US stocks: US market regains ground as bond yields ease; healthcare stocks rally
Major stock indexes recovered on Wednesday after a prior day's decline. Moderna shares surged significantly following positive cancer therapy trial results. Government bond yields eased from highs, boosting investor risk appetite. Retailers like Target and Lowe's reported quarterly results, influencing consumer spending views. Geopolitical developments and Federal Reserve minutes remained key…
On Wednesday, US stocks rebounded after a technology-driven sell-off the previous day, as government bond yields cooled from record peaks, according to Reuters. Moderna's stock soared more than double following a late-stage trial demonstrating its personalized mRNA cancer treatment, in collaboration with Merck, reduced melanoma recurrence and spread. Merck's shares climbed 9.6%, benefiting the Dow Jones Industrial Average.
The momentum extended to other biotech firms, with Novavax up 6.8% and BioNTech's US-listed shares soaring 17.5%. The S&P 500 healthcare sector surged 2.7% to a record high, driving gains across the benchmark index. Marvell Technologies skyrocketed nearly 9% after securing a $12.18 billion warrant from Alphabet's Google, while Broadcom tumbled 4% in reaction to the deal.
The technology sector in the S&P 500 declined 0.4%, capping broader market gains. Major tech stocks experienced significant sell-offs on Tuesday due to escalating bond yields to multi-decade highs, heightened concerns about mounting government debt, and geopolitical tensions.
Wednesday saw the 30-year Treasury yield retreat from its highest level since 2007 after the US Treasury announced plans to double its liquidity-support purchases of longer-dated bonds, boosting investor appetite for risk. The yield had reached 5.209% earlier in the day.
Dow Jones rose 119.94 points, or 0.22%, to 53,463.34, while the S&P 500 gained 28.48 points, or 0.37%, reaching 7,720.24, and the Nasdaq Composite increased 67.17 points, or 0.26%, to 26,356.89. Retail sector earnings were closely watched as investors sought reassurance about US consumer strength. Target increased 3.3% after raising its annual sales forecast, while Lowe's rose 1.8% despite lowering its growth projection.
Estée Lauder surged over 14% after forecasting annual profit above Wall Street expectations. Walmart, considered a key indicator of consumer spending, is scheduled to announce its quarterly results on Thursday. Geopolitical tensions persisted, with US President Donald Trump stating no talks were underway with Iran and asserting the Strait of Hormuz remained open, contradicting Iran's claim that it was still closed to shipping.
Brent crude futures rose slightly and traded near three-week highs. Investors awaited minutes from the US Federal Reserve's July meeting for additional insight into the central bank's interest-rate trajectory. Market expectations were for at least one 25-basis-point rate hike by the end of 2026, but the probability of a September hike dropped significantly following weak inflation data in the previous month.
Advancing stocks outnumbered declining issues by a 3.97-to-1 ratio on the New York Stock Exchange (NYSE) and a 2.35-to-1 ratio on the Nasdaq, while the S&P 500 recorded eight new 52-week highs and no new lows, and the Nasdaq Composite achieved 60 new highs and 29 new lows.
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