Nasdaq hits record high as traders shrug off fresh spike in bond yields

The bond sell-off is still going strong, but investors just don’t seem too concerned.

The sell-off in government bonds picked up steam on Monday, but investors shrugged off the latest spike in yields and piled into the tech sector. The move is the latest reflection of the animal spirits pushing the stock market higher in the final months of 2026, even as yields reach multi-decade peaks and threaten to dent equity valuations.

The yield on the 10-year US Treasury surged as much as 7 basis points to 5.35% before paring slightly. The yield is sitting at its highest level since 2002.

Yet, rather than panic, investors piled into stocks on Monday. The major indexes ticked higher, largely fueled by tech gains and optimism as oil prices drifted lower. Brent crude, the international benchmark, fell 1% to $100 a barrel as the G7 nations released oil stocks and exports from Middle East producers increased, easing concerns about supply tightness in the oil market.

The tech surge sent the Nasdaq Composite to a fresh all-time high.

Here’s where US indexes stood around 2:45 p.m. ET:

• S&P 500: 7,779.13, up 0.73%
• Dow Jones Industrial Average: 51,304.33, up 0.25% (+127.37 points)
• Nasdaq 100: 31,058.77, up 0.81%

In tech, SpaceX jumped 6% after a Morgan Stanley said the stock looked “cheap.” Microsoft also rose more than 2% after Melius Research issued a “buy” rating on the stock, and other hyperscalers and chip giants rose amid the AI optimism to start the week.

Here were some of the notable moves in tech on Monday:

“With rates still elevated and fuel costs pressuring the broader economy, the parts of the market that can generate earnings growth fast enough to outrun higher discount rates are the ones attracting capital, and right now that’s overwhelmingly the AI complex,” Luke Lango, a tech analyst, wrote in a recent note to clients.

Performance in the stock market lately has been “heavily weighted” toward tech and energy, causing the equal-weighted stock indexes to lag the benchmarks, strategists at Raymond James wrote in a note on Sunday.

“The ‘light at the end of the tunnel’ for this concentrating market is that performance of ‘YTD losers’ tends to start improving in the next couple of weeks,” the firm wrote, adding that it expected broader equities to see “some catch-up soon.”

Global bond markets also sold off, with France at the edge of a debt crisis as unrest mounts and investors fret over the nation’s fiscal health. The spread between France’s 10-year government bond yield and Germany’s 10-year government bond yield recently rose past 150 basis points, the widest spread in about 15 years.

Economists and market watchers have flagged the risk of financial contagion from Europe’s bond sell-off, warning of the possibility that higher yields begin to spill over into the rest of the market.

Investors will turn their attention next to the Fed minutes for the September policy meeting, which will give investors a hint about how central bankers are thinking about inflation and the path for interest rates heading into the final two meetings of the year.

Following last week’s tepid jobs report, investors now see a 76% chance the Fed will keep rates on hold at the October meeting, according to the CME FedWatch tool.