Tech Stocks Soar as Bond Yields Rise. The Nasdaq Composite (IXIC) surged to a new all-time high on Tuesday, as investors flocked to tech stocks. The index soared past 17,000 points for the first time, closing at 17,019.88. This rally was primarily driven by Nvidia (NVDA), which saw its stock jump 7% to a record $1,139.01 per share.
The catalyst behind Nvidia’s spike was the announcement that Elon Musk’s AI startup, xAI, had secured $6 billion in private funding. This news led investors to speculate that xAI would heavily rely on Nvidia’s advanced chips, boosting demand for Nvidia shares.
Meanwhile, the broader market showed mixed results. The S&P 500 managed a modest 0.1% increase, but the Dow Jones Industrial Average ended the day in negative territory. This downturn was attributed to rising bond yields, which often signal higher borrowing costs and can dampen investor sentiment. The yield on the benchmark 10-year note climbed to 4.542% from Friday’s 4.471%.
The rise in bond yields sent shockwaves through real-economy stocks, contributing to the Dow’s decline. As bond prices fell, the corresponding increase in yields created concerns about the potential for higher borrowing costs and their impact on economic growth.
In addition to the influence of bond yields, market analysts are closely watching the Federal Reserve’s next moves regarding interest rates. Speculation about further rate hikes or sustained high rates adds another layer of uncertainty, potentially affecting investor strategies and market dynamics in the coming weeks. Tech Stocks Soar as Bond Yields Rise.