Stocks dip, then recover on Treasury bond drama

Thirty-year Treasury yields hit their highest level since 2007 this week, prompting Treasury Secretary Scott Bessent to double bond buybacks from $2 billion to $4 billion starting next month. The move briefly calmed markets before yields climbed again Thursday, and stocks closed the week down across the board — the Dow lost 454 points, the S&P 500 fell 111, and the Nasdaq dropped 549.

Economists warn the buyback strategy could pressure the Federal Reserve toward tightening, with all eyes on Fed Chair Kevin Warsh's upcoming Jackson Hole speech. Fed minutes released this week flagged inflation risks skewed to the upside, partly blamed on AI data center price increases, even as the Fed held rates steady at 3.5% to 3.75% on a 9-3 vote.

Oil prices rose for a second week as U.S.-Iran talks stalled and Bessent threatened what he called the toughest sanctions in history against Iran, with Brent crude near $94 a barrel. Manufacturing data ticked up too, though analysts attribute much of that bounce to AI-linked spending and war-driven inventory restocking rather than underlying strength.

The full dispatch is available from the source below.