The Nasdaq Composite surged to a fresh all-time high on Monday, powered by gains in technology and artificial intelligence-related stocks, even as U.S. Treasury yields climbed to multi-year highs. The index advanced 1.05% to an intraday record of 27,544.07, while the S&P 500 rose approximately 0.7%. The Dow Jones Industrial Average added about 90 points, or nearly 0.2%.
AI Stocks Lead the Charge
Stocks tied to the artificial intelligence trade were the primary drivers of the rally. SpaceX jumped nearly 6%, while Meta and Microsoft gained more than 2% and 1%, respectively. Nvidia rose over 1%, and Tesla advanced 2%. This strength came despite the 10-year Treasury yield rising more than nine basis points to 5.349%, and the 30-year yield climbing about seven basis points to 5.703%.
The yield increases reflect investor concerns that persistent inflation could keep the Federal Reserve's interest rates elevated for an extended period. However, technology stocks continued to attract capital, underscoring the market's focus on growth prospects in the AI sector.
Economic Data and Fed Minutes in Focus
Investors also digested the Institute for Supply Management's services-sector report, which showed the services Purchasing Managers' Index rose to 54.9 in September, broadly in line with expectations but slightly below the prior month's reading. Attention now turns to the minutes from the Federal Reserve's September meeting, which could offer insights into the central bank's decision to raise interest rates by 25 basis points last month.
Lower oil prices provided additional support to market sentiment. Brent crude futures fell more than 1.9% to $100.30 a barrel, while West Texas Intermediate crude declined about 2% to $89.29. The drop came as investors weighed improved Middle Eastern crude exports and commitments from the Group of Seven to increase supplies.
The moves follow a week marked by rising Treasury yields and weaker-than-expected U.S. employment data. The September jobs report showed slower job growth than anticipated, reducing market expectations for another Fed rate hike in October. According to CME's FedWatch tool, traders were pricing in a 24% probability of an October increase, down from 70% a week earlier.
Earnings Season Ahead
With the third-quarter earnings season set to begin next week, starting with major U.S. banks, investors are positioning for what could be a strong reporting period. LSEG data indicates that analysts expect S&P 500 earnings to increase more than 30% year over year, driven largely by AI-related companies.
The Nasdaq's previous record closing high was set on September 22. In other corporate news, PTC surged after Schneider Electric agreed to acquire the software company in a $22.6 billion all-cash transaction. RXO also advanced following C.H. Robinson Worldwide's agreement to buy the transportation broker in a $5.8 billion stock-and-cash deal. Cerebras Systems gained after OpenAI CEO Sam Altman described the chip designer as a close partner, with extensive work underway focused on improving speed.
This article is for informational purposes only and does not constitute financial advice.
