CNBC Daily Open: Treasury attempts to rein in bond yields as U.S. debt swells past $40 trillion

Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC's Daily Open.

The U.S. Treasury Department can no longer tolerate elevated borrowing costs, and has decided to double its purchases of longer-dated bonds, depressing yields while pulling stocks higher.

But with the national debt now above $40 trillion, the government may have only bought time. Inflation, the Iran war, alongside the massive debt continue to hang over the world's largest economy.

The U.S. Treasury Department is looking to upscale its buyback operations for securities maturing in 10 to 30 years, "at least" doubling the amount from $2 billion to at least $4 billion per operation over the next two months.

Bond prices rose following the announcement, pushing yields lower. The 30-year Treasury yield dropped roughly 9 basis points to around 5.19%, its biggest one-day decline since October 2025. The benchmark 10-year yield fell to about 4.64%.

The move helped snap a three-day losing streak for stocks, with all three major U.S. indexes rising about 0.2%. Stocks and bond yields generally move in opposite directions.

The debt buyback also pushed up cryptocurrencies, with bitcoin gaining more than 7% while ether rose over 18%. Cryptocurrencies is seen as a risk asset, and usually gains when Treasury yields fall.

The U.S. gross national debt has surpassed $40 trillion for the first time, four-and-a-half years after topping $30 trillion. 

The government deficit so far this year has swelled to $1.8 trillion. In the most recent monthly accounting of U.S. finances, Treasury reported a $432.3 billion deficit in July, the highest monthly total since March 2021.

Years of escalating budget deficits, pushed higher by stimulus funding during the Covid pandemic, have seen the public share of the debt near 100%.

But the size of the debt is not the only thing that is worrying. Interest on the debt has totaled nearly $1.2 trillion this year and is the largest budget expenditure outside of Social Security and Medicare.

That may explain why Trump is unhappy with the cost of borrowing. The president renewed his criticism of the Federal Reserve Wednesday, arguing that interest rates are "artificially high" and that the world's largest economy should pay much less on its debt.

"I see countries like Switzerland where they're the number one lowest interest rates, a half a percent, and we pay three and a half percent," he said. "I have the absolute right to cut off all business with a country like Switzerland."

Trump also said the U.S. will launch economic warfare against Iran, what he called the "most crushing economic operation ever taken against any country," threatening severe financial penalties on any nation that helps Tehran evade sanctions.

In a Truth Social post, Trump said Iran's navy, air force, and military production facilities have been destroyed and its currency rendered "worthless," arguing the regime was "hanging by a thread."

The president named oil smuggling, currency swap lines, cash transfers, exchange houses, ship registries and front companies as channels he wants shut down immediately, reiterating that Iran will never be permitted to acquire a nuclear weapon.

Shares of pharma giants Moderna and Merck jumped 177% and over 12%, respectively, after the firms reported encouraging initial results from a late-stage trial of their experimental personalized cancer vaccine.

When used with Merck's blockbuster immunotherapy Keytruda, the vaccine significantly extended the time patients remained free from melanoma recurrence or its spread to other parts of the body, compared with Keytruda alone.

The Phase 3 study will continue to assess other outcomes, including the overall survival benefit of the regimen. The drugmakers plan to present the data at an upcoming international medical meeting, but it's unclear when they plan to submit applications for approval in the U.S. 

— Lim Hui Jie

Nvidia plays matchmaker in Nordics, sources tell CNBC, as AI data center deals boom in region

Nvidia is playing matchmaker, trying to connect companies with its graphics processing units to data-center operators that have the capacity to deploy them in the Nordics, sources have told CNBC.

While Nvidia has established an effective monopoly over the most powerful AI chips, it has worked to exert greater influence across the AI ecosystem as the race to build infrastructure accelerates.

The chip giant has also sought a role in AI infrastructure deals. Two sources familiar with the matter have told CNBC that Nvidia has offered to introduce companies with data centers in the Nordics, an increasingly sought-after AI infrastructure region, to firms with its GPUs that are in the market for capacity.

—Kai Nicol-Schwarz