US stocks bounce back as bond yields retreat, Moderna rallies over 150%, Merck jumps 9.6%

US stock indices recovered on Wednesday after suffering a technology-led selloff in the previous session, as a retreat in government bond yields helped improve investor sentiment.

As of 10:30 a.m. Eastern Time, the S&P 500 rose 0.4%, the Dow Jones Industrial Average was up 0.5%, and the Nasdaq Composite was virtually unchanged.

At the open, the Dow Jones Industrial Average rose 120.1 points, or 0.23%, to 53463.47. The S&P 500 rose 25.0 points, or 0.32%, to 7716.74, while the Nasdaq Composite rose 104.2 points, or 0.40%, to 26393.889.

On tuesday, stocks came under heavy pressure after Treasury yields climbed to multi-decade highs. Concerns over rising US government debt, along with geopolitical uncertainty, triggered a selloff in the bond market and weighed on equities.

The yield on the 30-year US Treasury bond fell to 5.209% on Wednesday after reaching its highest level since 2007. Sentiment improved after the US Treasury said it would double the size of its liquidity-support buyback operations for longer-dated government bonds, helping ease pressure in the bond market and encouraging investors to return to riskier assets.

Key Stock Movers

Moderna shares jumped more than 150% after the vaccine maker reported that its personalised mRNA cancer treatment, developed with Merck, reduced the risk of melanoma recurrence and the spread of the disease in a late-stage clinical trial.

Merck shares also rallied 9.6%, while other biotechnology companies followed higher. Novavax gained 6.8%, and US-listed shares of BioNTech surged 17.5%.

Marvell Technology shares climbed about 9% after the chipmaker disclosed that Alphabet's Google had received a warrant to purchase a stake valued at approximately $12.18 billion.

Broadcom shares, meanwhile, fell more than 4% following the recent strength in the semiconductor sector.

Among retailers, Target gained 3.3% after raising its annual sales outlook. Lowe's advanced 1.8% even after the home-improvement retailer lowered its forecast for annual sales growth.

Estee Lauder was another major gainer, with shares jumping more than 14% after the cosmetics company projected full-year profit above Wall Street expectations.

Iran Tensions, Fed Minutes in Focus

Geopolitical developments also remained on investors' radar. US President Donald Trump said there were no negotiations underway with Iran and maintained that the Strait of Hormuz remained open to shipping. His comments contradicted Iran's position that the strategically important waterway remained closed to maritime traffic.

Investors were also preparing for the release of minutes from the Federal Reserve's July meeting later on Wednesday. The minutes are expected to provide additional clues about policymakers' views on interest rates and the direction of monetary policy.

Bullion

Gold prices surged on Wednesday after a surprise liquidity support announcement by the US Treasury knocked down bond yields and the US dollar.

By 10:35 a.m. EDT (1435 GMT), spot gold climbed 3.5% to $4,486.88 per ounce. US gold futures increased 2.8% to $4,546.10.

Among other metals, spot silver rallied 3.69% to $65.64 per ounce, platinum rose nearly 4% to $1,779.89 and palladium advanced 2.8% to $1,326.13.

Crude Oil

Oil prices climbed on Wednesday as expectations for an imminent reopening of the Strait of Hormuz weakened, while rising global bond yields added to concerns over inflation and mounting government debt.

Brent North Sea Crude rose 0.5% at $91.45 per barrel, while West Texas Intermediate added 0.5%.