[New York Stock Exchange] 10-Year Yield Rises on Buyback Announcement... All Indices Fall as Oil Tops $100

10-Year Treasury Yield Surges to 4.85% Intraday
Buyback Program Expanded to $600 Million Per Session, Triple the Previous Limit
Market Hoped for $700 Million to $1 Billion
Oil Prices Jump Over 3%, Surpassing $100 per Barrel

On the 9th (local time), all three major indexes on the New York Stock Exchange closed lower. Although the U.S. Treasury tripled the scale of its Treasury buyback program, the expansion failed to meet market expectations, leading to a rise in market interest rates instead. Additionally, heightened tensions in the Middle East sent international oil prices up by more than 3%, further inflaming inflation concerns and significantly weakening investor sentiment toward risk assets.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell by 405.41 points (0.77%) from the previous session to close at 52,380.66. The large-cap S&P 500 index dropped by 37.16 points (0.48%) to 7,636.36, while the tech-focused Nasdaq Composite finished at 26,253.34, down 168.07 points (0.64%).

Inside the New York Stock Exchange. New York, USA – Special Correspondent Yoonju Hwang

On this day, the market expressed disappointment in the U.S. Treasury's buyback size for 10- to 20-year Treasury bonds. The Treasury set the maximum purchase amount for the buyback of 10- to 20-year bonds scheduled for September 10 at $600 million, which is three times higher than the previous cap of $200 million.

Previously, Treasury Secretary Scott Bessent announced that, as yields on 10-year Treasuries surged, the maximum buyback size for both the 10- to 20-year and 20- to 30-year bonds would be raised from the previous $200 million per session to at least $400 million. After long-term Treasury yields rebounded within a day following an initial drop, he stated again that the buyback program would be expanded to at least double its prior size.

Market expectations were for a buyback amount of $700 million to $800 million, with some estimates reaching up to $1 billion. However, the announced figure fell short of these expectations, and the yield on the 10-year Treasury rose to 4.857% during the session—the highest since November 2023.

The previous day, inflation concerns stemming from rising oil prices had also pushed the 10-year yield above the key market threshold of 4.8%. When Treasury yields rise, equities—being relatively risky assets—become less attractive to investors.

The sharp rise in international oil prices, fueled by escalating tensions between the United States and Iran, also weighed on investor sentiment. A senior Iranian official stated that if the U.S. continues its attacks on Iranian territory and infrastructure, Iran would intensify its retaliatory strikes.

The U.S. Central Command said the previous day that it attacked five Iranian oil tankers, describing this as a response to attempted attacks by Iran’s Islamic Revolutionary Guard Corps (IRGC) on U.S. Navy vessels. Meanwhile, Houthi rebels struck cities and energy facilities in southern Saudi Arabia, undermining the lull between both sides that had persisted since the UN-brokered ceasefire in 2022.

International oil prices surged at the close. On the ICE Futures Exchange, November delivery Brent crude finished up 3.36% at $101.21 per barrel. On the New York Mercantile Exchange, October delivery West Texas Intermediate (WTI) rose 3.25% to settle at $96.05 per barrel. Both benchmarks marked their highest closing prices since May 22.

Should rising oil prices spread to broader inflation, concerns are growing that the Federal Reserve could either maintain high interest rates for an extended period or even raise rates further.

Thomas Martin, senior portfolio manager at Globalt Investments, noted that despite rising oil prices and yields, the stock market has so far managed to remain relatively resilient. He stated, "Investor sentiment in the stock market has reached an extreme, while expectations for rate hikes are also at an extreme," adding, "It is unlikely that both conditions can coexist for long." He also commented that if Brent crude reaches $120 a barrel, "it will capture the market’s attention."

By stock, Apple, which announced its foldable phone, closed 0.28% lower than the previous session. According to CNBC, investors and analysts’ skeptical outlooks reflected the fact that, in recent years, Apple’s stock price has often fallen or remained flat rather than surging after new product launches.

Lithium Americas climbed 6.33% after JPMorgan upgraded its investment rating to "overweight." JPMorgan expects the company’s long-term earnings potential to increase, setting a target price of $6 per share—about a 100% gain from the most recent closing price.

This content was produced with the assistance of AI translation services.