The Nasdaq Composite Index closed at a record high on Oct. 5, driven primarily by gains from technology giants Nvidia and Microsoft, as investors responded to a decline in oil prices and prepared for the upcoming corporate earnings season. This marked the Nasdaq’s second consecutive day of substantial gains following weaker-than-expected U.S. jobs data released earlier in the week, which lowered the market’s expectations for an interest rate increase by the Federal Reserve in October.
Nvidia shares rose 2.1%, reaching their own record closing level and boosting the company’s market capitalization to $5.76 trillion. Microsoft’s stock increased by 1.5%, while Meta Platforms and Tesla each gained approximately 2%. The S&P 500 index also advanced 0.66%, closing at 7,773.95 points, remaining just under 0.3% shy of its August 13 record. The Dow Jones Industrial Average rose 0.18% to 33,267.90 points.
Oil prices declined after a rise in crude exports from the Middle East and a commitment by the Group of Seven (G7) nations to increase supply. Analysts noted that with few significant economic reports ahead of the upcoming earnings season, investors appeared to be focusing on the positive influence of lower energy costs. Art Hogan, chief market strategist at B. Riley Wealth, commented that investors were searching for favorable signals in a light economic data environment and were buoyed by the drop in energy prices.
The third-quarter earnings season is set to begin next week, with major U.S. banks scheduled to report results. According to LSEG data, analysts are forecasting a year-over-year increase of more than 30% in S&P 500 earnings, largely driven by gains in artificial intelligence-related companies.
Following U.S. jobs data that showed slower-than-anticipated growth in September, the likelihood of a rate hike at the Fed’s October meeting dropped from 70% to roughly 24%, based on CME’s FedWatch tool.
In merger activity, shares of PTC surged over 33% after France’s Schneider Electric announced an all-cash acquisition of the software company valued at $22.6 billion. In another deal, the stock price of logistics broker RXO jumped more than 22% following an agreement for acquisition by C.H. Robinson Worldwide in a $5.8 billion stock-and-cash transaction. However, C.H. Robinson’s shares declined nearly 11% on the news.
Other notable movements included a 9% increase in Cerebras Systems shares after OpenAI CEO Sam Altman highlighted a close collaboration between the two firms focused on advancing computing speeds.
Market breadth favored advancing issues, with advancing stocks outnumbering decliners by a ratio of 1.7-to-1 on the S&P 500. The index saw 13 new highs and 20 new lows, while the Nasdaq recorded 57 new highs against 243 new lows. Trading volume remained moderate, with 16.8 billion shares exchanged on U.S. exchanges, slightly below the 20-session average of 17.3 billion shares.