Wall Street's major indices closed lower on Thursday, reversing the prior session's rebound, as a resurgence in long-dated Treasury yields weighed on investor sentiment. The 10-year Treasury yield climbed more than 5 basis points to 4.704%, surpassing levels seen before the Treasury Department's announcement of expanded buybacks, while the 30-year yield also rose over 5 basis points to 5.248%. Earlier in the week, the 30-year yield had touched its highest point in nearly two decades.
Treasury Secretary Bessent stated in an interview that the buyback program could "exceed" the announced $40 billion, adding that current yields do not reflect fundamental conditions and that the 30-year bond market's thin liquidity would prompt the Treasury to "make a market." Yields briefly dipped following his remarks before resuming their upward trajectory.
US Equities
The Dow Jones Industrial Average fell 703.84 points, or 1.32%, to close at 52,759.21, with a nearly 9% drop in Walmart serving as the primary drag. The S&P 500 declined 0.87% to 7,641.16, while the Nasdaq Composite slipped 1% to 26,067.17. This pullback came after the three benchmarks had ended a three-day losing streak in the previous session.
Moderna, Inc. (MRNA.US) plummeted 23.5%, and Walmart (WMT.US) fell 9%. On the upside, Marvell Technology Group (MRVL.US) gained 5.8%, Micron Technology (MU.US) rose approximately 4%, and SanDisk (SNDK.US) advanced about 2%. The Nasdaq Golden Dragon China Index closed down over 1%, though Alibaba (BABA.US) edged up 1.3%.
European Markets
Germany's DAX 30 slipped 151.32 points, or 0.58%, to 25,978.46. The UK's FTSE 100 eased 3.20 points, or 0.03%, to 10,740.15. France's CAC 40 dropped 48.82 points, or 0.57%, to 8,453.09. The Euro Stoxx 50 declined 22.81 points, or 0.35%, to 6,421.65. Spain's IBEX 35 fell 43.91 points, or 0.22%, to 19,803.59, while Italy's FTSE MIB rose 26.80 points, or 0.05%, to 52,645.00.
Asian Equities
Japan's Nikkei 225 advanced 1.36%, and South Korea's KOSPI surged 5.89%.
Dollar Index and FX
The dollar index, which measures the greenback against six major currencies, edged up 0.06% to 98.894 at the close of trading. At the New York session close, the euro traded at $1.1676, slightly above the prior day's $1.1674. Sterling rose to $1.3628 from $1.3607. The dollar strengthened to 159.14 yen from 158.32 yen and to 0.8007 Swiss francs from 0.7979. It softened to 1.3790 Canadian dollars from 1.3810, but firmed to 9.4908 Swedish kronor from 9.4386.
Cryptocurrency
Bitcoin climbed more than 4.8%, trading around $72,620 at the time of writing. Ethereum gained over 2.84%, reaching a high of $2,359.54.
Crude Oil
West Texas Intermediate crude for September delivery rose $2.00, or 2.33%, to settle at $87.83 per barrel on the New York Mercantile Exchange. Brent crude for October delivery increased $2.16, or 2.36%, to close at $93.78 per barrel.
Precious Metals
Spot gold settled at $4,519.06 per ounce, while spot silver closed at $68.155 per ounce.
Macroeconomic Developments
Foreign central bank usage of the Federal Reserve's reverse repurchase facility has climbed to its highest level since October 2022. The balance of this tool, which is available to foreign central banks and other monetary authorities, has grown for two consecutive weeks, indicating that overseas official institutions continue to bolster their dollar cash reserves. As of August 19, foreign entities held $373 billion in the Fed's reverse repo pool, up from $357 billion a week earlier. Since August 5, usage of this facility has increased by approximately $56 billion, marking the largest two-week gain since October 2022. Market participants are closely monitoring changes in foreign reverse repo balances for signs that Japan may be rebuilding dollar liquidity after its currency intervention last month.
