Preeti Ayyathurai
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Nasdaq Composite closed at a record high, with AI and semiconductor stocks leading Monday’s gains.
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But the rally is running alongside a sharp bond-market selloff. The 10-year Treasury yield climbed to about 5.31% Monday, while the 30-year yield approached 5.7%.
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Michael Burry said the market is in a “denial” phase, comparing it to 2000 and 2008 scenarios, while billionaire Ray Dalio reportedly warned that the U.S. could face a debt crisis within three years.
U.S. stock futures were higher early Tuesday following a record-setting session for tech equities.
As of 4:00 a.m. ET, Dow futures rose 0.5%, while Nasdaq, S&P 500 and Russell 2000 futures rose 0.2%. On Stocktwits, retail sentiment for the SPDR S&P 500 ETF (SPY), an exchange-traded fund that tracks the S&P 500 Index, has moved to ‘extremely bullish’ from bullish, and Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100 Index, has stayed ‘extremely bullish’ since last week.
Burry, Dalio Flag Risks
The stock rally is becoming increasingly concentrated around technology even as bond yields remain elevated. The 10-year Treasury yield climbed above 5.3% Monday, while the 30-year yield reached roughly 5.7%. Two of Wall Street’s most closely watched macro bears are warning that the rally may be masking growing risks.
Michael Burry, whose 2008 housing-market bet was chronicled in “The Big Short,” wrote that the stock market is in a “denial” phase reminiscent of 2000 and 2008. Separately, Bridgewater Associates founder Ray Dalio reportedly said the U.S. could face a debt crisis within three years as rising interest costs increasingly compete with government spending.
Wednesday brings another bond-market test with the 10-year Treasury auction, followed by the release of the Federal Reserve’s September meeting minutes. The minutes could offer clues on the Fed’s rate path.
AI & Semiconductor Stocks In Focus
Broadcom (AVGO): Wall Street banks have launched a record $60 billion debt syndication package tied to Anthropic’s lease of Google-designed TPUs supplied through Broadcom.
Microsoft (MSFT): Shares rose 0.5% in early premarket trading after Melius Research upgraded the stock to ‘Buy’ with a $665 price target.
Separately, reports indicate that Microsoft and Meta Platforms (META) reduced internal Claude spending to promote their own tools.
Advanced Micro Devices (AMD): CEO Lisa Su has reportedly signaled that compute demand will outpace supply for the next several years, with plans to substantially increase capacity by 2027 while expanding critical packaging investments in Taiwan.
