[New York Stock Exchange] All Major Indexes Close Higher as AI Surge Overcomes Interest Rate Worries

Indexes driven by buying in AI and Big Tech
U.S. 30-year yield hits 5.664%
WTI falls below $90

AI-related stocks remained strong, leading all three major U.S. stock indexes to close higher on October 5 (local time), despite concerns over rising long-term U.S. Treasury yields.

On the New York Stock Exchange, the Dow Jones Industrial Average closed at 51,267.90, up 90.94 points (0.18%) from the previous trading day. The large-cap S&P 500 rose by 51.23 points (0.66%) to end at 7,773.95, while the tech-heavy Nasdaq Composite jumped 286.44 points (1.05%) to finish at 27,477.31.

On this day, the influx of buying into large technology companies related to artificial intelligence (AI) helped drive all three major indexes higher. Investor sentiment was more strongly influenced by expectations of corporate earnings and AI investment than by concerns over high interest rates and energy costs.

By individual stock, SpaceX rose 7.63%, Meta climbed 1.90%, Microsoft increased 1.48%, Nvidia advanced 2.12%, and Tesla gained 2.20%.

Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, told CNBC that the strong profit growth of technology companies and surging demand for AI computing are offsetting the impact of rising interest rates. He explained that even as funding costs rise, the robust demand for AI infrastructure is minimizing the shock experienced by related companies.

Lisa Shalett, Chief Investment Officer (CIO) at Morgan Stanley Wealth Management, also assessed that, given the AI boom is less sensitive to economic growth and interest rate changes, it is understandable that the stock market remains relatively stable despite bond market volatility.

Mislav Matejka, strategist at JP Morgan, noted that while corporate earnings are expected to remain robust, investors' outlook on the stock market is excessively pessimistic. Ulrike Hoffmann-Burchardi, CIO at UBS, said that with solid growth and earnings, there is room for further stock price increases over the next 6 to 12 months, though she cautioned that volatility could still surface during that period.

In the bond market that day, long-term Treasury yields continued to climb. According to CNBC, the U.S. 10-year Treasury yield rose by more than 3 basis points to 5.311%, and the 30-year yield increased by over 3 basis points to 5.664%. Concerns that the Federal Reserve may maintain high rates for an extended period due to persistent inflation exerted upward pressure on yields.

Economic indicators released that day showed that while the expansion in the services sector continued, cost pressures were also growing. The U.S. Institute for Supply Management (ISM)’s Service PMI for September came in at 54.9, down from 55.4 the previous month but generally in line with market expectations of 55. A PMI above 50 indicates expansion, while a reading below that signals contraction.

The price index rose to 74.0 from 72.6 in the previous month, hitting the highest level since July 2022. The employment index climbed from 47.8 to 50.1, returning to an expansionary phase. Although the growth rate has somewhat slowed, inflationary pressures remain high.

Global oil prices fell. Brent crude futures declined 1.89% to $100.32 per barrel, while West Texas Intermediate (WTI) futures closed 1.8% lower at $89.43 per barrel. Despite the drop in oil prices, persistently elevated energy costs continue to weigh on the market.

Bloomberg reported that U.S. President Donald Trump is preparing measures to ease restrictions on the use of duty-free diesel in an effort to lower diesel price burdens.

Investors are focused on the minutes of the Federal Reserve's September Federal Open Market Committee (FOMC) meeting, which will be released on October 7. After last week’s employment data came in below market expectations, partially easing concerns about an additional rate hike this month, investors are looking to the minutes for insights into the background of last month's 0.25 percentage point rate increase and committee members’ views on further monetary tightening.

This content was produced with the assistance of AI translation services.