Stocks, Bonds Fall on Doubts Over Treasury’s Plan: Markets Wrap

(Bloomberg) — A rally in bonds fizzled out and stocks fell on bets the Treasury’s plan to curb borrowing costs is just a short-term fix, with higher energy prices stoking worries about inflation.

Thirty-year yields climbed even as Treasury Secretary Scott Bessent flagged a bigger buyback potential and an upcoming fiscal plan. The S&P 500 extended this week’s drop, with Walmart Inc. sinking 9% on disappointing sales. Oil rose to $88 as President Donald Trump’s threat to crush the Iranian economy clouded peace prospects. Bitcoin topped $72,000.

The Treasury chief played down Thursday’s market moves, saying “anything that happens within a 24-hour period is noise.” And he highlighted that the expanded buyback operations “could be more than the $4 billion” size currently planned to start next month.

“We are announcing probably at the end of this week, beginning of next week, an increased focus on fiscal consolidation,” Bessent told CNBC.

The latest action on Wall Street follows a series of Treasury decisions that have signaled growing concern about rising long-term yields. Lofty government financing costs are feeding through to the broader economy, after years of elevated inflation and government spending.

At JPMorgan Chase & Co., Jay Barry says the latest Treasury maneuver only addressed the symptoms and not the root cause: the US runs a 6% deficit in an economy near full employment.

“Absent real fiscal consolidation, we fear the markets will view this action as lacking credibility,” he noted.

The Treasury’s intervention is evidence policymakers are uncomfortable with the pace of the recent rise in yields, but it does not fundamentally alter the outlook for rates, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.

“Our base case remains that the Fed is unlikely to raise rates this year if inflation continues to moderate, although policymakers have retained the option to tighten should price pressures prove more persistent than expected,” she added.

Federal Reserve Bank of San Francisco President Mary Daly suggested the Treasury market is signaling that monetary policy is in a good place right now.

“There’s a lot of discussion about our credibility there. I don’t see our credibility at risk,” Daly told Bloomberg Television. “I also hear a lot about, should we be making preemptive cuts — or hikes, rather? And I don’t see a lot of evidence that that’s an urgent problem to solve.”

Corporate Highlights:

Anthropic PBC plans to allow business customers to keep greater control of their data when using its most capable artificial intelligence models, a stark change from an earlier data retention policy intended to mitigate potential cyberattacks. Boeing Co. is making “steady progress” replacing cracked metal structures inside its two Air Force One presidential jets, a major retrofit that must be finished before targeted delivery in mid-2028, the US Air Force said. Super Micro Computer Inc. completed an independent probe into the alleged smuggling of Nvidia Corp. chips into China, with the investigation team concluding the company’s current senior management had no knowledge of the purported scheme. Deere & Co. jumped after the tractor maker said it’s seeing a boost in orders for its machinery, raising hopes that the agriculture sector is poised for recovery. Coty Inc. reported a drop in comparable sales and forecast a “transition” period in the current fiscal year as the beauty conglomerate works to turn around its business. Some of the main moves in markets:

Stocks

The S&P 500 fell 0.5% as of 2 p.m. New York time The Nasdaq 100 fell 0.7% The Dow Jones Industrial Average fell 1% The MSCI World Index fell 0.4% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1674 The British pound rose 0.2% to $1.3627 The Japanese yen fell 0.6% to 159.07 per dollar Cryptocurrencies

Bitcoin rose 5.5% to $72,867.91 Ether rose 5.9% to $2,348.2 Bonds

The yield on 10-year Treasuries advanced five basis points to 4.70% Germany’s 10-year yield was little changed at 3.26% Britain’s 10-year yield advanced two basis points to 5.07% The yield on 30-year Treasuries advanced five basis points to 5.24% Commodities

West Texas Intermediate crude rose 2.6% to $88.07 a barrel Spot gold rose 0.1% to $4,520.22 an ounce ©2026 Bloomberg L.P.