Nasdaq hits record high as chipmakers fuel stock gains
By Karen Brettell
NEW YORK, Sept 21 (Reuters) – The Nasdaq hit a record closing high on Monday, lifted by gains in Advanced Micro Devices and other AI heavyweights, while falling oil prices and long-dated Treasury yields also boosted risk sentiment.
Chip stocks rallied, with Intel and Arm Holdings surging over 12%, and the PHLX semiconductor index jumping 4.3%.
Advanced Micro Devices closed 10% higher to reach a market capitalization of $1 trillion for the first time.
Investors pointed to signs that suggest spending on AI is still expanding, despite recent safety warnings from leaders of AI giants a week ago that triggered a global tech selloff.
The Nasdaq Composite rose 2.26% and posted a record closing high for the first time since June 2, while the S&P 500 gained 1.49%, just shy of its record. The Dow Jones Industrial Average ended up 0.71%.
MSCI’s All-World index rose 1.31%, while shares in Europe rallied 1.02%.
Risk appetite remains strong despite growing expectations of further global rate hikes.
“While synchronized rate hikes have raised concerns about risk assets, equities remain near record highs, supported by strong earnings growth,” said Seema Shah, chief global strategist at Principal Asset Management.
“Importantly, central banks are raising rates to address inflation rather than to slow economic activity, suggesting tightening will be gradual and limited. While higher rates may hinder further multiple expansion, they are unlikely to materially pressure earnings or derail the broader bull market,” Shah said.
SHORT-DATED YIELDS RISE
Interest-rate-sensitive two-year US Treasury yields rose 0.75 of a basis point to 4.751% and earlier reached 4.772%, the highest since July 2024. Benchmark 10-year yields fell 4.5 basis points to 4.951%.
Central banks in most major economies are expected to raise rates again this year. Hawkish guidance from the Federal Reserve last week has futures wagering on a 55% chance it will hike rates again in October, with 91% odds of a hike by year-end.
Concern about the impact of inflation, as well as over governments’ long-term finances, hit French debt on Friday, sending its risk premium to the highest since the 2012 euro zone debt crisis.
But yields fell on Monday alongside the drop in oil, leaving German 10-year yields down 6 basis points at 3.462% and French 10-year yields 9 bps lower at 4.474%.
OIL RETREATS, FOR NOW
Oil futures prices eased even as Iran and the United States exchanged new threats and after the Houthis attacked Saudi Arabia’s capital.
