Treasury Long-Term Bond Buyback Boosts NYSE, Will Relief Rally Continue?

On the 19th (local time), New York markets halted their losing streak and edged higher. The S&P 500 rose 0.2% to close at 7,707.98, the Dow climbed 0.2% to 53,463.05, and the Nasdaq also gained 0.2%. The Russell 2000, an index of small- and mid-cap stocks, was relatively stronger, rising 0.5%. The move came after the U.S. Treasury Department announced it would at least double the size of its planned long-term Treasury buybacks scheduled from September 9 to November 4, easing pressure on rapidly rising yields. Immediately following the announcement, the 10-year yield fell from 4.71% to 4.64%, and the 30-year yield from 5.28% to 5.18%.

The minutes of the July 28–29 Federal Open Market Committee (FOMC) meeting, released the same day, confirmed Fed officials’ caution that further rate hikes will be inevitable if inflation does not come down sufficiently. Although the current policy rate—around 3.6%—remains on hold, a majority of participants emphasized upside risks. July’s core Consumer Price Index (CPI) fell to 2.5% year-over-year, but the Fed’s preferred gauge, core Personal Consumption Expenditures (PCE), is expected to be around 3.3%, well above the 2% target. Factors such as the conflict in Iran, tariffs, and expanded AI infrastructure investment are seen as stoking price pressures. The market is pricing in both a rate hold in September and a chance of additional hikes by year-end, leaving the S&P 500 roughly 1% lower for the week.

By stock, Moderna surged 177% after announcing positive early results from its jointly developed mRNA melanoma vaccine with Merck, which itself rose 12.6%. Estée Lauder jumped 16.3% as global sales—including in China—came in stronger than expected, while consumer and housing–related names such as Target, Lowe’s, and Toll Brothers also rallied on earnings surprises. In contrast, Broadcom, which had soared earlier this year as an AI beneficiary, fell 4.6%, highlighting renewed valuation pressures on growth stocks. In Asia on the same day, the Nikkei 225 fell 3.2% and the Kospi dropped 5.8%, as AI and semiconductor sell-offs combined with Iran-driven oil concerns. The Treasury’s action is a short-term fix to ease bond-market shock, and the Fed’s inflation warning has only been reinforced, so Korean investors should continue monitoring the tension between long-term yields and AI investment.