Nasdaq Hits Record High as Oil Drops and 10-Year Yield Eases
Global stocks rallied Monday as Brent crude fell to $100.34 and the 10-year Treasury yield dropped to 4.95%.
Key points
- The Nasdaq hit a record high, rising 2.3% to 27,122.09, while the S&P 500 gained 1.5% to 7,764.70.
- Brent crude oil fell 3.4% to $100.34, easing pressure on inflation expectations and stock valuations.
- The 10-year U.S. Treasury yield dropped to 4.95% from 5.01%, reducing borrowing costs for the government.
The Nasdaq composite reached a new all-time high on Monday. It climbed 2.3% to close at 27,122.09. This gain followed a broad rally in global equity markets. The advance came as oil prices retreated from last week's peaks.
The S&P 500 jumped 1.5% to end at 7,764.70. It now sits within 0.4% of its recent record. The Dow Jones Industrial Average added 366.19 points. This move eased pressure from rising bond yields and energy costs.
Energy costs retreat from weekly highs
Brent crude prices fell 3.4% to settle at $100.34 per barrel. This level remains well above the summer average of $72. However, it is down from the nearly $110 peak last week. The decline reflects some relief in supply constraints.
Investors are watching the Strait of Hormuz for shipping updates. Tensions with Iran continue to limit the volume of crude oil. Morgan Stanley identifies higher energy prices as a key risk. This factor could prevent the U.S. market from reaching its year-end targets.
Bond yields ease below five percent
The 10-year Treasury yield dropped to 4.95% on Monday. It had crossed the 5% threshold late in the prior week. This was the first time that barrier was breached since 2023. Lower yields reduce borrowing costs for households and governments.
Inflation concerns and global debt loads drive rising bond prices. Higher yields make it costlier for the U.S. to fund its bills. Businesses also face steeper expenses for expansion and operations. The recent dip offers temporary relief to the broader economy.
AI and crypto stocks lead gains
Advanced Micro Devices surged 9.9% to hit a $1 trillion market value. Nvidia added 2.3% to its share price. These moves followed a dip in technology stocks earlier in the week. Demand for chips powering artificial intelligence remains robust across the sector.
Bitcoin rose above $86,000, returning to levels last seen in January. Coinbase Global shares climbed 3.5% on the day. Robinhood Markets added 2.9% to its valuation. These gains reflect renewed investor interest in digital assets.
