The S&P 500 Index ($SPX) (SPY) closed up by +0.66% on Monday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.18%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.87%. December E-mini S&P futures (ESZ26) rose +0.67%, and December E-mini Nasdaq futures (NQZ26) rose +0.88%.
Stock indexes settled higher on Monday, with the S&P 500 climbing to a 1.5-month high and the Nasdaq 100 climbing to a new record high. Strength in the Magnificent Seven technology stocks on Monday supported gains in the broader market. Also, M&A activity was supportive of stocks after Schneider Electric agreed to buy PTC Inc. for $22.6 billion, and C.H. Robinson Worldwide agreed to purchase RXO for $5.8 billion. In addition, Monday’s -1% decline in WTI crude oil lowered inflation expectations and improved market sentiment, boosting stocks.
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Limiting stock gains on Monday were signs of price pressures in the US services sector that boosted bond yields and are hawkish for Fed policy. The 10-year T-note yield rose to a 24-yer high of 5.35% and finished up +4 bp at 5.31% after the Sep ISM services prices paid sub-index rose more than expected to a 4-year high.
The US Sep ISM services index fell -0.5 to 54.9, slightly weaker than expectations of 55.0. The Sep ISM services prices paid sub-index rose +1.4 to a 4-year high of 74.0, stronger than expectations of 73.3.
Nov WTI crude oil prices (CLX26) fell more than -1% on Monday and were under pressure after Saudi Aramco lowered the price of its Arab Light crude to Asian buyers by $5 a barrel below a regional benchmark for November delivery, a wider cut than expectations of a $5 a barrel increase. Crude prices also fell after Saudi Arabia said crude supplies through its East-West pipeline had risen to 80% of capacity as of Saturday.
Markets are discounting a 24% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled higher on Monday. The Euro Stoxx 50 closed up +0.06%. China's Shanghai Composite did not trade, with markets in China closed for the week-long Golden Week holidays. Japan's Nikkei-225 Stock Average rallied to a 3-month high and closed up +2.40%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down -4.5 ticks. The 10-year T-note yield rose +4.4 bp to 5.315%. The 10-year T-note yield climbed to a new 24-year high of 5.347% on Monday as signs of price pressures in the US services sector weighed on T-notes. The Sep ISM services prices paid sub-index rose more than expected to a 4-year high. Also, higher inflation expectations were bearish for T-notes after the 10-year breakeven inflation rate rose to a 2.5-week high of 2.380% on Monday. In addition, supply pressures are weighing on T-notes as the Treasury will auction $119 billion in T-notes and T-bonds this week, beginning with Tuesday’s $58 billion auction of 3-year T-notes. Monday’s -1% decline in WTI crude oil prices was supportive for T-notes.
European government bond yields moved higher on Monday. The 10-year German bund yield rose +3.1 bp to 3.493%. The 10-year UK gilt yield is up +5.2 bp to 5.418%.
Eurozone Aug PPI rose +8.2% y/y, stronger than expectations of +7.6% y/y and the largest increase in 3.5 years.
The Eurozone Oct Sentix investor confidence index fell by -2.4 to 2.7, weaker than expectations of 4.2.
ECB Chief Economist Philip Lane said a measured ECB response is appropriate to control inflation as policymakers assess how a second wave of energy shocks affects the economy.
The UK Sep S&P services PMI was revised upward by +0.4 to 52.1 from the previously reported 51.7.
Markets are discounting an 13% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
The Magnificent Seven technology stocks were mostly higher on Monday, a positive factor for the overall market. Tesla (TSLA) closed up more than +2%, and Nvidia (NVDA) closed up more than +2% to lead gainers in the Dow Jones industrials. Also, Meta Platforms (META) and Microsoft (MSFT) closed up more than +1%, and Alphabet (GOOGL) closed up +0.86%. Conversely, Apple (AAPL) closed down -0.24%, and Amazon.com (AMZN) closed down -0.05%.
Software stocks moved higher on Monday, a positive factor for the overall market. Autodesk (ADSK) and Atlassian Corp (TEAM) closed up more than +4%, and ServiceNow (NOW), Intuit (INTU), and Workday (WDAY) closed up more than +1%.
Strength in cybersecurity stocks on Monday was another supportive factor for the broader market. Okta (OKTA) and Cloudflare (NET) closed up more than +3%, and Zscaler (ZS) closed up more than +2%. Also, Fortinet (FTNT), SentinelOne (S), and Gen Digital (GEN) closed up more than +1%, and Crowdstrike Holdings (CRWD) closed up +0.97% and Palo Alto Networks (PANW) closed up +0.86%.
PTC Inc (PTC) closed up more than +33% to lead gainers in the S&P 500 after Schneider Electric agreed to buy the company for $22.6 billion, or about $205 per share in an all-cash deal.
RXO Inc (RXO) closed up more than +22% after C.H. Robinson Worldwide agreed to buy the company for $5.8 billion, or about $30.25 per share.
Cerebras Systems (CBRS) closed up more than +9% after OpenAI CEO Altman said the company is “a close partner” of OpenAI.
Vylor Inc. (VYLR) closed up more than +9% after Mizuho Securities initiated coverage on the stock with a recommendation of overweight and a price target of $84.
Harley-Davidson (HOG) closed up more than +6% after Citigroup upgraded the stock to buy from neutral with a price target of $33.
C.H. Robinson Worldwide (CHRW) closed down more than -10% to lead losers in the S&P 500 after agreeing to purchase RXO for $5.8 billion.
Insmed (INSM) closed down more than -6% after announcing that CFO Bonstein will step down, effective October 30.
Lennar (LEN) closed down more than -6% after a report from Hunterbrook Media said that “Millrose Properties bought an estimated $200 million of Lennar homes in about a month and is renting them out for what appears to be a loss.”
Group 1 Automotive (GPI) closed down more than -3% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $232.
Bristol-Myers Squibb (BMY) closed down more than -3% after Leerink Partners downgraded the stock to market perform from outperform.
Earnings Reports (10/6/2026)
Apogee Enterprises Inc (APOG), Boost Run Inc (BRUN), Constellation Brands Inc (STZ), Lamb Weston Holdings Inc (LW), Neogen Corp (NEOG), Penguin Solutions Inc (PENG), RPM International Inc (RPM), Worthington Steel Inc (WS).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.