U.S. stocks rebounded on Aug. 19 as easing Treasury yields helped investors move back into riskier assets, with traders waiting for the FOMC Minutes later in the day for a clearer read on the Federal Reserve's policy path. By 12:18 p.m. ET, the Dow Jones Industrial Average was up 218.24 points, or 0.41%, at 53,564.38, the S&P 500 had gained 45.89 points, or 0.60%, to 7,737.65, and the Nasdaq Composite rose 156.02 points, or 0.59%, to 26,445.73.
The rebound came after a steep tech selloff in the prior session, and it was helped by a retreat in the 30-year Treasury yield, which pulled back from its highest level since 2007 to 5.203% after the U.S. Treasury said it would double the size of liquidity support buyback operations for longer-dated bonds. That mattered because rising yields had just pressured stocks, and Robert Pavlik said most tech companies are priced on forward earnings expectations, so when interest rates creep up, those expectations are worth less and the stocks are worth less.
Healthcare led the day’s push higher. Moderna more than doubled after late-stage trial results for its personalized mRNA cancer therapy, developed with Merck, showed a lower risk of melanoma recurrence and spread. Merck climbed 11.2% and was the biggest boost on the Dow, Novavax added 6%, U.S.-listed shares of BioNTech rallied 21%, and the S&P 500 healthcare sector rose 2.9% to a record high.
The strength was broad, but not complete. Information technology stocks on the S&P 500 were flat, and the wider semiconductor index still fell 1.3% after Broadcom lost 4% when Marvell Technologies issued Alphabet's Google a warrant to buy a stake worth about $12.18 billion. Marvell surged 9.8% on the news, while the mixed tone showed that lower yields alone were not enough to repair every corner of the market after Tuesday's bond-driven jump in global yields.
Other pockets of the market also moved on company updates. Target rose 5% after lifting its annual sales forecast, Lowe's gained 2.4% even after trimming its sales growth forecast, and Estee Lauder jumped more than 16.7% after it projected annual profit above Wall Street estimates. Brent crude futures added 1% to hit near three-week highs after Donald Trump said no talks were taking place with Iran and insisted the Strait of Hormuz was open, keeping inflation worries in view as Sam Stovall said elevated oil prices were contributing to concern and that if the Federal Reserve was not going to do anything about it, the bond market would.
That is why the FOMC Minutes mattered so much on Aug. 19. Traders already see at least one 25-basis-point rate hike from the Federal Reserve by the end of 2026, but the odds of a move as soon as September have fallen sharply after last week's tame inflation data, leaving the minutes to fill in how officials are thinking about inflation, yields and the next policy step. Advancing issues outnumbered decliners by a 2.42-to-1 ratio on the NYSE and a 1.74-to-1 ratio on the Nasdaq, but the market was still looking for a clearer answer from the Fed before the session was over.
