Market Wrap | Federal Reserve's $2 Trillion Treasury Purchase Plan Shakes Markets

On August 15, 2025, the Federal Reserve's potential adjustment in its Treasury holdings structure could lead to the purchase of nearly $2 trillion in Treasury bills over the next two years, absorbing almost all of the Treasury's issuance during this period. Additionally, the unexpected increase in July's PPI growth rate has diminished expectations for a 50 basis point rate cut by the Federal Reserve in September, resulting in an increase in U.S. Treasury yields. Meanwhile, the U.S. stock market saw mixed performance, with the S&P 500 index falling 0.29%, the Dow Jones Industrial Average rising 0.08%, and the Nasdaq Composite index dropping 0.40%.

The S&P sectors showed mixed performance today. The utilities, technology, industrials, and financial sectors underperformed the broader market. Conversely, the healthcare, consumer staples, energy, communication services, and real estate sectors bucked the trend and posted gains.

Salesforce shares rose by 3.89% today, driven by strategic partnerships that have bolstered market confidence. Meanwhile, UnitedHealth Group saw a significant surge of 11.98% after Warren Buffett's Berkshire Hathaway disclosed a substantial stake in the company, which has boosted investor sentiment.

Today, the U.S. stock market saw significant movements across several companies. Perfect Moment surged by 91.56%, driven by the successful launch of new revenue streams and robust e-commerce performance. SRx Health Solutions saw an 84.64% rise, benefiting shareholders as the company canceled 18.8 million shares, reducing the total share count by 60%. Cuprina Holdings experienced an 87.34% decline during regular trading hours. Fly-E Group Inc's stock price decreased by 87.11% on the last trading day, with increased trading volume amidst falling prices, indicating elevated risk.

The potential restructuring of the Federal Reserve's portfolio could lead to the purchase of nearly $2 trillion in Treasury securities over the next two years, aligning with the Treasury's issuance. This move aims to mitigate interest rate risks and provide financial relief to the Treasury. Meanwhile, expectations for a September rate cut have diminished following a surprising PPI growth, which has also pushed U.S. Treasury yields higher. Additionally, the Saudi Public Investment Fund has exited positions in major U.S. companies like Meta and Alibaba in Q2, amidst U.S. stock market volatility. Lastly, Meta Platforms is reportedly planning another restructuring of its AI business into four separate units, which could impact its operational focus and market performance.