Dow tumbles 700 points, S&P 500 falls as Treasury plan to subdue yields fails

U.S. stocks fell as Treasury yields continued their march higher despite the Treasury Department's extraordinary debt buyback operation, raising concerns that higher borrowing costs will throw a wrench into the bull market.

The Dow Jones Industrial Average shed 703.84 points, or 1.32%, weighed down by a 9% drop in Walmart shares. The 30-stock index closed at 52,759.21. The S&P 500 lost 0.87% and closed at 7,641.16, while the Nasdaq Composite dropped 1% to 26,067.17.

Bond yields advanced on Thursday, with the yield on the 10-year Treasury note climbing back above the level it was at just before the Treasury Department said Wednesday morning that it will at least double repurchases of 10-, 20- and 30-year debt in the next few months. Treasury Secretary Scott Bessent told CNBC Thursday that the debt buyback operation could actually be larger than the $4 billion that was announced.

The 10-year yield gained more than 5 basis points to 4.704%. The 30-year Treasury bond yield added more than 5 basis points at 5.248%. The 30-year yield spiked to its highest level in nearly 20 years earlier this week.

Adam Phillips, managing director of investments at EP Wealth Advisors, is skeptical that the buyback program will be enough to provide any relief, however.

"This is not the cure to what ails the bond market. There are structural forces here at play that are really beyond the Treasury and the administration's control," he said, adding that the relief seen in the wake of past interventions has generally been short-lived. "You're going to need to come at it with a little bit more force if it's going to have staying power."

Also weighing on equities, oil prices rose again amid increasing tensions between Iran and the U.S. When discussing Iran, President Donald Trump said in a Truth Social post Wednesday that the U.S. would begin the "MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY!"

"This will be Economic Warfare and Isolation on an unprecedented scale," he wrote.

On that front, Bessent said in a Thursday interview with CNBC that the U.S. is going to impose the "toughest sanctions in history" against Iran.

West Texas Intermediate crude's contract for October delivery rose nearly 3% to $86.83 per barrel, while global benchmark Brent crude futures moved up more than 2% to $93.78 a barrel.

A pullback in Walmart shares hit the broader market as well. The retail giant posted its worst day in more than four years after its U.S. comparable sales missed analyst expectations, as did its adjusted earnings forecast for both the third quarter and full year.

Wall Street is coming off a winning session, with the S&P 500 snapping a three-session losing streak, as yields on longer-dated U.S. Treasurys pulled back from multi-year highs after the government unveiled a plan to ease pressure from a recent bond market rout.

— CNBC's Tobias Burns contributed reporting.

The three leading U.S. indexes finished in negative territory on Thursday.

The S&P 500 declined 0.87% to end at 7,641.16, while the Nasdaq Composite dropped 1% to settle at 26,067.17. The Dow Jones Industrial Average lost 703.84 points, or 1.32%, to close at 52,759.21.

Target's latest earnings show the retailer is making progress with its turnaround, although its beat on the top and bottom lines and raised guidance was expected, Truist Securities said in a note Wednesday.

"It is clear that the changes that Target has been making over the last 6-9 months, including investments in price, labor, store standards and merchandise/merchandising, is resonating with their customers, as comps and transactions have improved," analyst Scot Ciccarelli said.

"At 17x-18x, the stock is trading at a 15-20% discount to the market vs. its 3-yr avg of a ~33% discount, so the question is whether the stock can continue to work from its current valuation," he added.

Ciccarelli maintained his hold rating, but said he is "interested" to see what happens from here.

JPMorgan thinks markets are underestimating the potential of chipmaker Broadcom.

The Palo Alto-based company is on track for a 180% annual jump in AI sales that features a solid product partnership with Alphabet, the investment bank believes.

"We think the market continues to underestimate Broadcom's significant dominance/lead (18 months+), chip/package design leadership, aggressive cadence of new designs, IP portfolio, and track record of execution (Broadcom has helped Google bring to market 14 of its most advanced chip designs over the past 12 years)," analyst Harlan Sur told clients in a Wednesday note.

