U.S. stocks finished modestly higher Wednesday as falling Treasury yields eased pressure on risk assets and a surge in Moderna shares pushed the healthcare sector to a record, while investors largely shrugged off Federal Reserve minutes showing increased concern about inflation.
By yourNEWS Media Newsroom
U.S. stocks closed with modest gains Wednesday as a pullback in Treasury yields gave investors some relief from the recent bond-market selloff, while a sharp rally in Moderna and other healthcare shares provided the strongest support for the broader market.
The S&P 500 rose 18.15 points, or 0.24%, to finish at 7,709.91, according to preliminary data.
The Nasdaq Composite added 40.08 points, or 0.15%, to 26,331.09, while the Dow Jones Industrial Average gained 123.94 points, or 0.23%, to close at 53,467.34.
The advance followed a difficult session for risk assets Tuesday, when concerns about growing government debt and persistent inflation helped push global bond yields to multidecade highs.
The yield on the 30-year U.S. Treasury bond had climbed to its highest level since 2007 before retreating Wednesday. The benchmark 10-year Treasury yield also moved lower.
The decline in yields came after the Treasury Department announced plans to double the size of liquidity-support buyback operations involving longer-dated government bonds.
“The risk-on trade is trying to hang on to the lifeline that Treasury Secretary Bessent sent,” said Carol Schleif, chief market strategist at BMO Private Wealth.
Schleif noted that higher-risk assets, including prominent technology stocks, had come under pressure in recent sessions as yields climbed.
Investors have become increasingly sensitive to borrowing costs because major technology companies are spending heavily on artificial intelligence infrastructure, including data centers, while financing those investments through combinations of debt issuance, equity and existing cash.
Schleif said persistently elevated rates “could potentially impact the AI trade.”
Stocks initially responded positively to the Treasury announcement, but the major indexes surrendered some of their gains as Wednesday’s session progressed.
Jim Baird, chief investment officer at Plante Moran Financial Advisors, said some investors likely took profits after the early advance.
He also cautioned that the Treasury action “doesn’t mean that the longer-term issue of higher rates is off the table.”
Federal Reserve policy was another focus Wednesday, although the release of minutes from the central bank’s July meeting produced little immediate market reaction.
The minutes showed growing concern among policymakers about inflation.
“Several” Fed officials were prepared to raise interest rates, according to the minutes, while “many” said an increase would be necessary if inflation failed to decline toward the central bank’s 2% target.
Despite those signals, stocks remained in positive territory as falling Treasury yields and strength in healthcare shares offset weakness elsewhere.
Moderna was one of the session’s standout performers after the biotechnology company announced results involving its personalized mRNA cancer treatment developed with Merck.
The companies said the therapy reduced the risk of melanoma recurrence and spread in a late-stage clinical trial.
Moderna shares surged following the announcement.
Merck also rallied and became the largest gainer in the Dow.
The move in Moderna spread across biotechnology and vaccine-related stocks, with Novavax and U.S.-listed shares of BioNTech also advancing.
The S&P 500 healthcare sector rose sharply, reached a record high and contributed more to the benchmark index’s gain than any of its other 10 major industry groups.
The Nasdaq biotechnology index also posted a strong advance.
Technology stocks were less supportive.
The S&P 500 information technology sector declined during the session, with semiconductor companies accounting for much of the weakness.
Marvell Technology was a notable exception.
Its shares climbed after the company said it would help develop Google’s custom chips, which are experiencing strong demand.
Marvell also said it had offered Google the right to acquire a potential stake valued at as much as $12.2 billion.
The stock was among the relatively few gainers in the volatile Philadelphia semiconductor index, which nevertheless finished the day lower.
Shares of Google parent Alphabet were little changed.
Several consumer-related companies also moved after providing updates on their outlooks.
Target shares rose after the retailer increased its annual sales forecast.
Lowe’s gained despite cutting its forecast for annual sales growth.
Estée Lauder shares jumped after the cosmetics company projected annual profit above Wall Street expectations.
Energy markets remained focused on the continuing uncertainty in the Middle East.
Brent crude futures settled higher as the outlook for progress in the region remained unclear.
President Donald Trump said no negotiations were taking place with Iran and maintained that the Strait of Hormuz was open.
Iran, however, continued to assert that the strategically important waterway remained closed to shipping.
Wednesday’s trading left investors balancing several competing forces: easing Treasury yields provided near-term relief, healthcare stocks delivered a significant boost and selected corporate earnings and forecasts supported individual shares, while inflation concerns, elevated government borrowing costs and uncertainty surrounding the Middle East continued to weigh on the broader outlook.
The Federal Reserve minutes also reinforced the possibility that interest rates could remain a source of volatility if inflation does not continue moving toward the central bank’s 2% goal.
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