US stocks ignore high yield warning! Tech stocks lead gains, pushing the S&P 500 close to a record high.

As investors largely shrugged off concerns over bond yields rising to multi-decade highs, tech stocks led gains, pushing the S&P 500 close to a record high. On Monday, all three major U.S. stock indices closed higher, with the S&P 500 up 0.66%; the Nasdaq rose 1.05%, hitting a record closing high; and the Dow gained 0.18%. Most large-cap tech stocks rose, with NVIDIA Corporation (NVDA.US) up 2.1%, setting a record closing high and lifting its market capitalization to $5.76 trillion; SpaceX (SPCX.US) rose 7.6%, reaching its highest level since mid-June; Tesla, Inc. (TSLA.US) gained 2.2%; Microsoft Corporation (MSFT.US) rose 1.48%; Meta (META.US) gained 1.9%; and Alphabet Inc. Class C (GOOGL.US) rose 0.86%. Chip stocks showed a stark divergence. Western Digital Corporation (WDC.US) rose over 6%, Seagate Technology Holdings PLC (STX.US) gained more than 4%, and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) and Broadcom Inc. (AVGO.US) each rose over 2%; Qualcomm (QCOM.US) and Intel Corporation (INTC.US) fell more than 2%, Micron Technology, Inc. (MU.US) and Arm (ARM.US) dropped over 1%, while AMD (AMD.US), ASML Holding NV ADR (ASML.US) and others also declined. In the face of surging global bond yields driven by factors including potentially higher interest rates, elevated energy costs, and resurgent inflation concerns, the stock market has largely remained unaffected. Instead, investors have focused on strong corporate earnings, resilient consumer spending, and a surge in artificial intelligence (AI)-related investment, using these to drive major benchmarks higher. The U.S. third-quarter earnings season will officially kick off next week, with major U.S. banks the first to report results. According to LSEG data, analysts on average expect S&P 500 constituent companies' third-quarter earnings to grow more than 30% year-over-year, largely thanks to AI-related stocks. Citi strategist Beata Manthey said: "Despite a growing list of headwinds (such as GEO Group Inc political risk and rising interest rates), the S&P index is still up about 13% year-to-date and is now just a stone's throw from its all-time high." Lisa Shalett of Morgan Stanley Wealth Management said: "Given that economic growth is accelerating and the AI boom is insensitive to interest rates, the relative calm in stocks amid a 'perfect storm' in the bond market is understandable." Meanwhile, the bond market remains one of the focal points. On Monday, U.S. Treasuries came under pressure again, with long-term yields rising to multi-decade highs. Both 10-year and 30-year U.S. Treasury yields rose at least 7 basis points, to 5.34% and 5.7% respectively, reaching their highest levels since 2002. Shorter-dated U.S. Treasury yields rose about 2 to 4 basis points. With the economy expanding on the back of booming spending on AI infrastructure, while elevated inflation keeps the possibility of further Federal Reserve rate hikes alive, investors remain cautious about concluding that bond yields have peaked. A U.S. services report released Monday showed that cost pressures grew last month at the fastest pace in more than four years. In addition, on the stock market side, market breadth remains one of investors' biggest concerns. The proportion of U.S. stocks trading above their 10-day, 50-day, and 200-day moving averages has fallen to levels last seen in March. Craig Johnson, chief market technician at Piper Sandler, said: "We need to see interest rates and oil prices pull back, but that isn't happening right now, and market internals are deteriorating. This will become a headwind for the market."