US stocks: Nasdaq hits record as megacap gains offset elevated Treasury yields

The S&P 500 advanced and the Nasdaq Composite touched an all-time high on Monday as gains in megacap growth stocks outweighed pressure from Treasury yields hovering near multi-year highs, Reuters reported.

The Dow Jones Industrial Average fell 32.46 points, or 0.06%, to 51,144.50. The S&P 500 gained 35.44 points, or 0.46%, to 7,758.16, while the Nasdaq Composite climbed 189.48 points, or 0.70%, to 27,380.34.

Technology heavyweights led early gains. Nvidia rose 1.1% and traded near the record high reached in the previous session, while Meta Platforms, Microsoft and Tesla gained more than 1% each.

Seven of the 11 S&P 500 sectors advanced, led by communication services and utilities. Software stocks outperformed, pushing the S&P 500 software and services index 1.4% higher.

Chip stocks lagged, with the Philadelphia Semiconductor Index slipping 0.3%.

PTC was the S&P 500’s biggest gainer, surging 34.6% after France’s Schneider Electric agreed to acquire the software company in a $22.6 billion all-cash deal.

Expectations of robust corporate earnings have helped US equities outperform global peers over the past six months despite geopolitical uncertainty and persistent inflation concerns.

Goldman Sachs analysts expect most companies will “once again surpass consensus earnings estimates this quarter,” projecting 9% year-on-year earnings growth for the median S&P 500 company.

“Many investors expect higher yields to derail the equity rally, but I think the market still has enough momentum to push through further increases in interest rates,” Peter Andersen, founder of Andersen Capital Management, told Reuters.

Risk appetite remained restrained as government bond yields stayed close to recent highs. The benchmark 10-year US Treasury yield stood at 5.296% amid concerns about deteriorating public finances, heavy debt issuance and elevated energy costs.

Global bond markets also remained in focus as investors assessed France’s debt burden and political uncertainty ahead of next year’s presidential election.

The Nasdaq’s latest record followed gains last week after weaker-than-expected employment data reduced expectations of an October interest-rate increase. Data released on Monday showed that US services activity slowed in September.

Traders now see an 80% chance that the Federal Reserve will leave interest rates unchanged this month, although a December increase remains largely priced in, according to the CME FedWatch Tool.

Brent crude futures hovered near the psychologically important $ 100 per barrel level as concerns about disruptions to Gulf oil infrastructure persisted amid the Middle East conflict.

Among individual stocks, RXO jumped 22.5% after freight-forwarding company C.H. Robinson Worldwide agreed to acquire the transportation broker in a $5.8 billion stock-and-cash deal. C.H. Robinson shares fell 11.8%.

Cerebras Systems gained 9.5% after OpenAI CEO Sam Altman called the chip designer a “close partner” and said the companies have “deep engagement pushing on the frontiers of speed.”

Advancing issues outnumbered decliners by a ratio of 1.04 to 1 on the NYSE and 1.09 to 1 on the Nasdaq.

The S&P 500 recorded three new 52-week highs and 18 new lows, while the Nasdaq Composite posted 23 new highs and 157 new lows.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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