data in Focus 

Angrej Singh contributed to this report

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