Nasdaq Closes at Record as AI Rally Powers Past Surging Bond Yields

Monday, October 5, 2026 — Wall Street's AI rally powered past surging bond yields on Monday, closing the Nasdaq Composite at a record 27,477.31 — up 1.05%, the index's 23rd record close of the year. The S&P 500 added 0.66% to 7,773.95, sitting within 0.3% of its own closing record, while the Dow rose 0.18% to 51,267.90.

The headline number masks how unusual the day was. The 10-year Treasury yield climbed to 5.31%, its highest level since April 2002 — more than 24 years. The 30-year touched 5.664%, its highest close since May 2002. Oil fell. The dollar rose. And stocks went up anyway.

Nvidia does the heavy lifting — again

The day's most important number belongs to one company. Nvidia rose 2.1% to a record $238.90 — its first record close in more than four months, per Barron's — and now sports a market capitalization north of $5.7 trillion. In a market-cap-weighted index, that's the whole ballgame: Nvidia, Microsoft, Meta and Tesla did the driving, as The Wealth Alliance's Eric Diton put it in commentary carried by Investopedia, which noted that hopes for a broader rally face "tough sledding" with rates still climbing.

The logic behind the bid is earnings. Goldman Sachs analysts expect most companies to beat consensus estimates again this quarter, with 9% year-on-year earnings growth for the median S&P 500 stock, and the AI trade's defenders argue that corporate spending on AI infrastructure justifies multiples that look alarming in any other context. "The Nasdaq is being driven by a handful of the largest stocks," The Wealth Alliance president Eric Diton wrote in commentary carried by Investopedia — and on Monday, that handful was enough. Ten of the 11 S&P 500 sectors finished higher, with materials and communication services leading; only real estate ended in the red, the one corner of the market that can't outrun mortgage rates.

The bond market's warning

None of this means the bond market has been defeated — it means the stock market is choosing to ignore it, for now. The 10-year yield's rise to 5.31% (up 3.4 basis points on the day, touching 5.35% intraday) is the kind of move that has historically priced equities lower, and the 30-year at 5.664% keeps pressure on everything from corporate borrowing to home buying. As Houston advisor J.D. Joyce told the Wall Street Journal: take an average-price home, look at the monthly payment a few years ago versus now, and think about how much more of a buyer's disposable income goes to debt service.

The counterweight came from Friday's jobs data. September's employment report showed just 29,000 jobs added — far below the 84,000 economists expected, and a fraction of August's 162,000. Per CME FedWatch, traders now put the odds of a Fed rate hike at the late-October meeting at 24%, down from 71% a week ago. A soft labor market is doing double duty: it cools the economy's inflation risk while making another rate hike politically and economically harder to justify. That's the tightrope the whole rally is walking.

Around the world

The day's other big mover was Brazil. Right-wing candidate Flavio Bolsonaro's stronger-than-expected first-round showing sent Brazilian assets up roughly 8%, and the ripple reached U.S.-listed names: Latin American e-commerce play MercadoLibre bounced 9.7%, closing above both its 50-day and 200-day moving averages, while SpaceX — formally Space Exploration Technologies — climbed 7.6% to its highest close since June. Tesla added more than 2%, and Visa led the Dow with a 2.5% gain.

In energy, oil futures fell $1.68 (1.8%) to $89.43 a barrel in New York — even as Saudi Aramco CEO Amin Nasser warned that global oil inventories have been depleted by the Middle East conflict and could take as long as two years to rebuild once flows through the Strait of Hormuz normalize. The G7 agreed last week to release 100 million barrels of oil and processed fuels from emergency stockpiles, a cushion that bought the market time but not much else. Meanwhile the dollar extended recent gains as unrest and budget worries in France weighed on the euro, which hit a more than one-year low against the greenback.

One more number worth knowing: the headline record was narrower than it looked. Only about half of Nasdaq-listed stocks actually rose on the day — 1,566 advancers against 1,469 decliners — with the index's gain concentrated in its largest names. The Russell 2000 small-cap index added 0.5% to 2,847.14, and the day's single biggest S&P 500 mover was PTC, up 34.6% after France's Schneider Electric agreed to acquire the software firm in a $22.6 billion all-cash deal. Gold inched up 0.1% to $4,166.30.

What comes next

This week is expected to be quiet — a muted stretch of corporate results and economic data before earnings season begins in earnest next week, with Delta reporting Friday and the big banks after that. The question for the bulls is whether earnings can do what bond yields couldn't and actually justify this market, or whether the AI trade's next leg needs something more than Nvidia's gravity. For now, the tape says what it has said all year: the records keep coming, the yields keep rising, and neither side is blinking. This morning's futures preview and our midday report traced the day as it built; today's midday movers and Nvidia's historic $150 billion buyback round out the day's market coverage.