Nasdaq rises as chip stocks gain, but Treasury yields hit multidecade highs

• Chip stocks advanced on strong AI demand, with Micron reporting revenue that quadrupled and profit margins reaching 87%, plus $32 billion in customer commitments
• The 10-year Treasury yield hit 5.342%, surpassing its June 2007 high, driven by rising energy costs, government borrowing, and AI infrastructure investment
• Traders priced in a 63% probability the Federal Reserve would hold rates steady in October, though a December hike remained possible with inflation above the 2% target

Market Summary: Nasdaq Rises on Chip Gains Despite Treasury Yield Surge

Key Market Movements

US equities opened higher Thursday, with the Nasdaq Composite gaining 0.45% (125 points), S&P 500 up 0.23%, and Dow Jones adding 0.38%. The advance was driven by strong performance in AI-related chip stocks and consulting firms, though multidecade-high Treasury yields posed significant headwinds.

Sector Performance

Semiconductors: Micron led chip stock gains with strong AI memory demand, securing $32 billion in customer commitments. Revenue quadrupled with profit margins hitting 87%. Other chip stocks advanced: Nvidia +0.47%, Lam Research +2.03%, alongside gains in AMD and Broadcom. Alphabet rose 1.49% after unveiling its Gemini 4 AI model.

Consulting: Accenture surged 22% on above-estimate revenue guidance, lifting peers Cognizant (+11%) and IBM (+6.3%).

Energy/Infrastructure: Constellation Energy gained 5% on a 20-year Amazon power agreement. Rocket Lab added 1.4% on its largest commercial launch contract (20 launches with Synspective).

Treasury Yield Concerns

The 10-year Treasury yield reached 5.342%—its highest since 2002 and surpassing June 2007 levels—while the 30-year yield hit 5.68%. Rising energy costs (WTI crude at $90.76), heavy government borrowing, and AI infrastructure investment fueled rate concerns.

Fed Outlook

Markets priced in a 63% probability of unchanged rates in October, though December hikes remain possible with inflation above the Fed's 2% target. Weekly jobless claims and layoffs declined, indicating labor market stability.

Context

September saw Nasdaq outperform (+1.9%) versus S&P 500 (-0.5%) and Dow (-4.3%), continuing AI-driven technology leadership entering Q4.