of S&P500 It rose to an intraday high on Tuesday, reaching 7,844.52, surpassing the August 13 intraday high of 7,830. The benchmark also ended above 7,800 for the first time.
The recovery comes after months of oil shocks, rising borrowing costs and the potential start of a Fed rate hike cycle.
The record rise is 10 year treasury Yields rose above 5.3%, the highest level since 2002. In mid-September, the Fed raised its benchmark interest rate for the first time in more than three years, signaling further increases to come.
Oil prices exceeded $100 a barrel in early March for the first time since 2022, as the Iranian conflict disrupted energy supplies through the Strait of Hormuz. After falling below $70 per barrel, it rose back above $100 in early September.
“At the end of the day, oil and bond yields are correlated, but so are the stock market and profits. And if there are profits, and they always have been, the stock market will be resilient, even if the economy is a little mixed,” Sean Snyder, economic strategist at Potomac Fund Management, told CNBC.
Unlike previous records this year, this stock rally was narrowly led by a small number of stocks linked to AI hype and seen as immune to macroeconomic headwinds.
“When traders take a break from the noise (much of which has been negative in recent months) and take a closer look at what’s happening in the markets, it becomes clear that the U.S. stock market is a great place to park their money compared to other places,” said J. J. Kinahan, senior vice president of retail and alternative investments at Cboe Global Markets. “It’s hard to argue with the mostly positive risk-reward ratio we’ve seen for decades.”
The so-called Magnificent 7, that is, Nvidia, alphabet, Amazon, apple, meta, microsoft and tesla It accounts for more than 34% of the S&P 500’s market capitalization.
“Given that there is such a wide range among a small number of stocks, it’s clear how much the daily movements of these stocks determine the direction of the S&P 500 and Nasdaq, both of which are at record levels today,” Kinahan said.
Demand for chips and equipment is increasing as tech companies invest heavily in data centers and computing infrastructure. Amazon announced earlier this year that it expects to spend about $200 billion in capital spending across its businesses in 2026, citing opportunities in AI, chips, robotics and more.
Investor appetite for ambitious technology investments was also evident in June, when SpaceX raised $75 billion in the largest IPO in history and began trading on June 12. The debut marks another milestone as investors continue to support growing companies despite rising energy prices and borrowing costs.
Looking ahead, however, Mr. Snyder of Potomac Fund Management warned that the “weakness” in market breadth could be prolonged if there are no signs that inflation is easing or that the Federal Reserve is meeting its mandate. The central bank is scheduled to publish the minutes of its September meeting on Wednesday.
Snyder said the market “may look relatively calm, but there’s still something going on beneath the surface that may not be so calm.”
Correction: The yield on the 10-year U.S. Treasury rose above 5.3% on Monday, the highest level since 2002. The previous version incorrectly listed the year.
