S&P 500 Hits Intraday Record as Tech Stocks Rally and Yields Fall
The S&P 500 hit an intraday record on Tuesday as tech stocks rallied and oil prices and Treasury yields fell, and the index was later up 0.8%. The Nasdaq also reached a record, and investors now await the Federal Reserve’s September meeting minutes, which could offer clues on the central bank’s rate decisions.
The S&P 500 touched an intraday record high on Tuesday as gains in tech stocks and falls in oil prices and Treasury yields lifted the US stock market. The move showed investors still buying stocks even as long-term borrowing costs sit near multi-decade highs.
The broad market index was up 0.8%, while the Nasdaq Composite also reached an intraday record high and gained 0.8%. The Dow Jones Industrial Average rose 338 points, or 0.7%, according to CNBC’s October 5 report.
The rally was again led by tech and semiconductor stocks. Marvell Technology shares jumped 7%, while Nvidia rose about 1% and Broadcom added 4%. Gains in these stocks gave the main indexes a lift.
S&P 500 lifted by tech stocks and falling yields
Treasury yields moved lower on Tuesday. The 10-year yield fell more than 4 basis points to 5.262%, while the 30-year yield fell more than 3 basis points to 5.631%. A day earlier, both had reached levels not seen since 2002.
Oil prices also weakened. Brent traded about 1% lower, around $99 a barrel, while West Texas Intermediate crude fell less than 1% to around $88 a barrel. Energy costs and bond yields are a market concern because they can affect inflationary pressure and interest-rate decisions.
However, the market’s rise was not even. Small-cap stocks lagged; the Russell 2000 index moved only slightly above flat, while the Nasdaq and S&P 500 set intraday records. The gap shows how much tech stocks are doing to lift the main indexes.
The effect is felt by investors who follow broad market indexes and by funds that move in step with them: gains in a few large stocks can push an index higher even if not every company rises. The rally also came while Treasury yields remain high, so developments in interest rates and inflation remain a risk to stock valuations.
Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, wrote to clients that bonds have been volatile for the past six weeks. She cited a possible new Federal Reserve policy framework, economic growth, and high oil prices as the Middle East conflict continues as factors affecting the market.
Although intraday volatility has risen, Shalett wrote, the six-week period has not reached the extreme levels that triggered the 2022 stock bear market. The assessment comes as investors focus on the relationship between bond yields and the durability of the stock rally.
Investors await Federal Reserve minutes
Attention now turns to the minutes of the Federal Reserve’s September meeting, due Wednesday. The document could offer clues on policymakers’ thinking as they raised interest rates.
For the market, the minutes could help explain how the central bank is assessing economic growth, inflation and pressure from energy prices. Investors will compare those clues with moves in bond yields, which have just fallen after hitting highs in the previous session.
CNBC reported that the S&P 500 rose 0.8% in Tuesday trading after touching an intraday record high. Further moves will come as investors study the Fed minutes and watch whether the declines in oil and Treasury yields continue.
