Stories
Dow Recovers and Nasdaq Hits Record as Investors Embrace AI Trade Despite Rising Yields
- •Wall Street benchmark indices started the week positively as investors looked past soaring bond yields to invest in the AI sector.
- •The Dow Jones recovered over 400 points from its daily lows to finish up 90 points, while the S&P 500 and Nasdaq outperformed.
- •Nasdaq reached new record peaks driven by a 7 percent surge in SpaceX and gains of over 2 percent in Nvidia, Tesla, and Meta shares.
- •The 10-year US Treasury yield surged to 5.349 percent, reaching levels not seen since April 2002, with 30-year yields nearing 5.703 percent.
- •Crude oil prices cooled down, with Brent Crude nearing a drop below 100 dollars per barrel as production capacity recovered in the Gulf.
Key Questions Answered
Benchmark indices on Wall Street began the week positively on October 5 as investors looked past higher bond yields to invest in the AI trade. The Dow Jones recovered over 400 points from daily lows to end up by 90 points, while the S&P 500 rose 0.7% and both the Nasdaq 100 and Nasdaq Composite hit new record peaks.
The US 10-year bond yield surged as high as 5.349% on Monday, October 5, reaching a level last seen in April 2002. Meanwhile, the US 30-year bond yield hit 5.703% for the first time since May 2002, with BMO Asset Management predicting that 30-year yields will inevitably reach 6% within the month.
According to Principal Asset Management, strong corporate earnings, consumer spending, and sustained investments in artificial intelligence have kept the market resilient while absorbing rising interest rates, higher energy costs, and renewed inflation concerns.
