Key Highlights

● Nvidia closed at a record of about $238.90, giving the chipmaker a Market Value of roughly $5.7 trillion.

● Broadcom rose about as much as Nvidia, and Microsoft gained after an analyst upgrade.

● The Nasdaq rally was narrow, with Intel, GlobalFoundries and AMD all falling the same day.

Nvidia climbed to a record close on Monday, Oct. 5, leading a mega-cap AI charge that carried the Nasdaq-100 and the Nasdaq Composite to fresh all-time highs.

The chipmaker sets the pace

Nvidia (NASDAQ:NVDA) rose to a record close on Monday at about $238.90, giving the chipmaker a market value of roughly $5.7 trillion. The Associated Press called Nvidia "the single strongest force lifting the S&P 500."

The gain reflected continued enthusiasm for AI leadership, with investors piling back into the biggest beneficiaries of the AI spending boom.

Nvidia's size means its moves ripple through the major indexes. It now accounts for a large slice of both the Nasdaq and the S&P 500, so a strong day for the stock gives the benchmarks a meaningful lift.

Records for the Nasdaq

The Nasdaq-100 closed at a record 31,076.44, and the broader Nasdaq Composite jumped 286.45 points to a record 27,477.31. Both indexes also set records on Friday.

The S&P 500 climbed 51.23 points to 7,773.95, just shy of its summer record. The Dow lagged, rising only 90.94 points to 51,267.90.

Broadcom (NASDAQ:AVGO) also rose about as much as Nvidia, and Microsoft (NASDAQ:MSFT) gained after Melius Research upgraded it to Buy. TSMC's (NYSE:TSM) US-listed shares rose after Elon Musk confirmed early talks with the company about his Terafab chip venture.

The rally was narrow. Intel (NASDAQ:INTC) fell on concerns that TSMC could join Terafab, a venture where Intel has been the only named Manufacturing partner. GlobalFoundries (NASDAQ:GFS) slid after a downgrade from BNP Paribas Exane, and AMD (NASDAQ:AMD) slipped.

Breadth on the Nasdaq was negative, with more decliners than advancers in some counts, showing how much the record depended on a handful of giants.

Shrugging off high yields

Nvidia's climb came despite a tough rate backdrop. The 10-year Treasury Yield rose to its highest level since 2002, as the ISM services prices-paid index hit 74.0, the highest since July 2022.

At the same time, Friday's weak September jobs report, with payrolls up just 29,000, cut bets on an October Fed hike to roughly one in four or less. That combination helped growth stocks.

Daniela Hathorn, senior market analyst at Capital.com, said: "growth stocks are rallying because Fed expectations have softened, while the Risk-Free Rate against which those valuations are judged remains exceptionally high."

Earnings in focus

Analysts expect third-quarter S&P 500 Earnings growth to be strong, largely driven by AI stocks. That expectation has kept investors leaning into names like Nvidia even as bond yields climb.

Robert R. Pires, chief Investment officer at BIAS Investors, said: "Commentary on energy prices, inflation, hiring plans, and the adoption of artificial intelligence should also give a clearer picture of where the economy is headed."

Volume across US exchanges was 16.8 billion shares, below the 20-session average of 17.3 billion. Taiwan's Foxconn, meanwhile, reported a big jump in third-quarter Revenue on AI demand, another sign of how strongly AI spending is flowing through the Supply chain.

What to watch

Earnings season is about to start. PepsiCo reports on Thursday, Delta Air Lines on Friday, and the big banks begin from Oct. 13. Investors will listen closely for comments on AI spending.

Minutes from the Fed's September meeting are due on Wednesday, Oct. 7 at 2 p.m. ET, and the Fed meets again Oct. 27 to 28. For Nvidia itself, the next major catalyst is the company's next quarterly report.