Wall Street opened the week leaning hard into the artificial-intelligence trade, pushing the Nasdaq Composite to a record close even as a relentless climb in bond yields threatened to sap the rally of its momentum. The Nasdaq added roughly 1% on Monday to finish at its highest level ever, while the S&P 500 rose about 0.7% and the Dow Jones Industrial Average edged up 0.2%, according to Yahoo Finance's live market coverage of the session.
Nvidia shares pushed to a fresh all-time high, the latest leg in a run that has repeatedly carried the chipmaker's market value back above $5 trillion this year. SpaceX, which has traded on Nasdaq since its listing earlier this year, jumped as much as 7% intraday after Morgan Stanley analyst Adam Jonas reiterated his "overweight" rating and $300 price target on the stock, arguing the shares looked unusually cheap ahead of the company's next Starship test flight. Taiwan Semiconductor Manufacturing Co. touched an intraday record after Elon Musk said the chipmaker was in early talks about collaborating on Terafab, the roughly $20 billion chip-fabrication venture he unveiled earlier this year to supply Tesla, SpaceX and xAI; Intel shares slipped about 2% on the news.
"We think that over the next few weeks, ahead of Starship Flight 15, investors can take advantage of a unique opportunity to buy shares that look unusually cheap."
— Adam Jonas, Morgan Stanley analyst
A Bond Market Sounding an Alarm
The enthusiasm for chip and AI-infrastructure stocks came against an increasingly uneasy backdrop in government debt markets. The yield on the 10-year Treasury note climbed to roughly 5.3% Monday, its highest level since 2002, as investors demanded more compensation for a mix of sticky inflation, heavy federal borrowing and a US government shutdown that began Oct. 1 and has disrupted the normal flow of official economic data. With the Bureau of Labor Statistics unable to publish its regular employment and inflation reports, traders have leaned more heavily on private gauges such as Monday's ISM services survey, which showed activity cooling slightly to 54.9 from 55.4 in September even as the report's prices-paid index climbed to 74 from 72.6 — a sign that cost pressure in the dominant services side of the economy has not eased.
"The market has had every reason to sell off, and it hasn't sold off yet, and to me it feels like it's running out of time."
— Sean McLaughlin, chief options strategist, All Star Charts
Chips Lead, But the Rally Has Grown Narrow
Monday's advance extended a pattern that has defined much of 2026: a handful of companies tied to AI infrastructure — chipmakers, data-center developers and the hyperscale cloud providers building out computing capacity — accounting for an outsize share of the market's gains. Those companies have continued to announce multibillion-dollar commitments for GPUs, power and data-center capacity over the past year, and Monday's moves in TSMC and SpaceX were the latest sign that investors remain willing to bid up any company seen as a beneficiary of that spending wave, even as the rally's breadth beyond those names stays thin.
That narrowness is part of what has some strategists nervous. A sustained climb in long-term yields raises the discount rate applied to future profits, a dynamic that weighs disproportionately on richly valued growth stocks even as, so far, it has done little to slow the AI trade itself. Monday's session suggested investors are for now treating the bond selloff as a macro story to watch rather than a reason to rotate out of the stocks driving the market higher.
Attention this week turns to the Federal Reserve, which meets later this month, and to the opening of third-quarter earnings season, when large banks and, in the following weeks, the megacap technology companies at the center of the AI buildout will report results investors will parse for signs that spending commitments are showing up — or falling short — in the numbers. The government shutdown, which has furloughed federal workers and frozen the release of official economic data, remains an added source of uncertainty that few traders expect to see resolved quickly.
