Dow Jones Jumps 549 Points As Treasury Yields Tumble, But Now What?

Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures, while Treasury yields moved higher. The major indexes rebounded strongly Wednesday while Treasury yields tumbled from 12-year highs as the Bank of England resumed bond buying.

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Biogen (BIIB) and Japanese partner Eisai reported their Alzheimer’s drug reduced cognitive decline in a late-stage trial. BIIB stock skyrocketed 40%.

Eli Lilly (LLY) gapped up to a buy point on the Biogen news. Lilly is working on a similar Alzheimer’s treatment.

Vertex Pharmaceuticals (VRTX) made a bullish move, along with Regeneron Pharmaceuticals (REGN). So did drug distributor Cardinal Health (CAH). DoubleVerify (DV), Cheniere Energy (LNG) and Albemarle (ALB) are showing positive action.

Apple (AAPL) sold off Wednesday morning on report that it’s reining in iPhone production. But AAPL stock closed well off session lows. Apple iPhone chipmakers mostly recovered to little changed.

VRTX stock and DoubleVerify are on IBD Leaderboard. Vertex, Albemarle and DV stock are on the IBD 50. Vertex and ALB stock are on the IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures fell 0.25% vs. fair value. S&P 500 futures dipped 0.3% and Nasdaq 100 futures declined 0.4%.

The 10-year Treasury yield rose 4 basis points to 3.75%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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Stock Market Wednesday

The stock market opened mixed but soon picked up momentum, finally having a clearly positive session.

The Bank of England announced early Wednesday that it would buy long-term British bonds, a big policy reversed. Gilt yields had soared in recent days while the pound had plunged as new U.K. Prime Minister Liz Truss announced plans for a big increase in borrowing.

The 10-year Treasury yield, which had just topped 4% overnight, fell sharply on the BoE move. That, in turn, fueled a long-await stock market bounce.

The Dow Jones Industrial Average rose 1.9% in Wednesday’s stock market trading. The S&P 500 index popped nearly 2%. The Nasdaq composite jumped just over 2%. The small-cap Russell 2000 leapt 3.2%.

Apple reportedly is reining in iPhone production plans, as an expected demand boost apparently hasn’t materialized. The Dow tech titan told suppliers that it aims to make 90 million handsets, flat vs. the prior year. Apple stock ultimately closed down 1.3% to 149.84 after skidding to 144.84 intraday.

The 10-year Treasury yield tumbled 26 basis points to 3.71%. In overnight trading, the 10-year Treasury yield briefly hit a 12-year high of 4.005% before the BoE bond-buying plan.

The dollar fell solidly Wednesday, but just gave a portion of its big gains in the past several days. The greenback has surged over the past year.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) leapt 3.7%. The…