Nasdaq Hits Record Close as Treasury Yields Top 5.3%
The Nasdaq posted a record close after rising about 1%, with AI-linked stocks higher, while US Treasury yields again topped multi-decade highs. Futures edged higher on Tuesday as investors awaited the Federal Reserve minutes and weighed the impact of high interest rates on markets.
The Nasdaq posted a record close after rising about 1%, but another climb in US government bond yields drew investors’ attention. Stock futures edged higher on Tuesday as traders waited for signals on interest-rate policy from the Federal Reserve.
S&P 500 futures rose 0.11%, Dow futures gained 76 points, or 0.15%, and Nasdaq-100 futures added 0.15%. The moves followed a session in which the S&P 500 rose 0.7% and the Dow added about 90 points, or 0.2%.
Treasury yields were the point of tension. The 10-year yield again touched its highest level since 2002, topping 5.3%, while the 30-year yield briefly broke through 5.7%, a 24-year high.
Nasdaq and AI stocks gain
The Nasdaq’s rise was supported by stocks tied to the artificial intelligence trade. SpaceX jumped more than 7%, while Nvidia and Tesla each gained more than 2%. Meta Platforms and Microsoft rose more than 1%.
The moves supported tech indexes, but they came alongside a surge in yields that could change how investors value stocks. CNBC reported that high yields and bond-market volatility remain a concern for markets even as the major stock indexes post gains.
In short, the rally has not erased the pressure.
In Asia, Japan’s Nikkei rose 0.29% on Tuesday and Australia’s S&P/ASX 200 added 0.53%. South Korea’s Kospi fell 0.23%, while Hong Kong’s Hang Seng rose 0.95%. Mainland China’s markets were closed for the Golden Week holiday.
Oil also sent a shifting signal. Oil prices fell on Monday, with Brent crude down 1.9% to US$100.32 a barrel and West Texas Intermediate down about 1.8% to US$89.43. In Tuesday trading, oil prices were slightly higher.
Investors await Fed clues
Investors are waiting for the minutes of the Federal Reserve’s September meeting, due Wednesday. The document could shed light on policymakers’ thinking as they moved to raise interest rates.
Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, said the bond market has been volatile for the past six weeks. In a note to clients, she cited a possible new Fed policy framework, economic growth, and high oil prices as the Middle East conflict continues as factors affecting bonds.
“Nevertheless, while intraday implied volatility has risen, the six-week stretch has not reached the extremes that catalyzed the 2022 equity bear market,” Shalett wrote. The statement indicates that daily volatility has increased, but the six-week stretch of turbulence has not matched the extreme conditions that preceded the 2022 stock bear market.
For investors, the combination of a record-setting Nasdaq and elevated yields means the market’s next direction depends on how interest-rate expectations meet corporate earnings. The index gains have not answered whether stocks can hold their momentum while borrowing costs and bond yields stay high.
For global markets, US moves also served as a reference point as other exchanges faced sessions with mixed signals. The gain in tech stocks came alongside a drop in the Kospi, while mainland China’s market did not trade because of the holiday. The differences underline that Wall Street’s rally has not translated uniformly across the region.
Attention now turns to the September meeting minutes due Wednesday. Investors will look for clues on why rates were raised and how the policy could affect bond and stock markets.