Shares of Broadcom closed Wednesday at $362.48.

Deere shares jumped about 6% Thursday after the farm and construction equipment maker reported stronger-than-expected quarterly results and raised the low end of its full-year profit outlook.

Deere posted a profit of $1.38 billion for the third quarter ended Aug. 2, 2026, compared with $1.29 billion in last year's comparable period. Total worldwide net sales and revenues for the company rose 5% to $12.6 billion for the third quarter.Â

By segment, construction and forestry sales jumped 18% to $3.6 billion, while small agriculture and turf sales rose 12% to $3.4 billion. However, the sales across the company's largest division, production and precision agriculture slipped 6%, to nearly $4 billion. The company attributed this primarily to lower shipment volumes.

Its full-year net income is forecasted to be in a range of $4.75 billion to $5 billion.Â

"As we look ahead, we continue to believe 2026 will mark the bottom of the current ag equipment cycle," said John C. May, chairman and CEO. "Across our business, early order program trends, improving used-equipment inventories, and increasing customer adoption of our advanced technologies give us confidence that Deere is well positioned for long-term value creation."

Walmart shares declined almost 9% in early afternoon trading Thursday, heading for their worst day in more than four years, after the company's latest quarterly results.

If the stock closes at current levels, it will notch its worst day since May 17, 2022, when it fell more than 11%.

JPMorgan reiterated an overweight rating on Analog Devices after the semiconductor company posted strong third-quarter earnings that suggested data center growth will outpace expectations.

"Broad-based strength drives another beat-and-raise; data center growth likely to outstrip current expectations," Harlan Sur wrote in a Wednesday note. "Further pricing gains still on the come."

In its third quarter, Analog Devices posted a beat on the top and bottom lines, with earnings of $3.45 per share, excluding items, on revenue of $4.02 billion. Analysts polled by FactSet were anticipating earnings of $3.34 per share on revenue of $3.92 billion.

The stock was up about 1% Thursday. It's already up around 39% year to date.

Treasury Secretary Scott Bessent told CNBC on Thursday that an accelerated buyback of government debt could be higher than the announced $4 billion.

In a live interview, Bessent said his department is going "make a market" in the longer-dated securities where yields have been surging lately. Treasury announced Wednesday that it would be doubling its scheduled $2 billion in buybacks of longer-dated government debt, sending yields sharply lower.

TD Cowen put a hold rating on pharmaceuticals giant Merck despite Wednesday's news that the company's cancer vaccine succeeded in a large trial.

"Success is not unduly surprising given strong Phase II data," Steve Scala at TD Cowen wrote in a Thursday note to clients. "Positive results serve as validation ... but breadth of potential still unknown."

TD Cowen has a price target of $137 on Merck stock, compared to Wednesday closing price of $152.20.

The three major averages began Thursday's session in the red.

The Dow Jones Industrial Average lost 421 points, or 0.8%, just after 9:30 a.m. ET. The S&P 500 dropped 0.4%, while the Nasdaq Composite fell 0.5%.

Factory activity in the Philadelphia area hit its highest level in more than five years during August, the regional Federal Reserve reported Thursday.

The Philadelphia Fed's manufacturing index jumped to 47.4, up 6 points from July and well ahead of the Dow Jones consensus forecast for 25. This was the highest reading since April 2021. The index measures the percentage difference between companies reporting expansion against contraction.

The employment index surged to 27.9, up 18 points to its highest level since April 2022. At the same time, gauges for prices paid and received hit their lowest levels since February, just as the U.S. and Israel launched attacks on Iran that sent inflation higher.

Bitcoin's nearly 11% two-day rally on Thursday sent the cryptocurrency above $71,000, as the coin reached its highest levels since June 1.

The move higher came after President Donald Trump along with crypto executives and regulators at the White House made the case for passing the Clarity Act, a cryptocurrency market structure bill, through Congress on Wednesday.

Other coins also hit recent highs. Ether was at the highest levels since May 12, while Solana reached levels it hasn't traded at since May 16.

Here are some of the names making moves before the opening bell:

To read the full list of premarket movers, click here.

