U.S. Treasury Steps In as Stocks Rebound; Moderna Soars Nearly 180%

Market Overview

The U.S. Treasury announced an increase in the cap on its long-term Treasury buyback operations, a move widely interpreted by markets as an indirect effort to rein in long-end yields. The announcement triggered a sharp drop in the 30-year Treasury yield and helped U.S. equities snap a three-session losing streak.

The S&P 500 rose 0.21% to close at 7,707.98, the Dow Jones Industrial Average gained 0.22% to 53,463.05, and the Nasdaq Composite advanced 0.16% to 26,331.09.

Moderna shares surged nearly 180% after a Phase 3 trial of its mRNA-based cancer vaccine, developed in partnership with Merck, delivered positive results.

Chinese A-shares, meanwhile, suffered a sharp selloff. The Shanghai Composite tumbled 2.40% to 3,894.42, the Shenzhen Component plunged 5.01% to 13,890.15, and the ChiNext Index sank 6.26% to 3,473.49.

Across commodities, spot gold jumped 2.83% to $4,489.40 per ounce, while silver gained 2.8% to $65.73 per ounce. WTI crude rose 1.05% to $85.83 per barrel, and Brent crude climbed 0.66% to $91.62 per barrel.

The U.S. Dollar Index fell to its lowest level since late May. The 10-year U.S. Treasury yield stood at 4.65%, while the VIX dropped 6% to 14.89.

Key Themes to Watch● mRNA Cancer Vaccine Marks a Historic Breakthrough

A personalized mRNA vaccine for melanoma, jointly developed by Moderna and Merck, delivered positive results in a large-scale Phase 3 clinical trial. Following the announcement, Moderna shares skyrocketed nearly 180% in a single session, while Merck gained nearly 13%, making it one of the top-performing components of the Dow.

The results mark the first successful Phase 3 cancer trial for mRNA technology since the platform rose to prominence through COVID-19 vaccines. The breakthrough represents a major milestone for personalized immunotherapy in oncology and has prompted investors to reassess the commercial potential of mRNA platforms beyond infectious diseases.

● Treasury's "Indirect Intervention" in the Yield Curve Sparks Debate

The U.S. Treasury announced that it would raise the per-operation cap on long-term Treasury buybacks from $2 billion to $4 billion, effectively doubling the limit and sending a policy signal that markets interpreted as an effort to influence long-term interest rates.

Long-dated Treasury yields fell sharply following the announcement, with the 30-year yield dropping roughly 9 basis points intraday.

The move has sparked intense debate on Wall Street. Some market participants view it as a Treasury-led form of "yield curve control" (YCC), while others have characterized it as a modified version of quantitative tightening (QT). Another interpretation gaining traction is that the policy resembles a "Trump put," suggesting that policymakers may be increasingly willing to step in and provide support when financial markets come under significant pressure.

Key Events to Watch

Today: China releases its August one-year and five-year Loan Prime Rates (LPR).

Today: The U.S. releases weekly initial jobless claims.

Today: Alibaba reports earnings and holds its earnings conference call.

Ping An Insurance, China Tourism Group Duty Free, China Telecom, NetEase, Pop Mart, CITIC Securities, and Li Ning are also scheduled to release earnings.

Walmart is set to report its latest quarterly results, with investors closely watching retail sales and consumer spending trends.

The U.S. Dollar Index has fallen to its lowest level since late May, while concerns surrounding Federal Reserve independence and the future path of U.S. interest rates remain firmly in focus.