Nasdaq Hits Record High as Megacap Stocks Offset Rising Treasury Yields

The Nasdaq Composite reached a new all-time high on Monday, as gains in megacap growth stocks countered pressure from elevated Treasury yields. The S&P 500 also advanced, while the Dow Jones Industrial Average fell slightly. The Nasdaq climbed 0.70% to 27,380.34, with technology heavyweights like Nvidia, Meta Platforms, Microsoft, and Tesla leading early gains.

Seven of the 11 S&P 500 sectors saw advances, with communication services and utilities leading the way. Software stocks outperformed, pushing the S&P 500 software and services index up by 1.4%. However, chip stocks lagged, with the Philadelphia Semiconductor Index slipping 0.3%. PTC was the standout gainer, surging 34.6% after Schneider Electric agreed to acquire it for $22.6 billion in an all-cash deal.

Analysts from Goldman Sachs expect most companies to surpass consensus earnings estimates this quarter, projecting a 9% year-on-year earnings growth for the median S&P 500 company. Peter Andersen of Andersen Capital Management noted that despite higher yields, the market still has momentum to push through further interest rate increases. Risk appetite remained restrained as the benchmark 10-year US Treasury yield stood at 5.296%.

The Nasdaq’s record followed last week’s gains after weaker-than-expected employment data reduced expectations of an October interest-rate increase. Traders now see an 80% chance the Federal Reserve will leave rates unchanged this month, though a December increase remains likely. Brent crude futures hovered near $100 per barrel amid concerns about Gulf oil infrastructure disruptions.