The buyback lasted a day, and the Dow dropped 600 points

Good morning. US stocks fell sharply yesterday, with the Dow dropping 600 points, or more than 1%. Even though the Treasury had expanded its bond buybacks the day before, Treasuries were sold again within a day, and yields on some maturities climbed to their highest in 19 years.

Why did the Treasury's fix fall flat? The extra buyback amounts to just 0.15% of the debt the government plans to issue over the next two quarters, which one analyst compared to pouring a cup of water into the sea. Treasury Secretary Bessent called one-day moves noise and said he has plenty of tools left, but the market is not convinced. The root cause of rising yields, the 40 trillion dollars of debt, has not gone away.

There was more bad news. Walmart's quarterly sales missed expectations and its shares tumbled, reviving fears that spending is cooling. President Trump also declared an unprecedented economic campaign against Iran, which pushed oil higher. High rates, expensive oil and a slowing consumer all weighed on the market at once.

The economic data itself was fine, though. Weekly jobless claims stayed near 206,000, suggesting almost no layoffs, and a Philadelphia-area manufacturing gauge kept expanding. Today the question is whether Bessent steps in again, and where nerves head ahead of next week's Nvidia earnings and the Jackson Hole speeches.