Morning Bid: Le Pendulum

• Nasdaq rose more than 1% while Treasury yields hit 2002 highs, with Nvidia approaching a $6 trillion market cap amid AI cross-financing activity between tech companies
• September ISM services survey showed slight expansion but price inputs reached four-year highs, suggesting AI-driven growth is generating inflationary pressures
• Brazil's Bovespa stock index posted its largest daily gain since 2020, reaching a record high after first-round election results set up an October 25 runoff between Flavio Bolsonaro and Lula da Silva

Market Summary: Tech Stocks Rally Despite Rising Bond Yields

Key Market Movements

US tech stocks demonstrated resilience on Monday, with the Nasdaq jumping over 1% despite long-term Treasury yields surging to levels not seen since 2002. This unusual divergence occurred without clear catalysts, though markets anticipate strong Q3 earnings driven by continued AI-fueled economic expansion.

Sector Highlights

Technology: Nvidia is approaching a $6 trillion market cap, while AI cross-financing activity accelerated among tech companies. The AI-driven growth narrative remains intact heading into earnings season.

Services: The September ISM services sector survey showed modest headline results, but the price input component reached a four-year high, signaling inflationary pressures.

International Developments

Europe: French bond markets stabilized following government spending cut announcements. Spain scheduled snap elections for November 29, adding to year-end political uncertainty. The euro steadied after hitting near 18-month lows on Monday.

Brazil: Markets surged following first-round presidential election results, with right-wing candidate Flavio Bolsonaro advancing to face incumbent Lula da Silva. Brazil's Bovespa index recorded its largest daily gain since 2020, reaching a record closing high. The runoff is scheduled for October 25.

Energy: Gulf oil flows (excluding Iran) averaged 19.2 million barrels per day in September, recovering from disruptions but still below the 23.6 million bpd pre-war average.

Upcoming Catalysts

Tuesday's focus includes US August trade data, a 3-year Treasury auction, and remarks from multiple Fed officials including New York Fed President John Williams.