The Trump administration has authorized the early sale of winter-grade gasoline, the latest move to mitigate fuel price pressures and supply concerns stemming from the Iran conflict. The Environmental Protection Agency announced Thursday that it will relax summer gasoline standards, permitting the market to use winter-grade fuel formulations that have higher emissions. Typically, the switch in formulations occurs in mid-September. This waiver allows for the sale of gasoline containing 10% ethanol starting September 1. The administration stated that this move effectively ends summer gasoline requirements early, potentially adding hundreds of thousands of barrels of domestic gasoline supply daily and easing price pressures for consumers at the pump.
A key US housing affordability metric deteriorated for the first time in nearly three years as higher mortgage rates forced new homebuyers to allocate a larger share of income to loan payments. Data from the National Association of Home Builders and Wells Fargo showed that in the second quarter, monthly loan payments on a median-priced home of $410,700 equated to 34% of a typical family's income. This was up from 32% in the first quarter, reversing some of the recent affordability gains seen since early 2025. During the quarter, the US-Iran war drove up borrowing costs across the economy, with 30-year mortgage rates surging to approximately 6.8%, near one-year highs. The NAHB also noted that the median new home price rose 2% during the quarter, further straining affordability.
Stock-Specific Highlights
According to sources, artificial intelligence company Anthropic anticipates its initial public offering will match or exceed the record set by SpaceX. The company is accelerating its listing preparations, with plans for a mega-IPO in the works. Anthropic is conducting calculations and preparing to publicly file its potential large-scale IPO application as early as the end of this month. Investor communication meetings led by CFO Krao have reportedly avoided addressing valuation specifics. Data indicates that rocket and satellite firm SpaceX raised $75 billion at its IPO, the largest ever, which ultimately expanded to $86.2 billion after the exercise of an over-allotment option, typically triggered when shares rise early in trading. Anthropic's ambition reflects how AI industry leaders are reshaping the technology investment landscape in record time. Reports indicate Anthropic's preliminary second-quarter revenue exceeded $11.5 billion, compared to just $787 million in the same period in 2025. By the end of July, the company's annualized revenue run rate had reached $65 billion.
Sources also revealed that Anthropic is planning to bring Citigroup (C.US) into the core underwriting syndicate for its IPO. If finalized, Citigroup would join Morgan Stanley, Goldman Sachs, and JPMorgan in a leading role. Anthropic could file its listing application with regulators as early as the end of this month. Core underwriting positions in major IPOs not only bring substantial fee income but also boost investment banks' rankings in equity capital markets. Citigroup currently ranks among the top US IPO underwriters this year, partly due to its involvement in SpaceX's record $86.2 billion offering. Sources noted that listing preparations are ongoing, and the final syndicate composition could change, with additional banks potentially being added.
Broadcom (AVGO.US) is reportedly in talks with a group of lenders to raise over $60 billion in debt financing for an AI chip deal that would benefit companies like Anthropic. Sources indicated that the financing plan, still being finalized, may include a subordinated debt tranche of approximately $30 billion. Under the proposed arrangement, Broadcom would guarantee a portion of the senior secured debt, with that segment potentially ranging from $60 billion to $70 billion. Based on current discussions, the total financing package could reach up to $100 billion. This agreement would further fuel the boom in financing around AI infrastructure. AI companies like Anthropic are increasingly involved in building out infrastructure to secure sufficient computing capacity. Meanwhile, Broadcom is seeking to expand chip and data center equipment sales, challenging Nvidia in this lucrative market.
Retail earnings indicate that US consumers are still spending, but they are becoming more value-conscious amid elevated prices. Walmart (WMT.US) reported its slowest sales growth in over six years on Thursday, weighed down by its pharmacy business. However, the company stated that overall spending remains relatively stable, even as consumers make trade-offs to prioritize value. This week, Target and Home Depot also reported sales growth, describing consumers as resilient and willing to open their wallets if they find the right products at the right prices. Walmart's CFO Rainey noted, "We do see consumers making trade-offs," adding that the number of items per shopping trip is declining. "With fuel prices rising, consumers are facing increased pressure compared to the start of the year."
Comments