US stocks: US market regains ground as bond yields ease; healthcare stocks rally

Wall Street’s main indexes bounced back on Wednesday after a technology-led selloff in the previous session, as US government bond yields eased from multi-decade highs and investors digested a series of corporate updates, Reuters reported.

Moderna shares more than doubled after a late-stage trial showed that its personalised mRNA cancer therapy, developed with Merck, lowered the risk of melanoma recurrence and spread. Merck climbed 9.6%, boosting the blue-chip Dow.

The rally extended to other biotechnology stocks, with Novavax rising 6.8% and US-listed shares of BioNTech surging 17.5%. The S&P 500 healthcare sector advanced 2.7% to a record, leading gains across the benchmark index.

Marvell Technologies jumped about 9% after the chipmaker gave Alphabet’s Google a warrant to purchase stake valued at about $12.18 billion.

The deal sent Broadcom down 4% and pulled the Philadelphia SE Semiconductor index 0.7% lower. Technology stocks in the S&P 500 slipped 0.4%, capping gains in the broader market.

Major technology stocks suffered heavy selloff on Tuesday as government bond yields climbed to multi-decade highs. Worries about swelling government debt and geopolitical tensions intensified pressure on bond markets.

On Wednesday, the 30-year Treasury yield fell from its highest level since 2007 after the US Treasury announced plans to double its liquidity-support buybacks of longer-dated bonds, improving investors’ appetite for risk. The yield was last at 5.209%.“Most tech companies are priced mainly on forward earnings expectations and when interest rates creep up, those expectations are worth less, and the stocks are worth less,” Robert Pavlik, senior portfolio manager at Dakota Wealth, told Reuters.

The Dow Jones Industrial Average gained 119.94 points, or 0.22%, to 53,463.34. The S&P 500 added 28.48 points, or 0.37%, to reach 7,720.24, while the Nasdaq Composite rose 67.17 points, or 0.26%, to 26,356.89.

Retailers’ quarterly results are in focus as investors looked for fresh evidence about the strength of the US consumer.

Target gained 3.3% after raising its annual sales forecast. Lowe’s advanced 1.8% even as it reduced its annual sales growth projection.

Estée Lauder soared more than 14% after forecasting annual profit above Wall Street expectations.

Walmart, widely viewed as a barometer of consumer spending, is set to release its quarterly results on Thursday.

Geopolitical developments remained on investors’ radar after US President Donald Trump said no negotiations were underway with Iran and maintained that the Strait of Hormuz was open. His remarks contradicted Iran’s claim that the waterway remained closed to shipping.

Brent crude futures rose 0.2% and traded near three-week highs.

Investors awaited minutes from the US Federal Reserve’s July meeting later in the day for further clarity on the central bank’s interest-rate outlook.

Markets are pricing in at least one 25-basis-point rate increase by the end of 2026, according to data compiled by LSEG. However, expectations for a hike as early as September have dropped significantly following last week’s mild inflation figures.

Solid earnings from a range of sectors, including some AI hyperscalers, propelled the S&P 500 and the Dow to record highs earlier this month. Still, investors continued to question whether substantial spending on artificial intelligence would deliver meaningful returns in the near term.

Advancing stocks outnumbered declining issues by a 3.97-to-1 ratio on the NYSE and a 2.35-to-1 ratio on the Nasdaq, while the S&P 500 registered eight new 52-week highs and no new lows, and the Nasdaq Composite recorded 60 new highs and 29 new lows.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)