MPC Markets Morning Call — Tuesday 6 October 2026: Nasdaq Hits Record as Tech Powers Through Bond Storm

The Nasdaq Composite notched a record high close on Monday, rising 286 points (+1.05%) to 27,477.31, lifted by Nvidia (+2.1%) and Microsoft (+1.5%) as investors focused on a dip in oil prices and looked ahead to a bumper third-quarter earnings season. The S&P 500 gained 0.66% to 7,773.95, pulling within striking distance of its own record, while the Dow Jones added 90 points (+0.18%) to 51,267.90.

It was the Nasdaq’s second day of sharp gains after weaker-than-expected jobs data on Friday dampened expectations for an October Fed rate hike. Traders now see just a 24% chance of a hike at the October meeting, down from 70% a week ago, according to CME’s FedWatch tool. “With the economic data calendar being light and earnings about a week away, investors are really groping for anything positive to glom onto, and clearly they’re looking at lower energy prices,” said Art Hogan, chief market strategist at B. Riley Wealth.

Analysts on average see S&P 500 earnings jumping over 30% year-on-year, thanks largely to AI-related stocks, according to LSEG data. Bloomberg’s Tatiana Darie noted the upcoming season “is set to show a continued improvement in breadth, with the S&P 493 on pace to outgrow the Magnificent Seven on earnings for the first time in years.”

Treasury yields surged to fresh multi-decade highs on Monday, with the 10-year touching 5.349% — its highest level since April 2002 — before settling at 5.311% (+3.4 bp). The 30-year yield hit 5.703% intraday before closing at 5.665% (+3.5 bp). The bond sell-off has been relentless: the 10-year yield has risen for five consecutive weeks, driven by inflation worries, surging government spending and ballooning corporate AI-related borrowing.

BMO Capital Markets’ Earl Davis made the most striking call of the day, declaring that the 30-year yield crossing 6% is “inevitable” and likely to happen this month. ISM services data reinforced the concern: the headline came in at a solid 54.9, but the prices paid component surged to 74.0 — its highest reading since July 2022 — keeping the inflation debate firmly alive.

The equity market’s calm amid the bond market’s “perfect storm” is understandable given accelerating economic growth and the AI boom’s rate insensitivity, said Lisa Shalett at Morgan Stanley Wealth Management. But JPMorgan’s Mislav Matejka warned investors have gotten too bearish on stocks, with the surge in bond yields looking “increasingly stretched.”

The euro slumped to a 17-month low below US$1.12 on Monday as bond market stress in France spilled over into the wider euro area. The French–German 10-year bond yield spread has blown out to its widest level since the 2011 eurozone debt crisis, with investors dumping French bonds as the government struggles to enact an unpopular 2027 budget in a deeply divided parliament.

“The bond sell-off is seeing bigger moves in anything that is perceived in any way, shape, or form as more vulnerable, and that has seen an outbreak of euro selling that’s gathered momentum,” said Société Générale’s chief FX strategist Kit Juckes. Goldman Sachs analysts warned that “spreads do not matter for the currency until they are the only thing that matters.”

Adding to European woes, Spanish Prime Minister Pedro Sanchez called a snap election for 29 November, while Germany’s governing party suffered its worst regional election defeat in postwar history last month. BofA estimates every further 10 basis points of widening in the French–German spread is associated with a 0.4% fall in euro/dollar. With ECB Chief Economist Philip Lane warning that yield and energy “demand destruction” may limit the scope for further tightening, analysts said the euro could test US$1.10.

Oil prices slipped on Monday as recovering Middle East crude exports, a G7 emergency reserve release and a Yemeni government offensive to retake territory near the Bab el-Mandeb Strait eased supply fears. Brent settled at US$100.32/bbl (−1.89%) and WTI at US$89.43 (−1.84%). Kpler data showed Middle East crude exports reached at least 16.5 million barrels per day in September, returning to pre-Iran war levels, with around 40% of crude now bypassing the Strait of Hormuz.

But the supply backdrop remains tight. Saudi Aramco CEO Amin Nasser told the Energy Intelligence Forum that global oil inventories had fallen to “scarily thin” levels and markets would remain under pressure until the Strait of Hormuz fully reopens. Aramco unexpectedly cut its November Arab Light official selling price to Asia by US$3/bbl to a discount of US$5 to the Oman–Dubai average — the widest discount since June 2020. OPEC+ agreed to keep November production targets unchanged.