US Treasury's buyback boost sends bond yields tumbling; Wall Street's 3 major indexes edge up

Wall Street's three major indexes edged up Wednesday after the US Treasury doubled the size of its long-term government bond buyback program, sending yields sharply lower. Semiconductor stocks, however, remained under pressure.

The Dow Jones Industrial Average closed up 119.65 points, or 0.22 percent, at 53,463.05 on the New York Stock Exchange on Wednesday. The S&P 500 rose 16.22 points, or 0.21 percent, to 7,707.98, while the NASDAQ Composite gained 41.38 points, or 0.16 percent, to close at 26,331.09.

The moves came after the Treasury's announcement of an expanded buyback program eased market anxiety.

The Treasury said it would double its per-operation buyback size for long-term government bonds — from $2 billion to at least $4 billion — to improve liquidity in that market. The move came after the 30-year Treasury yield surged to its highest level in 19 years on Wednesday.

A government bond buyback involves the Treasury repurchasing existing bonds trading in the market. The aim is to inject liquidity into specific maturity segments and support the smooth functioning of the bond market.

Long-term yields fell after the announcement. The 30-year Treasury yield dropped roughly 10 basis points during trading to around 5.18 percent. One basis point equals 0.01 percentage point.

The Philadelphia Semiconductor Index fell 2.12 percent. Broadcom and AMD dropped 4.6 percent and 3.7 percent, respectively.

Seo Sang-young, a managing director at Mirae Asset Securities' WM Innovation Division, said semiconductor stocks continued to lag even as long-term yields fell sharply, attributing the weakness to growing concerns about delays in data center construction.

He added that Pennsylvania's governor had issued an executive order excluding AI data centers from expedited permitting and requiring them to meet conditions including local government approval, power grid cost obligations and strict environmental regulations — fueling fears that data center permitting and power infrastructure could become new bottlenecks for AI investment.

Marvell Technology, a US semiconductor design company, surged 9.9 percent after news broke that it had signed a deal with Google to develop and supply custom semiconductors and had secured rights to acquire a large equity stake.

US pharmaceutical company Moderna soared 177 percent. The company said a personalized mRNA cancer therapy it co-developed with Merck had succeeded in reducing the risk of cancer recurrence and metastasis in a Phase 3 clinical trial involving high-risk melanoma patients. Merck's share price also jumped more than 12 percent.

Gold prices surged, with spot gold trading up 4.05 percent at $4,508.64 per ounce. Gold-linked ETFs tracked by Bloomberg recorded a net inflow of more than 257,000 ounces in a single day — the largest daily inflow since April.