U.S. stocks snapped a three-day losing streak Wednesday as a new Treasury Department plan helped calm pressure in the bond market.
Investors also found support in stronger-than-expected earnings from companies including Estée Lauder, Target, Lowe’s and Toll Brothers. The S&P 500 gained 0.2%, marking its first advance in four sessions after reaching a record high last week.
The Dow Jones Industrial Average rose 119.65 points, or 0.2%, while the Nasdaq composite added 0.2%. The moves came as investors watched Treasury yields closely after months of concern about inflation, government borrowing and rising debt.
Treasury Move Brings Relief
The Treasury Department said it would at least double the size of its planned purchases of longer-term Treasury securities between Sept. 9 and Nov. 4. The department said the move would provide “greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants.”
The announcement pushed bond yields lower during Wednesday morning trading. The yield on the 10-year Treasury dropped to 4.64%, down from 4.71% late Tuesday. Even with that decline, the rate remains well above its 3.97% level before the war with Iran pushed oil prices and inflation concerns higher.
The 30-year Treasury yield also declined. It fell to 5.18% from 5.28% the previous day after recently reaching its highest level since 2007.
Long-term Treasury yields respond mainly to investor demand rather than direct Federal Reserve control. The Fed influences short-term borrowing costs through the federal funds rate, while bond investors determine how much return they want for holding longer-term U.S. government debt.
Recently, investors have demanded higher yields because of inflation risks, large federal deficits and other economic concerns.
Analysts See Limited Relief
The Treasury announcement offered a lift to markets, but some analysts warned that its effect could remain limited. The planned purchases represent only a small portion of the enormous Treasury market.
Strategists at BNP Paribas pointed to concerns about Federal Reserve credibility. They wrote that the increase in Treasury buybacks was happening “in a world of challenged Fed credibility.” Investors are weighing whether the Federal Reserve will raise the federal funds rate soon in response to tough comments from its chairman, Kevin Warsh, about bringing inflation back toward the 2% target.
The BNP Paribas strategists said they did not expect the buybacks to fully compensate for continued concerns about the Fed. They described the purchases as “necessary, but not sufficient.”
Earnings Give Stocks Another Lift
Corporate earnings provided another source of support. Moderna and Merck surged after announcing encouraging initial results from a study involving a cancer vaccine they developed together.
The treatment showed better recurrence-free survival among melanoma patients who received the vaccine combination with Merck’s Keytruda than among those who received Keytruda alone. Moderna shares jumped 177%, while Merck gained 12.6%.
Estée Lauder also posted a strong session, with its shares climbing 16.3%. CEO Stéphane de La Faverie said a key measure of revenue growth had accelerated for a fourth consecutive quarter. Revenue increased across global markets, with mainland China delivering the strongest growth.
The company reported adjusted earnings of 39 cents per share, compared with 9 cents a year earlier. Analysts had expected 32 cents, according to FactSet.
Other companies also helped the market. Target rose 4.3%, Lowe’s gained 2%, and homebuilder Toll Brothers climbed 4% after each reported quarterly profits above analyst expectations.
Big Tech Remains a Weak Spot
Not every corner of the market advanced. Broadcom dropped 4.6%, making it the biggest drag on the S&P 500.
The decline reflects wider concerns surrounding companies that benefited from the artificial-intelligence boom. Their shares have swung sharply in recent months as investors question whether valuations have moved too high and whether AI-related spending will generate enough profit to justify those prices.
The concern matters because stock prices generally follow corporate earnings over longer periods. Strong profit growth can support elevated valuations, while weaker results can make expensive stocks harder to defend.
Global Markets Stay Uneven
U.S. markets ended Wednesday with modest gains. The S&P 500 rose 16.22 points to 7,707.98. The Dow increased 119.65 points to 53,463.05, and the Nasdaq composite gained 41.38 points to 26,331.09.
Outside the U.S., trading was less steady. Asian indexes were mostly lower, while European markets were mixed. Japan’s Nikkei 225 fell 3.2%. South Korea’s Kospi dropped 5.8%, reflecting another sharp move in a market heavily exposed to AI-related stocks.
Wednesday’s gains offered some relief, but investors are still watching Treasury yields, inflation, federal borrowing, and Fed policy. Corporate earnings will also remain important in determining whether stock prices can hold their recent levels.
The Treasury’s planned purchases could ease bond-market pressure, though concerns over inflation and government debt remain. Future moves in bond yields and company profits will likely shape the market’s direction.