FX.co ★ US Stocks Rebound on Higher Treasury Buyback

US equities edged higher on Tuesday after the Treasury signaled it will step up purchases of notes and bonds. The S&P 500, Dow Jones Industrial Average, and Nasdaq 100 all traded slightly above the flatline.

The Treasury said it would double the cap on buybacks of long-dated securities, building on a series of recent measures aimed at curbing the sharp rise in longer-term benchmark borrowing costs. In addition to easing rate pressures, expectations of increased dollar liquidity from the Treasury’s actions lent further support to stocks. US Treasury yields were also in focus ahead of the release of the FOMC meeting minutes.

Gains were broad-based across most sectors, with software and hyperscale cloud names generally trading higher. Apple, Salesforce, and Tesla each advanced about 1%. Retail stocks strengthened as well after TJX, Target, and Lowe’s all reported their second-quarter earnings.

In healthcare, Moderna’s share price doubled and Merck climbed 10% after a trial of their jointly developed vaccine showed it reduced melanoma recurrence.