The Nasdaq closed at a record high on Monday (local time). Nvidia, whose market capitalization topped $5.76 trillion, lifted the index, while tech stocks broadly gained, with Microsoft rising 1.5%. The likelihood of another Federal Reserve rate hike in October fell sharply, bolstering appetite for risk assets.
Key points
The Nasdaq Composite closed up 1.1% at 27,477.31, reaching a record high for the first time since September 22.
Nvidia rose 2.1%, bringing its market capitalization to $5.76 trillion, while Microsoft climbed 1.5%, helping drive the indexes higher.
Federal funds futures reflect roughly a 20–24% chance of an interest rate hike in October, down sharply from around 70% a week ago.
Nvidia carries Nasdaq to an all-time high
The Nasdaq Composite closed up 1.1% at 27,477.31. Extending its strong gains for a second straight day, it surpassed the closing high set on September 22.
The S&P 500 rose 0.7%, ending about 0.3% below its record high, while the Dow Jones Industrial Average gained 0.2% to 51,267.90. Nvidia led the gains in the index, closing up 2.1% at $238.90. It returned to a record high for the first time since May.
Meta Platforms and Tesla also each gained around 2%. Ten of the 11 S&P 500 sectors rose, led by materials and communication services. Oil prices edged lower as crude exports from Middle Eastern producers increased and the Group of Seven (G7) reaffirmed its commitment to expanding supply.
The rally gained momentum after U.S. employment data was released on Friday.
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Rate-hike bets fade… Hogan says ‘markets are looking for positive signs’
U.S. companies added just 29,000 jobs in September, far below the market’s estimate of 90,000, while figures for the previous two months were also revised down. With signs of a slowdown in hiring, CME’s FedWatch tool currently puts the chance of an October rate hike at around 20–24%, down sharply from roughly 70% a week ago.
Starting next week, earnings season for the third quarter will get underway in earnest, beginning with major U.S. banks. According to LSEG data, analysts expect S&P 500 companies’ third-quarter net income to rise by more than 30% year over year.
Art Hogan, chief market strategist at B. Riley Wealth, said in an interview, “With a major gap in economic data this week, investors are looking for any positive signs, and for now they’re focusing on falling energy prices.” Sean McLaughlin, head of options strategy at AllStar Charts, said before the market opened, “There’s been plenty of reason for the market to correct, but it hasn’t actually fallen,” adding, “For now, the path of least resistance is to the upside.”
Bitcoin and bond yields
The more dovish interest rate outlook is also supporting riskier assets such as cryptocurrencies. Bitcoin (BTC) briefly tested the $87,000 level before trading around $86,000 during the session. The fact that it has failed to hold consistently at that level since the jobs report is a source of concern.
However, bond yields remain a headwind for both stock and crypto markets. The yield on the 10-year U.S. Treasury rose 3 basis points to 5.31%, trading near its highest level since 2002.
The Nasdaq set a new record for the first time in about two weeks. In the meantime, U.S. Treasury yields surged to levels not seen in more than 20 years, while oil prices remained elevated in the wake of the war with Iran. Even so, the S&P 500 held about 1% below its record high over that period, and a two-day rally sparked by Friday’s disappointing jobs data ultimately made Nasdaq history.
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