Nasdaq Hits Record as Nvidia Nears $7 Trillion Value

Summary

The Nasdaq closed at a record and Nvidia's market value neared $7 trillion, even as the US 10-year Treasury yield hit a fresh 24-year high. The euro recovered above $1.12 after an overnight slide, though Spain's snap election call added to French fiscal worries. European stock futures pointed higher and Asian shares gained modestly. Brent eased to near $100 as more Middle East oil exports passed through the Strait of Hormuz.

Equities

The FTSE 100 closed 0.34% higher at 10,497.94 on Monday, recovering after its steepest weekly decline since April as easing oil prices helped support the index. The FTSE 250 fell 0.29% to 24,123.75. Brent crude fell 0.44% to $101.83 a barrel after Middle Eastern exports increased and the G7 pledged to boost supplies.

Metals and mining shares rose 1.65% as copper prices increased for a second consecutive day. Ithaca Energy climbed 2.2% late on Monday after agreeing to acquire Suncor Energy's offshore oil assets for $842 million in upfront cash. BT Group gained 1.4% after agreeing to buy broadband provider TalkTalk for £400 million in a government-backed rescue deal.

Higher fuel costs remained a concern for UK interest rates. British services firms reported stronger cost pressures in September as fuel prices rose, while traders put the probability of a Bank of England rate hike in November at nearly 97%.

In the US, the S&P 500 closed 0.66% higher at 7,773.95 on Monday, leaving it about 0.3% below its August 13 record close. The Nasdaq rose 1.05% to a record 27,477.31, while the Dow Jones Industrial Average gained 0.18% to 51,267.90.

Nvidia rose 2.1% to a record close, taking its market value to $5.76 trillion, while Microsoft added 1.5%. Meta Platforms and Tesla both gained about 2% on Monday as investors looked ahead to third-quarter earnings, which begin next week with reports from major US banks.

PTC surged 33% after Schneider Electric agreed to acquire the software company in a $22.6 billion all-cash deal. RXO jumped more than 22% after C.H. Robinson agreed to buy the transportation broker for $5.8 billion, while C.H. Robinson fell nearly 11%.

The weaker September jobs data also reduced expectations for an October Federal Reserve rate hike. Traders put the probability of a hike at 24%, down from 70% a week earlier.

Forex & Commodities

The euro was down early on Tuesday at $1.1219, close to a 17-month low reached on Monday, after falling 1.2% last week. It was also down against sterling at 84.87 pence, having lost more than 1% against the British pound last week, as concerns over French debt, political uncertainty in France and an upcoming snap election in Spain weighed on the currency.

The US dollar was higher early on Tuesday, supported by elevated US Treasury yields, with the dollar index at 102.17 after reaching an 18-month high on Monday. Sterling was down early on Tuesday at $1.3216, while the dollar was higher against the yen at 158.16.

The Bank of Japan may signal this month that underlying inflation has roughly reached its 2% target, according to sources familiar with its thinking. That would underline the central bank's readiness to raise interest rates again in the coming months.

Expectations for a Federal Reserve rate hike in October have eased following weaker-than-expected US jobs data released on Friday. However, investors continue to expect further tightening later, while September services-sector data showed activity slowed and prices paid by businesses for inputs reached their highest level in more than four years.

Spot gold was down early on Tuesday at $4,128 per ounce, pressured by the firmer US dollar and higher Treasury yields. Losses were limited by reduced expectations of an October Fed rate increase, while markets were still pricing an 87% probability of a December hike.

Brent crude was up early on Tuesday at $100.59 a barrel, while US West Texas Intermediate was at $89.73. Middle East security concerns continued to support prices, although regional crude exports had recovered to more than 81% of pre-war levels in September and G7 countries had agreed to release 100 million barrels of diesel and crude from emergency reserves.