Walmart shares dropped more than 5% in premarket trading after the retail giant's U.S. comparable sales and third-quarter adjusted EPS guidance fell short of FactSet consensus.

For the second quarter, U.S. comparable sales rose 2.6%, below the gain of 3.5% that analysts polled by FactSet had expected. Walmart's third-quarter guidance for adjusted earnings per share was also between $0.62 and $0.64, while analysts had anticipated $0.68.

"Our business model is only getting stronger and more durable, and we're pleased to raise our guidance for the year," said John David Rainey, the company's chief financial officer.Â

For the third quarter, the company expects net sales to increase 3% to 3.75% and operating income to increase 2% to 4%.

Walmart's guidance for the fiscal year also fell below FactSet's earnings estimate, despite raising its own forecast. The company now expects adjusted EPS of $2.80 to $2.87, up from its previous guidance of $2.75 to $2.85. FactSet consensus was $2.90.

Walmart's second-quarter report also beat FactSet consensus on revenue.

Bond yields edged higher as investors digest the Treasury Department's plan to dramatically ramp up government debt repurchases in a bid to shore up longer-dated debt.

The yield on 30-year U.S. Treasurys — the primary focus of the accelerated buyback — was last seen up 2 basis points at 5.2224%.

Yields on 10-year U.S. Treasurys — the main benchmark for mortgages, auto loans and credit card debt — moved 1 basis point higher to 4.6723%. The yield on the 2-year Treasury note, which more closely follows short-term Federal Reserve rate decisions, was last seen holding steady at 4.1748%.

Oil prices rose after the U.S. President Donald Trump vowed "economic warfare" on Iran and financial penalties for its supporters, as the United Arab Emirates said it was suspending trade with Tehran.

Brent crude futures — the international price benchmark — were last seen up 2.19%, trading at $93.61 per barrel as of 4:46 a.m. ET. U.S. West Texas Intermediate futures for September delivery were more than 2% higher at $87.56 in morning trade.

Shares in Novonesis rose 8% in early trade after the Danish biotech firm raised its full-year guidance and announced a €1 billion share buyback program.Â

Novonesis said its organic revenue growth should come in at 7-8%, up from the previous 5-7%.Â

Revenue rose 10% to €1.116 billion, marginally beating analyst expectations of €1.019 billion.

Japan's Nikkei 225 closed 1.36% higher at 66,216.79, while South Korea's Kospi rose 5.89% to 6,852.58.

Both indexes were supported by gains in tech stocks. Samsung and SK Hynix, which are Kospi heavyweights, rose 9.49% and nearly 13%, respectively. Over in Japan, SoftBank Group and Rakuten each added over 3%.

Australia's benchmark S&P/ASX 200 gained 0.33% to 9,083.80.

Hong Kong's Hang Seng index was up 1.12% as of its last hour of trade on Thursday, while mainland China's CSI 300 closed 0.1% higher at 4,592.375.

European stocks opened marginally lower on Thursday as investor optimism on the continent remained muted.Â

Shortly after the opening bell, the pan-European Stoxx 600 index was seen trading just below the flatline, with regional bourses and sectors painting a mixed picture.

London's FTSE 100 shed 0.2% in early trade, while France's CAC 40 and Germany's DAX were flat.

Healthcare stocks led gains, rising 0.3%, while miners and travel and leisure stocks lagged the broader index, falling 0.9% and 0.6%, respectively.

Gold pulled back slightly on Thursday after investors took profits following a 4% gain in the previous session.Â

The surprise intervention in the U.S. Treasury market on Wednesday sent the dollar lower and sent gold soaring to its highest level in over two months.Â

Spot gold was last seen trading 0.65% lower at $4,491.75 per ounce, while gold futures were marginally higher at $4,551.80 per ounce.

Shares of SK Hynix surged over 12% in Seoul on Thursday, a day after the chipmaker announced plans for a massive stock buyback.

The company said it is accelerating its 40 trillion won ($28.7 billion) share repurchase and cancellation program, while pursuing a shareholder return expansion to over 50% of cumulative free cash flow generated between 2025 to 2027.

