U.S. stocks rose as optimism about the artificial-intelligence boom offset a rise in bond yields around the world.
The Dow Jones Industrial Average rose 90.94 points, or 0.18%, to 51267.90. The S&P 500 added 51.23 points, or 0.66%, to 7773.95. The tech-heavy Nasdaq Composite gained 286.45 points, or 1.05%, to 27477.31, closing at a record high.
The Nasdaq was powered to records by the outlook for blistering AI earnings growth, said J.D. Joyce, president of Houston financial advisory Joyce Wealth Management. AI bellwether Nvidia rose 2.1% to a record $238.90, and now sports a market capitalization over $5.7 trillion.
But the increases in bond yields have emerged as a threat to the rosy economic and earnings outlook, Joyce added.
The yield on the two-year Treasury rose 0.008 percentage point to 4.831%. The yield on the 10-year Treasury note rose 0.034 percentage point to 5.310%, the highest since April 2002. The yield on the 30-year bond added 0.035 percentage point to 5.664%, the highest close since May 2002.
"Take an average-price home," said Joyce. "Look where rates were a few years ago and what the monthly payment was. Now look at the current rate - assuming a buyer could even qualify - and think about how much more of their disposable income is going to debt service versus other things."
Oil futures fell $1.68, or 1.8%, to $89.43 a barrel in New York. Amin Nasser, the chief executive of Saudi state oil company Aramco, warned that global oil inventories have been depleted by the Middle East conflict and could take as long as two years to rebuild, even after flows through the Strait of Hormuz normalize. The Group of Seven nations agreed last week to release 100 million barrels of oil and processed fuels from emergency stockpiles.
The U.S. dollar added to recent gains as unrest and budget worries in France weighed on the euro. The European currency hit a more than one-year low against the greenback. French bonds have also sold off heavily in recent sessions.
Gold futures, which are inversely correlated to the dollar, fell $5.30, or 0.1%, to $4128.40 a troy ounce.
There was another wave of deal activity, a promising sign for Wall Street bank earnings.
Trucking coordinator C.H. Robinson agreed to buy truck broker RXO for more than $5 billion in cash and stock in a deal that would create one of the largest U.S. logistics firms.
French electric-equipment maker Schneider agreed to buy PTC, a maker of computer-aided design programs and other industrial software, for about $22.6 billion. Schneider is retooling in anticipation of increased use of AI in the construction and manufacturing spheres.
GE Healthcare is reportedly close to a $945 million buyout of medical-imaging materials maker Sofie Biosciences.
Economic data remained relatively benign. The Institute for Supply Management's purchasing managers index for services providers slipped to 54.9 in September from 55.4 in August, but still reflected a perception of increased activity in the U.S. services sector.
Vaxcyte shares surged 31% to $73.82 after the drug maker's experimental pneumonia vaccine compared favorably to two currently available shots in a late-stage clinical trial.
Paramount Skydance confirmed that David Ellison would serve as co-chief executive of Skydance, the entity due to emerge following the Hollywood studio's acquisition of rival Warner Bros Discovery. Ellison, currently head of Paramount, will lead the new company alongside outgoing Mattel Chief Executive Ynon Kreiz and retain key lieutenants such as CBS News executive Bari Weiss.
The turmoil in bond markets has taken its toll on some Wall Street players. Shares of private-credit fund manager Blue Owl are down 20% in the last month as redemption requests keep pouring in.