Tech Stocks Lift Nasdaq
Nasdaq Outperforms As Technology Shares Drive Mixed Market Open In Early Trading
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Key Points
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The Federal Reserve cut its benchmark overnight rate by 25 basis points last month, and investors were awaiting the minutes from that September meeting for more detail on policymakers’ thinking.
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The September services PMI rose to 58.8, with new orders increasing at their fastest pace in four and a half years and firms hiring at the quickest pace since June 2022.
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Technology and Communication Services were the only sectors in positive territory at the open, while Real Estate and Energy were among the weakest performers.
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Investors entered the first full trading week of October with the S&P 500 about 1% below its August record high; the week’s earnings calendar was described as relatively light.
U.S. stocks opened mixed Monday as technology shares drove the Nasdaq to a record high, offsetting weakness in traditional sectors. The Benzinga Nasdaq 100 hit an all-time peak while the S&P 500 edged up 0.45% to 7,756.62, though the Dow slipped lower as investors weighed elevated Treasury yields near 5.3% against falling oil prices and labor-market weakness.
Investors are watching for clues on interest-rate policy from Wednesday's Federal Reserve minutes, released after the central bank cut rates by 25 basis points last month. A bright spot came from services data: the September services PMI jumped to 58.8, with new orders rising at their fastest pace in four and a half years and hiring accelerating to the quickest speed since June 2022.
Tech Powers Higher While Bonds Climb
Technology and Communication Services were the only sectors gaining at Monday's open, with mega-cap names like Nvidia leading the advance. BigGo Finance reported the Nasdaq Composite set a new all-time intraday high, powered by these growth stocks. Meanwhile, the 10-year Treasury yield climbed to 5.3% and the dollar strengthened against the euro.
Higher Treasury yields typically weigh on stock valuations, especially for growth companies. Yet technology shares continued climbing as investors bet on strong earnings and artificial intelligence tailwinds. Real Estate and Energy were among the weakest performers Monday, hurt by the rising interest-rate environment.
Oil Prices Ease as Economic Outlook Shifts
West Texas Intermediate crude oil prices slipped Monday, providing some relief to inflation concerns. Market Screener noted that oil declines often boost investor sentiment by suggesting less pressure on input costs and corporate margins. The move came as traders assessed mixed signals about U.S. economic momentum.
Services Boom Signals Economic Strength Ahead
The sharp expansion in U.S. services activity offered encouraging news about the economy's near-term health. New orders increased at their fastest pace in four and a half years, and firms hired workers at the quickest pace since June 2022, suggesting companies remain confident despite recession fears. This strength could complicate the Fed's rate-cut plans if inflation remains sticky.
Market Eyes Fed Minutes and Earnings Season
The S&P 500 sits roughly 1% below its August record high, leaving little room for error. Benzinga noted that the week's earnings calendar is relatively light, meaning investor attention will focus heavily on Wednesday's Federal Reserve minutes for guidance on future interest-rate moves. The central bank's tone on inflation and employment will shape trading direction in the days ahead.
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