S&P 500 (Tue)
7,818.93
+0.6% · record
A week ago the S&P’s high kept slipping away. On Tuesday it closed at 7,818.93, its first record since August, with the Nasdaq setting records on Monday and Tuesday. The leaders are back in charge. The question is who is following them — and this afternoon’s Fed minutes are the next test.
Last Wednesday this column was headlined for a record that kept slipping away. The S&P 500 had just given back nearly a percent in two sessions, the 10-year Treasury was pressing to 19-year highs, and every approach to the August peak was being sold. A week later the picture has flipped. The index has climbed 2.2% from last Wednesday’s close, the Nasdaq has set back-to-back records, and on Tuesday the S&P finished at 7,818.93 — its first record close since mid-August.
What changed was the data, not the bond market’s mood. Friday’s 29,000-job report pushed October hike odds below 23% and gave stocks the opening they needed. Monday and Tuesday supplied the fuel momentum traders like best: takeover premiums, and an AI story with real money behind it. But the 10-year is still hovering near 5.3%, small caps fell on the day of the record, and the global rally faded overnight. A record is a signal. It isn’t yet a trend.
It started from a bad place. On Thursday the 10-year touched 5.34%, its highest since 2002, in a global bond selloff. Friday’s weak jobs data broke that fever, and the S&P rose 0.7%. On Monday the Nasdaq hit a record and the S&P added another 0.7% to finish within 0.3% of its high, lifted by a wave of deals: Schneider Electric agreed to buy PTC for $205 a share in cash, about $22.6 billion, sending PTC up roughly a third, and C.H. Robinson agreed to buy RXO for $30.25 a share, lifting RXO more than 20% while the buyer’s shares slid. Software peers caught a bid, with Autodesk among the gainers.
Tuesday added the AI-and-power angle. Constellation Energy jumped 13.5% after signing a 20-year agreement to supply Google with 890 megawatts of new nuclear capacity from upgrades across 11 of its reactors, pulling utilities up more than 2% as Vistra and GE Vernova followed. Lamb Weston gained 7.5% on better-than-expected results. The S&P rose 0.6% to its record, the Dow added 0.5%, and the Nasdaq closed at a second straight high.
The question this column has asked for a month is participation, and this week’s answer is mixed. The good news: the rally has broadened beyond semiconductors. Utilities, industrial software and logistics all contributed, and the Dow — last week’s laggard — is up 0.7% so far this week. The less good news: the Russell 2000 fell 0.6% on the very day the S&P set its record, and it is roughly flat for the week, down 0.1%, while the Nasdaq is up 1.5%. It also remains below where it closed on Sept. 25.
That matters because small caps are the cleanest read on whether a 5.3% 10-year is a tolerable cost of capital for the average company. They carry more floating-rate debt and more domestic exposure than the mega-caps that have led this market. When the index of 2,000 smaller companies sells off on a record day, it is telling you the rally is still being financed by the largest balance sheets. That can continue. It is just less durable than a record everyone participates in.
| Momentum signal | Reading |
|---|---|
| S&P vs. record | New high — 7,818.93 |
| Leadership (Nasdaq) | Records Mon & Tue |
| Small caps (Russell 2000) | −0.6% Tue; −0.1% WTD |
| Rates (10-yr) | ~5.3% — near 2002 high |
| Deal flow | $22.6B PTC buyout leads |
| Fed (Oct hike odds) | Below 23% after payrolls |
Overnight the enthusiasm didn’t travel. Japan’s Nikkei fell 0.9%, South Korea’s Kospi dropped 2%, and Paris and Frankfurt were each down about 0.4% in early trading. Brent crude edged up 0.7% to about $101, and the euro slipped to around $1.12, a reminder that Europe’s bond markets are still wrestling with French fiscal risk. The 10-year was trading near 5.28%.
The test comes at 2 p.m., when the Fed releases the minutes of its September meeting — the one that produced a unanimous quarter-point hike to 3.75%–4.00%. The market has largely priced out an October move. Minutes that stress persistent inflation, with the ISM services prices index at 74.0 and manufacturers’ prices paid at 77.9, could push back on that and test whether the long end can stay below last Thursday’s 5.34%. Then the earnings calendar takes over: PepsiCo on Thursday, Delta on Friday, the big banks and September CPI next week. Into the close, watch two things: whether the S&P can hold above its old August high, and whether the Russell 2000 can rejoin the rally.
The S&P closed at a record 7,818.93 on Tuesday, up 2.2% from last Wednesday’s close, and the Nasdaq set records Monday and Tuesday — powered by a weak jobs report that took October hike odds below 23%, a $22.6 billion buyout of PTC, and Constellation’s nuclear deal with Google. But the Russell 2000 fell 0.6% on record day and is flat for the week, and the 10-year remains near 5.3%. This afternoon’s Fed minutes are the next test. A record that small caps don’t confirm is a leaders’ rally, not yet a broad one.