Nasdaq Hits Record High as Oil Prices Retreat from Weekly Peak
Global equities rallied on Monday as Brent crude dropped 3.4% and the 10-year Treasury yield eased below the 5% threshold.
Key points
- The Nasdaq composite rose 2.3% to a record high while the S&P 500 gained 1.5% on Monday.
- Brent crude oil prices dropped 3.4% to $100.34, easing inflation concerns that had driven yields higher.
- The 10-year Treasury yield fell to 4.95% after briefly crossing the 5% mark last week.
The Nasdaq composite reached a new all-time high on Monday, driven by a 2.3% surge in technology stocks. This gain followed the immediate reversal of last week's sharp increases in energy costs and government borrowing rates.
The S&P 500 climbed 1.5% to sit just 0.4% below its previous record. The Dow Jones Industrial Average added 366 points, reflecting broad market confidence as investors reassessed the current inflation outlook.
Energy costs ease market pressure
Brent crude oil prices fell 3.4% to settle at $100.34 per barrel. This drop from the nearly $110 peak last week reduced immediate inflationary pressure on the broader economy.
Average U.S. gasoline prices remain high at nearly $4.48 per gallon. However, the weekly decline in crude costs helped lower the perceived risk of further price spikes in refined products.
Bond yields retreat from record levels
The yield on the 10-year U.S. Treasury eased to 4.95% from 5.01% late Friday. This move brought the rate back below the 5% threshold it had crossed for the first time since 2023.
Lower yields reduce borrowing costs for governments, households, and businesses. This shift in the bond market provided a supportive backdrop for equity valuations across multiple sectors.
Geopolitical signals support investor sentiment
U.S. Treasury Secretary Scott Bessent described recent talks with Chinese Vice Premier He Lifeng as successful. This diplomatic progress contributed to the broader optimism seen in Monday's trading session.
China confirmed that President Xi Jinping will visit the United States from September 23 to 25. Discussions on trade and tariffs are expected, providing clarity that markets had previously lacked.
