Nasdaq Hits Record High as Oil and Bond Yields Ease
Global stocks rallied Monday as Brent crude fell to $100.34 and the 10-year Treasury yield dropped to 4.95%, easing inflation concerns.
Key points
- Nasdaq hit an all-time high of 27,122.09 while the S&P 500 rose 1.5% to 7,764.70 on Monday.
- Brent crude oil fell 3.4% to $100.34, easing inflation fears that had driven bond yields higher.
- AMD stock surged 9.9% to reach a $1 trillion valuation as Bitcoin climbed above $86,000.
The Nasdaq composite surged 2.3% to an all-time high of 27,122.09 on Monday. This gain followed a sharp drop in oil prices and a decline in bond yields that had rattled markets last week. The S&P 500 rose 1.5% to 7,764.70, moving within 0.4% of its recent record. The Dow Jones Industrial Average added 366 points, or 0.7%, to close at 52,048.83.
Brent crude oil prices fell 3.4% to $100.34 per barrel, reversing some of the previous week's spike. This decline reduced pressure on inflation expectations and helped stabilize investor sentiment. The 10-year Treasury yield eased to 4.95% from 5.01% late Friday, dropping below the 5% threshold it briefly crossed. These moves provided relief for equities that had been weighed down by rising borrowing costs.
Oil price decline eases inflation fears
Crude prices had approached $110 last week due to supply concerns in the Middle East. However, some volume is now moving through the Strait of Hormuz, alleviating immediate scarcity fears. Morgan Stanley’s Michael Wilson identifies further spikes in energy costs as the primary risk to his year-end market target. Investors also noted that profit-taking contributed to the recent price correction in commodities.
The average price for a gallon of regular gasoline in the U.S. is nearly $4.48. This represents a significant increase from $3.18 a year ago and $4.32 just last week. High yields make borrowing more expensive for governments, households, and businesses. Consequently, the recent drop in energy prices helps mitigate the broader economic impact of elevated interest rates.
Tech and crypto sectors lead rally
Advanced Micro Devices shares jumped 9.9%, pushing its market value to $1 trillion. Nvidia stock rose 2.3% as demand for AI chips remains robust despite industry safety debates. Bitcoin climbed above $86,000, returning to levels last seen in January. Coinbase Global increased 3.5%, and Robinhood Markets gained 2.9% on this renewed digital asset momentum.
Warner Bros. Discovery shares leaped 10.8% after settling lawsuits with 12 states and Hollywood writers. This legal resolution cleared a major hurdle for its buyout by Paramount. In contrast, Paramount Skydance shares fell 2.9% during the session. The divergence highlights how specific corporate legal news can drive sharp, idiosyncratic price movements within a broad market rally.
Geopolitical tensions show signs of easing
U.S. Treasury Secretary Scott Bessent described recent talks with Chinese Vice Premier He Lifeng as very successful. China’s Foreign Ministry confirmed that President Xi Jinping will visit the United States from September 23 to 25. Trade, tariffs, and AI safety are expected to be key topics during this state visit. These diplomatic developments helped improve overall optimism in global markets, according to ING strategists.
