Nasdaq Composite and Nasdaq 100 Power US Stocks Higher

The Nasdaq Composite added 1.05%, with five of the Magnificent Seven stocks moving higher, while the Dow posted a smaller gain.

Monday's session saw US stocks finish higher, paced by the Nasdaq Composite. The S&P 500 and Nasdaq 100 also recorded decent increases, and the Dow, though trailing, ended the day in the black.

Expectations around corporate profits and ongoing enthusiasm for mega-cap tech names provided support. The softer jobs data from Friday also lowered the likelihood of a Fed rate increase this month. Nvidia and Microsoft helped drive the day's gains.

The advance was not universal. Apple and Amazon declined, and Intel along with some AI infrastructure stocks lost ground. Broader-market buying did not lift every tech name.

U.S. stock closing levels

• The Dow Industrial Average ended at 51,273.12, up 91.01 points or 0.18%.

• The S&P 500 closed at 7,773.96, rising 51.25 points or 0.66%.

• The Nasdaq Composite finished at 27,477.31, gaining 286.45 points or 1.05%.

• The Russell 2000 settled at 2,847.14, up 14.24 points or 0.50%.

• The Nasdaq 100 ended at 31,076.44, advancing 268.51 points or 0.87%.

The Russell 2000 also rose but its percentage increase was less than half that of the Nasdaq Composite. Mega-cap tech stocks continued to be the market's strongest segment.

Earnings optimism versus interest-rate pressure

Traders maintained their focus on upcoming earnings reports, though the bond market posed a continuing threat. Treasury yields remained high despite Friday's weaker employment data. Elevated borrowing costs can squeeze corporate margins and reduce investors' appetite for rich valuations.

This means investors must balance earnings growth potential against rate risk. Monday's advance indicated that, for now, buyers were ignoring that risk. The key question is whether corporate results can justify that confidence.

Wednesday's release of the Federal Reserve minutes will offer another chance to gauge central bankers' views on inflation and rates.

Magnificent Seven: Five gain, two drop

• Tesla rose 2.18% to $378.69.

• Nvidia gained 2.12% to $238.90.

• Meta Platforms advanced 1.90% to $741.90.

• Microsoft added 1.48% to $525.18.

• Alphabet climbed 0.86% to $346.47.

• Amazon slipped 0.05% to $251.40.

• Apple declined 0.24% to $332.89.

Tesla and Nvidia paced the group, with Nvidia finishing at a new record high. Microsoft and Meta also bested the S&P 500's performance, while Apple and Amazon missed out on the rally.

Other notable gainers

The list of winners included stocks from biotechnology, storage, software, medical technology and materials sectors:

• Moderna advanced 6.95% to $203.21.

• Western Digital gained 6.35% to $441.64.

• Shopify rose 5.76% to $160.11.

• AppLovin added 5.13% to $281.97.

• Alibaba climbed 4.68% to $110.80.

• Intuitive Surgical increased 3.71% to $406.48.

• Alcoa gained 3.69% to $43.50.

• Astera Labs rose 3.43% to $362.34.

Significant decliners

Despite the positive index performance, several stocks posted substantial losses:

• Lennar dropped 6.73% to $74.44.

• Chipotle Mexican Grill fell 4.67% to $30.85.

• Nebius Group declined 4.22% to $232.57.

• Bristol Myers Squibb slipped 3.84% to $58.80.

• Merck lost 3.30% to $139.54.

• Corning retreated 2.93% to $159.38.

• Credo Technology dropped 2.82% to $212.48.

• Intel fell 2.63% to $116.19.

• CoreWeave declined 2.48% to $87.40.

• United Airlines fell 2.23% to $110.00.

The divergence in tech was notable. Nvidia and Astera Labs gained, while Intel, Credo, Nebius and CoreWeave fell. Investors kept distinguishing among specific names inside the technology sector.

European equities: France lags

Most European stock markets rose, but France was an outlier:

• German DAX rose 0.09% to 25,254.22.

• France CAC 40 fell 0.80% to 7,834.11.

• UK FTSE 100 added 0.34% to 10,497.95.

• Spain IBEX 35 climbed 1.12% to 19,299.69.

• Italy FTSE MIB gained 0.66% to 50,818.39.

France stayed in focus as investors doubted that a deeply split parliament could achieve credible deficit cuts before the 2027 presidential election. The budget plan presented last week did not calm bond markets, given worries that electoral politics will complicate spending discipline. Marine Le Pen's possible election win adds further doubt about the fiscal outlook.

That unease led investors to require a higher premium on French bonds. The 10-year yield climbed to about 4.92% early Monday, then eased to roughly 4.86%, a decline of about one basis point. Yields are still high after hitting almost 5% on Friday, when the spread over German bonds expanded to its widest since 2011.

The worry for market participants is that France's fiscal issues could spill over into other European sovereign debt markets. Higher funding costs can weigh on companies and equity valuations, and the political uncertainty creates further drag on the euro. Spain added to the anxiety after Prime Minister Pedro Sánchez called a snap election for November 29 following legislative losses on housing policy.

Trading lesson: Index gains do not guarantee individual stock rises

Monday's session provides an instructive example for novice traders. An index represents the aggregate performance of its members, and large-cap stocks can heavily sway its movement. The Nasdaq may climb over 1% even as specific tech stocks decline steeply.

Look at the broad market to gauge the environment, then rely on the stock's own technical levels to frame a trade. Is the price trading above or below its important moving averages? Is resistance intact? Did a breakout generate additional buying?

A robust market can aid buyers, but each stock must demonstrate its own strength. Determine your risk, cap it and accept it.

Related analysis

• Bond yields remain the market's pressure point even after soft US jobs report
• Week ahead: ISM services, Fed minutes and Canadian jobs lead the economic calendar. Be aware.