Nvidia, Microsoft and Meta carried the Composite above its September peak while real estate fell and more Nasdaq stocks declined than advanced.
Equity Markets · FinancialMarkets.com · · Tickers: QQQ, NVDA, MSFT, META, TSLA, XLRE, RSP
Two records were set on Monday, one in stocks and one in bond yields. They would usually be expected to work against each other.
The Nasdaq Composite rose to an intraday high of 27,478.17, about 1.3% above its record close of 27,122.09, and traded near 27,451 at about 2 p.m. Eastern, up roughly 1%. At the same time, the 10-year Treasury yield reached 5.349%, its highest level since 2002.
The S&P 500 rose about 0.7% to near 7,776, within about 0.3% of its record close of 7,798.99. The Dow Jones Industrial Average, 314 points lower at its worst in the morning, turned positive and was up about 0.25%. The Cboe Volatility Index held near 15.6.
Who carried it
The gains came from the largest technology companies. Nvidia rose about 2% to near $238.60 and Meta Platforms about 2%. Microsoft added about 1.6% and Tesla about 2%. SpaceX gained about 5.5% after Morgan Stanley called the stock "cheap and getting cheaper."
Early in the session, only technology and communication services were rising among the S&P 500's 11 sectors, and communication services was being lifted by Alphabet and Meta. Gains broadened through the day to 10 of 11 sectors. Real estate, which tends to trade inversely to bond yields, was the lone decliner.
Breadth
Count stocks instead of weighting them by size and the picture flips. By the afternoon, 281 Nasdaq-listed names had set 52-week lows and only 87 had set highs, a ratio of more than 3 to 1, and 2,167 issues were down against 1,960 up.
Lows have now beaten highs for 26 sessions in a row. The last run that long, 43 sessions, ended on , but it came with the index about 19% under its peak. This one is unfolding with the index at a record, a combination that leaves the gains resting on a narrow group.
Why tech can ignore yields
Higher long-term yields normally weigh most on growth stocks, since more of their value lies in earnings far in the future. Some investors argue the largest technology companies are an exception. "It's buy tech, sell everything else," said Jay Hatfield, chief executive of Infrastructure Capital Advisors, who described the sector as having low sensitivity to interest rates because demand for computing power is so strong.
What could change it
This week's $119 billion of Treasury auctions, and whether the 10-year keeps climbing, are the near-term test for the leaders. The streak of new lows beating new highs is the measure of breadth. A break in that streak while the Nasdaq holds its high would show the rally spreading. A longer streak would show it narrowing further.