U.S. stocks advanced on Monday, October 5, with the Nasdaq Composite reaching a record closing high as investors continued to buy major technology and artificial-intelligence companies. The S&P 500 also moved closer to its previous record despite concerns about rising Treasury yields and geopolitical tensions.
The Nasdaq gained about 1.05% to close at 27,477.31, marking a new record. The S&P 500 rose 0.66% to 7,773.95, leaving it only about 0.3% below its previous record, while the Dow Jones Industrial Average increased 0.18% to 51,267.90.
Technology stocks were among the major drivers of the rally. Nvidia gained 2.1% and reached a record closing level, pushing its market value to approximately $5.76 trillion. Microsoft, Meta Platforms and Tesla also recorded gains during the session.
Investors were encouraged by expectations of strong third-quarter corporate earnings, particularly from companies benefiting from the continued expansion of artificial intelligence. Major U.S. banks are expected to begin reporting their third-quarter results next week.
The market also received support from weaker-than-expected U.S. employment data released last week. The figures reduced expectations that the Federal Reserve would raise interest rates at its October meeting. Traders were placing only a 24% probability on an October rate increase, down from about 70% a week earlier.
However, there are still concerns in financial markets. The yield on the 10-year U.S. Treasury note rose to about 5.31%, its highest level since 2002. Higher yields can make borrowing more expensive and potentially put pressure on stock valuations.
Oil prices also remained volatile, with Brent crude settling slightly above $100 per barrel. Falling oil prices during the session helped support investor sentiment as markets watched developments in the Middle East.
The strong performance of U.S. technology shares highlights continued investor confidence in artificial intelligence and other growth sectors. However, analysts remain cautious because elevated bond yields, energy prices and geopolitical tensions could create challenges for global markets.
