New York, Oct 6: US stocks ended higher on Tuesday, with the Nasdaq Composite closing at a fresh record high, as technology and artificial intelligence-linked shares attracted strong buying despite another rise in US Treasury yields.
The Nasdaq gained 1.05 per cent to close at 27,477.31, after touching an intraday high of 27,544.07. The S&P 500 advanced 0.66 per cent to 7,773.95, while the Dow Jones Industrial Average rose 90.94 points, or 0.18 per cent, to finish at 51,267.90.
AI and technology stocks lead the rally
Technology stocks remained at the centre of the market’s gains, with investors continuing to favour companies positioned to benefit from growing artificial intelligence investment.
SpaceX shares jumped more than 7 per cent, while Meta Platforms gained nearly 2 per cent and Microsoft advanced more than 1 per cent. Nvidia and Tesla also added around 2 per cent each.
The strength in technology shares came despite higher borrowing costs, highlighting investors’ continued confidence in the earnings and growth potential of major technology companies.
Treasury yields climb to multi-year highs
The equity rally unfolded alongside another rise in US government bond yields. The benchmark 10-year Treasury yield climbed more than 3 basis points to 5.311 per cent, while the 30-year yield increased by more than 3 basis points to 5.664 per cent.
Rising yields have remained a major concern for equity investors because they can increase financing costs and reduce the relative attractiveness of risk assets.
Markets have also been assessing whether persistent inflation could encourage the Federal Reserve to maintain a restrictive interest-rate stance for longer than previously expected.
Services activity remains resilient
Investors also digested the latest US services-sector data.
The ISM Services Purchasing Managers’ Index stood at 54.9 in September, broadly in line with expectations, although slightly below the previous month’s reading. A reading above 50 indicates continued expansion in the services sector.
The data offered another indication that the US economy continues to expand despite tighter financial conditions.
Fed minutes in focus
Market attention is now turning towards the minutes of the Federal Reserve’s September meeting. Investors will look for clues about policymakers’ assessment of inflation, economic growth and the future path of interest rates.
The minutes could provide further insight into how the central bank views the balance between persistent price pressures and economic activity.
Oil prices ease
Crude oil prices moved lower, offering some relief on the inflation front.
Brent crude settled 1.89 per cent lower at $100.32 a barrel, while West Texas Intermediate declined 1.8 per cent to $89.43 a barrel.
Lower oil prices could help ease some cost pressures, although energy markets remain sensitive to geopolitical developments and supply concerns.
Global equities remain resilient
Despite concerns over higher interest rates, elevated bond yields and geopolitical uncertainty, global equities have continued to show resilience.
Investors remain divided over whether strong corporate earnings and technology-led growth can sustain the rally or whether elevated valuations and macroeconomic risks could eventually trigger a correction.
For now, market sentiment remains relatively constructive, with technology stocks continuing to provide leadership even as investors closely monitor interest rates, inflation, bond yields and global economic risks.