Dow Rebounds on Treasury Buyback Expansion Amid Rising Yields

The Dow Jones Industrial Average rebounded on August 19 after three consecutive sessions of declines, driven by the U.S. Treasury Department's announcement to expand its Treasury buyback program for liquidity support.

The Treasury plans to increase the per-operation cap from $2 billion to at least $4 billion, which will take effect from September 9 through November 4, affecting 10- to 20-year and 20- to 30-year Treasuries.

This move sent long-term yields in the U.S. bond market lower, with a drop of up to 0.07 percentage point to 4.63% on August 19. The 30-year Treasury yield, which had reached its highest level since June 2007, also plummeted.

The expansion of the Treasury buyback program and the subsequent decline in yields helped ease investors' risk aversion, causing buying pressure in select blue-chip stocks. Among individual Dow components, Merck surged over 12% after announcing positive results for its personalized cancer vaccine, while Moderna skyrocketed as much as 2.3-fold.