Briefing.com Summary:
*Ongoing volatility in chip stocks during overnight session
*Treasuries extend Tuesday bounce
*Health care sector lifted by Moderna (MRNA)
The stock market was challenged by renewed volatility in chip stocks and the continued rise in the 30-yr yield on Tuesday, resulting in a dip from a record high in the S&P 500.
Chip stocks remained volatile overnight, prompting a trading halt in South Korea’s Kospi (-5.8%), which deepened Tuesday’s reversal from its highest level since mid-July. This is setting up a somewhat challenging environment for the start of today’s session, but some sunshine has crept through the clouds in the form of easing Treasury yields.
Yesterday’s session saw the 30-yr yield notch another fresh 2026 high (5.326%) before a steady intraday bid. This was followed by some more overnight buying in the Treasury futures market, though the belly has been at the forefront of today’s early advance with the 5-yr yield down four basis points at 4.33% while the 30-yr yield is down nine basis points at 5.20%.
The advance in Treasuries drew some encouragement from an overnight bounce in JGBs after their recent weakness also drove Japan’s longer-dated yields to fresh highs for the year. The market has kept a close watch on the direction of JGB yields knowing that a continued rise in those yields will encourage more Japanese investors to repatriate their foreign investments, especially if the Japanese yen sustains its late-July bounce off its weakest level against the dollar since late 1986.
While the market is on track for a flat start, there is budding strength in the health care sector in general, and the biotechnology group in particular with Moderna (MRNA) doubling in value after the release of encouraging results from a melanoma trial.
The market did not receive any top-tier data today, but the FOMC will release the Minutes from its July meeting at 14:00 ET and the U.S. Treasury will sell $16 bln in 20-yr bonds at 13:00 ET.
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Originally Posted 8/19/26 – Cloudy with a chance of sunshine
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