US stocks opened higher on Thursday, with the Nasdaq Composite leading gains as chip and consulting stocks rallied, though surging Treasury yields continued to cast a shadow over the market. The Nasdaq rose 0.45%, or 125 points, while the S&P 500 added 0.23% and the Dow Jones Industrial Average gained 0.38%.
Investors continued to favor artificial intelligence-related names at the start of October, extending a trend that saw the Nasdaq outperform in September. The tech-heavy index climbed 1.9% last month, while the S&P 500 fell 0.5% and the Dow declined 4.3%. For the third quarter, the S&P 500 and Nasdaq each gained about 2%, while the Dow slipped 2.7%.
Chip and consulting stocks lead gains
Micron Technology's stronger-than-expected revenue forecast and $32 billion in customer commitments under supply agreements reinforced confidence in AI-driven demand. Despite the upbeat results, Micron shares slipped about 1.7% in trading, following a near quadrupling in its stock price this year. The company reported that revenue quadrupled in the latest quarter, with profit margins reaching 87%.
Other chip stocks advanced, with Nvidia up 0.47% and Lam Research rising 2.03%. AMD and Broadcom also moved higher. Alphabet added 1.49% after unveiling its Gemini 4 flagship AI model, adding to the positive momentum in technology stocks.
Consulting firms also saw sharp gains. Accenture jumped 22% after forecasting full-year revenue growth above estimates. Cognizant climbed 11%, while IBM gained 6.3%.
Elsewhere, Constellation Energy rose 5% after signing a 20-year power purchase agreement with Amazon. Rocket Lab gained 1.4% after securing its largest-ever Electron commercial launch agreement, covering 20 launches with Synspective.
Treasury yields hit multidecade highs
Despite the equity gains, Treasury yields climbed to levels not seen in more than two decades. The 10-year Treasury yield reached 5.342%, its highest level since 2002, while the 30-year yield stood at 5.68%. The 10-year yield also moved above its June 2007 high of 5.328%.
Rising energy costs, heavy government borrowing, and continued investment in AI infrastructure have contributed to expectations that interest rates could remain elevated. WTI crude rose 0.39% to $90.76 a barrel as markets monitored developments in the Iran conflict.
Softer-than-expected inflation data on Wednesday reduced expectations for an interest-rate increase later in October. Traders were pricing in a 63% probability that the Federal Reserve would keep rates unchanged, although a December hike remained possible with inflation still above the central bank's 2% target.
Weekly jobless claims fell, while layoffs also declined in September, pointing to continued stability in the labor market.
This article is for informational purposes only and does not constitute financial advice.
