Dow, S&P 500, and Nasdaq open lower as bond market shrugs off Bessent’s buyback boost

US stock markets opened lower on August 20 as a brief reprieve in the bond market evaporated overnight, dragging equity indices back into the red. The Dow Jones Industrial Average, S&P 500, and Nasdaq all declined at the open, reversing gains from the previous session that had been fueled by Treasury Secretary Scott Bessent’s announcement of expanded buyback operations. What happened with the buybacks On August 19, the Treasury Department announced it would at least double the size of its liquidity-support buyback operations for longer-dated nominal coupon securities. The cap on each operation rises from $2 billion to a minimum of $4 billion, effective from September 9 through November 4, 2026. Bessent framed the move as providing “greater liquidity support” in longer-dated sectors of the Treasury market. The initial market reaction was exactly what you’d want if you were the Treasury Secretary: the 30-year yield dropped over 10 basis points to around 5.184%, pulling back from a 19-year high above 5.33%. Stocks responded in kind on August 19. The S&P 500 closed up 0.21% at 7,707.98, while the Dow added 119.65 points. By the morning of August 20, Treasury yields had begun cl...