Dow futures rise as US Treasury buyback relief emerges

The US Treasury unexpectedly announced a significant expansion of its Treasury buyback program on Wednesday, injecting a much-needed boost into recently pressured financial markets. Following the news, long-term US Treasury yields pulled back, the dollar index fell to a two-and-a-half-month low, and all three major US stock indices rebounded after multiple days of declines.

**Bond market pressure eases, stock market sentiment recovers**

According to market sources, the US Treasury doubled the maximum size of its liquidity-support buyback operations, raising the per-operation purchase amount for longer-dated nominal securities from $20 billion to at least $40 billion, with the new measures taking effect on September 9. This rare intervention directly pushed down surging Treasury yields, with the 30-year yield dropping about 8 basis points. Prior to this, the yield had climbed to its highest level since 2007, reflecting deep market concerns over the soaring federal debt, geopolitical risks, and persistently high inflation. TD Securities analysts noted that the Treasury's buyback action injected much-needed liquidity into the market, alleviating the spillover effect of the bond selloff on risk assets.

**Geopolitical risks persist, oil prices and tech stocks remain under pressure**

Despite the bond-market tailwind driving a rebound, market sentiment has not fully turned optimistic. The ongoing standoff between the US and Iran keeps Middle East supply risks elevated, and crude oil prices remain firm, which to some extent caps the upside for equities. During regular trading on Wednesday, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite rose 0.22%, 0.22%, and 0.16%, closing at 53,463, 7,708, and 26,331 points, respectively. However, during the European session on Thursday, markets turned cautious again, with Dow futures slipping 0.11% to around 53,470 and S&P 500 futures edging down 0.06% to near 7,720, as investors continued to assess the lingering impact of oil price pressures and the tech selloff.

**Dollar weakens, gold surges**

Another direct consequence of the Treasury buyback program was a notable weakening of the dollar. The dollar index slumped, providing broad support for dollar-denominated assets. Gold prices surged more than 3.6% on the back of lower yields and a softer dollar, approaching the $4,500 level, reflecting an interplay of safe-haven demand and expectations of monetary easing.