Major indices opened sharply higher on Wednesday as U.S. Treasury yields retreated following the department's announcement of an expanded bond repurchase operation. The Dow Jones Industrial Average gained 0.42%, the S&P 500 rose 0.42%, and the Nasdaq Composite climbed 0.40%. Moderna, Inc. (MRNA) surged 83.75%, while Estée Lauder advanced 11.97%, Marvell Technology jumped 10.69%, and Merck climbed 9.11%. Newmont Mining added 7.55% and Jack Henry gained 5.15%.
Among the "Magnificent Seven," Alphabet (GOOG) slipped 0.29%, Microsoft fell 0.30%, and Meta Platforms dropped 0.49%. Meanwhile, Nvidia rose 1.15%, Amazon gained 0.99%, Tesla advanced 0.81%, and Apple edged up 0.26%.
Where to begin
The Treasury Department announced Wednesday that it would more than double the size of its bond buyback program, a move that pushed yields significantly lower. Since late June, the long-end segment had seen buyers step aside, leaving the market without takers. The government said it would raise the repurchase operation cap from $2 billion to at least $4 billion. Just a day earlier, the 30-year Treasury yield had spiked above 5.33%; it has since dropped nearly 9 basis points to 5.196%. The 10-year yield also fell 6 basis points to 4.647%.
Moderna emerged as the biggest winner of the session. The company, in partnership with Merck, released positive late-stage clinical data for an experimental cancer vaccine, sending its shares soaring over 80%. Merck's stock also rallied more than 7%, providing a lift to the Dow. Marvell Technology jumped over 12% after announcing a collaboration with Alphabet related to tensor processing units. As part of the deal, Alphabet received a warrant to purchase up to nearly 59 million shares of Marvell common stock.
Tuesday's session had seen U.S. stocks close lower, with the S&P 500 posting its third consecutive decline as sovereign bond yields across the globe hit multi-year highs. Beyond the 30-year U.S. Treasury reaching a 19-year peak, Japan's 10-year yield touched a 30-year high, France's 30-year yield hit levels not seen since 2008, and Germany's 30-year yield rose to its highest since 2011.
Despite these pressures, Adam Parker, founder and CEO of Trivariate Research, noted, "The economic fundamentals remain robust. Large-cap companies have sufficient earnings and cash flow strength to weather this bout of market panic."
The Federal Reserve's latest FOMC meeting minutes are set for release Wednesday afternoon. With notable divisions within the central bank, investors will be closely scrutinizing the document. At the July policy meeting, three committee members cast dissenting votes in favor of rate hikes, and the market hopes to glean more detail on the nature of this disagreement.
Legendary investor bets on U.S. recession next year
Billionaire investor Leon Cooperman, CEO of Omega Advisors and former Goldman Sachs chief, renewed his warnings about the U.S. economy and stock market this week. He projects the economy could slip into recession within the next year, potentially dragging equities down with it. Cooperman draws parallels between the current market and historical boom-bust cycles, including the collapse of the "Nifty Fifty" stocks in the early 1970s. He also suggests that optimism around AI investments may begin to cool. "I think we'll have a recession sometime next year, which could cause the market to decline," he said. Cooperman further argues that investors are overlooking the risk of resurgent inflation, which could weigh on equity valuations.
Cooperman's stance clearly diverges from the Wall Street consensus. Most market forecasters remain bullish on AI demand and the returns on related investments. The Nasdaq 100 is up 19% year-to-date, on track for its second consecutive year of double-digit gains.
BTIG flags growing divergence between price action and market breadth
The U.S. stock market is experiencing an unprecedented structural split. Price movement and market breadth continue to diverge, with capital rotating unpredictably across factors. Once this game of musical chairs comes to an end, investors could face a broad, synchronized selloff not seen in years—a shift toward higher correlations across the board.
Market breadth is a key gauge of market health. BTIG technical strategist Jonathan Krinsky noted in a Wednesday report that 2026 has already seen 57 sessions where price action and breadth moved in opposite directions, tying the record for the most in nearly three decades—and with only mid-August on the calendar, that mark is all but certain to be broken this year. Krinsky warns, "We are closer to that day than many expect," when, with no chairs left empty, investors will be forced into cash, triggering a full-scale synchronized selloff that has been absent for the past ten months.
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