The Nasdaq Composite snapped a four-day losing streak on Monday, even as Treasury yields reached levels not seen in over a decade.
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The tech-heavy index gained 1.6% to close at 13,497.59, its biggest one-day advance since July 28, when it rallied 1.9%. The S&P 500
gained 0.69% to close at 4,399.77. The Dow Jones Industrial Average fell 0.11% to 34,463.69.
Palo Alto Networks rallied 14.5% on stronger-than-expected earnings, and Nvidia popped 8.3% ahead of its earnings report due Wednesday. Tesla and Meta climbed 7% and 2.4%, respectively. The S&P 500 tech sector gained 2.26% on Monday.
Those moves came even as the benchmark 10-year Treasury note yield hit a high of 4.34%, reaching its highest level since November 2007. Yields, which rise when bond prices fall, are typically bad for tech and other growth stocks as they lessen the value of their promised future earnings. That made the day’s tech gains notable.
“I think the path of least resistance is the momentum that you’ve seen coming into this week,” said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. “The 10-year Treasury continues to rise here, and although you did see positive impulse for markets and in particular cyclicals, I think, ultimately, the 10-year Treasury is going to weigh on valuations and put more downward pressure on the markets as the week develops.”
Monday’s moves come after weekly declines on Wall Street, which added to the market’s late-summer slump. The S&P 500 and Nasdaq each fell for a third straight week, while the Dow had its biggest weekly decline since March.
“I think the dip you saw last week was the beginning of more to come,” said David Bianco, New York-based chief investment officer at DWS Group Americas. “The bond market is putting up a really attractive alternative to equity investors—unless somebody believes that the S&P 500 is gonna go from the no earnings growth it’s been stuck in for about two years now to really strong earnings growth.”
This week, investors are anticipating an address Friday morning from Federal Reserve Chair Jerome Powell at the central bank’s annual symposium at Jackson Hole, Wyoming.