Success. Promising news from a major drug company, reports of some dovish Fed committee members, and a government bond buyback announcement combined forces to boost markets on Wednesday.

The Dow Jones Industrial Average ended the day up 119.65 points, or 0.2%. The S&P 500 and the Nasdaq Composite also closed up 0.2%.

Moderna was a standout today. The pharma company became only the second stock to gain more than 100% in a single trading day in the last 25 years after it announced positive interim results from a phase 3 trial of a cancer vaccine.

The Treasury Department’s announcement this morning also helped calm the bond market—though for how long remains to be seen after the U.S. debt crossed a $40 trillion threshold on Wednesday. The agency said that it would double its government debt repurchases, targeting longer-dated securities after the 30-year Treasury recently hit its highest yield since 2007.

The move, which triggered a sharp decline in bond yields even as stocks moved higher, is set to take effect on Sept. 9. My colleague Karishma Vanjani broke down all the details on the latest Treasury moves in her latest reporting here.

The latest minutes from the July Federal Open Market Committee, though a bit stale, showed that “many” policymakers believed that tightening policy would “likely be necessary” if inflation doesn’t decline. But my colleague Josh Schafer noted that only “some” felt that the current rate policy was not “sufficiently restrictive” to achieve the Fed’s 2% inflation goal. That helped power indexes higher.

Wednesday’s FOMC minutes release also confirmed that Chairman Warsh asked officials for input around the idea of only having six policy meetings each year. Currently, the FOMC meets eight times a year.

No decisions regarding possible changes in the meeting schedule have been made, and the minutes noted that any changes would not affect the schedule for the rest of 2026.

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The Hot Stock: Moderna +177.0%
The Biggest Loser: Steel Dynamics -7.5%

Best Sector: Healthcare +3.5%
Worst Sector: Industrials -0.9%

Productivity growth helped offset the inflationary impact of higher tariffs last year, but efficiency gains alone were not enough to fully tamp down price growth.

Following President Donald Trump’s announcement of major tariff increases in 2025, economists expected a significant pickup in inflation. Price growth did accelerate, but the impact of tariffs was less pronounced than some had feared. Many cited the massive amount of orders that companies made ahead of the implementation of tariffs as the factor that helped keep the pass-through duties rate lower.

That certainly helped, but one of the biggest mitigating influences was the fact that industries most affected by the higher tariffs experienced significantly higher labor productivity growth last year, according to new research published Wednesday by the Federal Reserve Bank of Boston.

Boston Fed researchers calculated that tariffs added 1.4 percentage points to core inflation, as measured by the personal consumption expenditures (PCE) price index, during the fourth quarter of last year. Wage growth added another 1.9 percentage points. Labor productivity, however, offset those gains by 0.9 percentage points from inflation, according to the research. That adds up to an inflation rate of just 2.4%.

But core PCE inflation still measured 3% in the 12 months through December 2025. That indicates while productivity gains offset much of the tariff pressure, other forces were also pushing prices higher.

Those underlying inflationary pressures outside of tariffs are still playing out, especially as the impact of higher duties has faded this year after the Supreme Court struck down part of the administration’s levies. It’s likely a combination of sticky services inflation, along with factors like increased demand for components related to the AI buildout.

But it’s certainly creating headwinds for Fed officials as they try and determine if they will need to intervene to restore price stability.

Alibaba Group Holding, Deere, NetEase, Ross Stores, and Walmart announce quarterly results tomorrow.

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• Biotech Stocks Are Booming. What This Top Fund Is Buying Now.

• 5 Stocks in Big Food’s Bargain Bin

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