The Nasdaq Composite has reached an all-time high, climbing over 0.7% to $27,399.81 as traders monitor U.S. Treasury yields and recent economic data. The Dow Jones Industrial Average was down by 87 points, or nearly 0.2%, while the S&P 500 increased by approximately 0.4%.
Read More
The yield on the benchmark 10-year Treasury note rose by about 2 basis points to 5.298%, and the 30-year yield increased by 3 basis points, reaching 5.659%. These yields have surged to multi-year highs, prompting concerns that inflation may lead the Federal Reserve to maintain higher interest rates for an extended period. Market participants digested the Institute for Supply Management's (ISM) latest report on the growth of the services sector, which indicated that the Purchasing Manager's Index grew to 54.9 in September, slightly below the previous month's rate.
Investors are awaiting notes from the Fed’s September meeting, which are scheduled for release on Wednesday. This follows a week characterized by high Treasury yields and a disappointing jobs report, which eased some fears of another Fed rate hike. According to Citi strategist Beata Manthey, despite a variety of challenges, global equities are up about 12% year-to-date and remain close to all-time highs.
In corporate news, C.H. Robinson Worldwide announced a $5.8 billion deal to acquire RXO, causing RXO shares to surge over 20% while C.H. Robinson's shares fell nearly 12% in premarket trading. The deal, which values RXO at $30.25 per share, will provide RXO shareholders with $17.25 in cash and additional shares of C.H. Robinson.
Regarding the services sector, the ISM services index reported a growth reading of 54.9 for September, slightly below expectations. The employment index registered at 50.1, indicating minor expansion, while prices rose, showing persistent inflation pressures.
Additionally, shares of Harley-Davidson saw a notable increase of 5.7% after Citi upgraded the company to a buy rating and raised its price target. DraftKings also experienced a boost, with shares rising over 5% after Bank of America upgraded its rating to buy, indicating optimism surrounding the company's prediction markets despite regulatory uncertainties.
In international markets, Brazilian stocks rallied following the presidential election results, with the iShares MSCI Brazil ETF surging 13% in premarket trading. In Europe, stock markets opened positively, with the pan-European Stoxx 600 increasing by 0.5%. However, the euro fell to a 17-month low against the U.S. dollar, as political uncertainty in Spain and France raised concerns in the eurozone.