The news come after SK Hynix said earlier this month it would invest 54 trillion Korean won to build new memory chip manufacturing plants, amid growing demand for components which are crucial for artificial intelligence.

Asian technology stocks rose Thursday, recovering from losses the day before.

Market sentiment was supported by gains in U.S. stocks which snapped a three-day losing streak after yields on longer-dated U.S. Treasurys pulled back from multi-year highs.

In South Korea, SK Hynix surged nearly 12%, while Samsung Electronics gained 8.48%. Kakao was 4.55% higher.

In Japan, the SoftBank Group advanced 4.04%, while Nintendo was over 3% higher. Rakuten added 2.44%, and Japanese memory chipmaker Kioxia rose 5.29%.

Tech stocks have been seeing heightened volatility in recent sessions, with South Korea's semiconductor-heavy market whipsawing between steep losses and record gains.

Mainland China and Hong Kong shares rose Thursday, tracking gains in other Asian markets.

Hong Kong's Hang Seng index added 1.06%, while mainland China's CSI 300 rose 0.61%.

The gains in Hang Seng were led by basic materials and healthcare sectors, up 4.04% and 4.02%, respectively.

The Korea Exchange activated a buy-side sidecar on the Kospi, temporarily halting program trading, as South Korean stocks surged.Â

A sell-side sidecar is triggered when the Kospi 200 futures index gains 5% or more for at least one minute, stopping trading for 5 minutes.

Asia-Pacific markets opened higher Thursday.

Japan's Nikkei 225 added 0.66%, while the Topix rose 0.57%. The Kospi advanced 3.11%, while the small-cap Kosdaq added 2.26%. Australia's benchmark S&P/ASX 200 was 0.59% higher.

Asia-Pacific markets were set to open higher Thursday, tracking U.S. stocks that snapped a three-day losing run after yields on longer-dated U.S. Treasurys pulled back from multi-year highs.

Japan's Nikkei 225 was poised to rise, with the Chicago futures contract at 66,465 and its Osaka counterpart last trading at 66,130, compared with the index's previous close of 65,326.42.

Hong Kong Hang Seng index futures were last at 25,699, higher than the index's close of 25,495.07.

Futures for Australia's S&P/ASX 200 last traded at 9,034, while the index closed at 9,053.80.

Tensions in the Middle East continue to escalate after President Donald Trump announced an "Economic Warfare" on Iran and threatened "tremendous" consequences for its supporters.

Trump said earlier that no negotiations with Iran were planned, reversing course on claims regarding the status of talks with Tehran. Meanwhile, the UAE halted trade with Tehran, shortly after reporting two missiles were fired in its direction.

The flagship cryptocurrency continued its surge on Wednesday night.

Bitcoin was last up about 7%, surpassing the $69,000 level.

Cryptocurrencies surged earlier in Wednesday's trading as investors assumed a risk-on posture after the Treasury Department announced its bond buyback program and Treasury yields retreated.

In extended trading, crypto trading platform Coinbase was last up 3%, while Robinhood gained more than 2%.

Government debt has eclipsed $40 trillion, passing yet another staggering benchmark for red ink, according to the Treasury Department.

The total U.S. IOU hit $40.05 trillion as of Tuesday, some four and a half years after topping $30 trillion. Years of escalating budget deficits, pushed higher by stimulus funding during the Covid pandemic, have seen the public share of the debt near 100%.

Nordson, which manufactures equipment used to apply coatings and adhesives, rose after lifting its full-year guidance.

Nordson sees adjusted earnings for the full year in a range of $11.80 to $12 a share, up from its earlier call for $11.30 to $11.80 per share. The outlook also surpassed the FactSet consensus call for $11.60 a share.

The stock was the top gainer in the S&P 500 futures in after-hours trading.

U.S. stock futures opened slightly higher on Wednesday evening.

S&P 500 futures rose 0.1%, while Nasdaq 100 futures gained 0.3%. Futures tied to the Dow Industrials added 25 points, or 0.04%.