U.S. stock indices closed moderately higher on August 19 (S&P500: +0.21%), while long-term Treasury yields declined after the government said it intends to repurchase an additional amount of longer-maturity bonds, easing pressure on the market.
Investors largely shrugged off the minutes from the Fed’s July meeting, which showed heightened concerns about inflation, with several members of the monetary policy committee ready to raise interest rates. “Many” said rate hikes would be necessary if inflation does not fall to the U.S. central bank’s 2% target.
Moderna shares jumped 177% after reports of successful clinical trial results for an experimental mRNA-based melanoma vaccine that prevented cancer recurrence in high-risk patients.
Tech was among the session’s laggards, with chipmakers leading the declines. However, Marvell Technologies shares rose after the company said it would take part in developing custom chips for Google and offered the search giant the right to buy a potential stake in the company worth $12.2 bn.
The U.S. Treasury said that starting September 9 it will double the size of buyback operations for bonds maturing in 10 years or more—from the current $2 bn to at least $4 bn per operation. On Wall Street, the move was seen as a signal that Treasury Secretary Scott Bessent has grown concerned about the bond sell-off. The yield on 10-year Treasuries fell 7 bps to 4.63%. The U.S. dollar slipped to a more than three-month low, while the euro rose to $1.168 (+0.88%).
Oil prices extended gains for a fourth consecutive session amid shipping restrictions in the Strait of Hormuz. Data from the Energy Information Administration (EIA) showed that U.S. commercial crude oil inventories rose by 4.4 million barrels last week to 428.8 million barrels, in line with the five-year average for this time of year.
September WTI crude futures settled at $85.83 per barrel (+1.1%) on their last day before expiry.