S&P 500 and Nasdaq Hit New Highs as Tech Stocks Lead Gains
The S&P 500 climbed higher and the Nasdaq reached new all-time highs on Monday, driven by gains in megacap and growth stocks. Tech giants like Nvidia, Meta Platforms, Microsoft, and Tesla led the charge, with Nvidia rising 1.1% and others adding over 1%. Seven of the 11 S&P 500 sectors saw gains, with communication services and utilities leading the way. Chip stocks, however, struggled early, with the Philadelphia chips index down 0.3%, while software companies surged, pushing the S&P 500 software & services index up by 1.4%. PTC was the standout performer, soaring 34.6% after Schneider Electric agreed to acquire it for $22.6 billion.
By 10:19 a.m. ET, the Dow Jones Industrial Average had fallen 66.35 points, or 0.13%, to 51,110.61, while the S&P 500 gained 30.33 points, or 0.39%, to 7,753.05, and the Nasdaq Composite added 167.85 points, or 0.62%, to 27,360.28. The market's optimism was fueled by strong corporate earnings, which have helped U.S. stocks outperform global peers over the past six months despite geopolitical tensions and inflation concerns. Goldman Sachs analysts predict that most companies will exceed earnings estimates this quarter, with a 9% year-on-year earnings growth for the median S&P 500 stock.
Despite the positive sentiment, risk appetite remained cautious as Treasury yields hovered near multi-year highs. The 10-year U.S. Treasury yield stood at 5.296%, reflecting concerns over government debt and elevated energy costs. Global bond markets also faced scrutiny due to France’s rising debt burden and political uncertainty ahead of next year’s presidential election. The Nasdaq’s record high followed last week’s market rally, triggered by softer-than-expected jobs data that reduced the likelihood of an October interest rate hike. Fresh data on Monday showed a slowdown in U.S. services sector activity in September.
Traders now see an 80% chance of the Federal Reserve holding interest rates steady this month, though a December rate hike remains likely. Brent crude futures remained near $100 a barrel amid ongoing concerns over Gulf oil infrastructure disruptions due to the US-Israel war. Among other movers, RXO jumped 22.5% after C.H. Robinson Worldwide agreed to acquire it for $5.8 billion, while C.H. Robinson fell 11.8%. Cerebras Systems rose 9.5% after OpenAI CEO Sam Altman highlighted its role as a close partner. Advancing issues outnumbered decliners by a 1.04-to-1 ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.