Chips lift the Nasdaq 2% even as the 10-year climbs past 5%
The Nasdaq rose 2.06% as $CRDO, $CDNS and $INTC led chips, even as the 10-year yield jumped 16 bp to 5.17%. $MU earnings and PCE inflation land Wednesday.
YieldCove Desk
3 min read
S&P 500
7,743.41
+1.21% on the week
Nasdaq
27,068.72
+2.06% on the week
Dow
51,828.62
+0.28% on the week
Russell 2000
2,837.55
-0.80% on the week
VIX range
14.12–16.57
Closed at 14.87
10-year yield
5.17%
+16 bp on the week
What you need to know
- The 10-year Treasury yield rose 16 bp to 5.17%, near its highest since 2007. Every stock is now priced against 5% cash. - Chip stocks carried the market anyway: the Nasdaq gained 2.06% and tech was the best sector, up 3.5%. - The Fed sounded ready to hike again in October, and $MU earnings plus the PCE inflation report land on Wednesday.
Chips carried stocks while rate-sensitive sectors sank
The S&P 500 rose 1.21% to 7,743.41, its first winning week in three, and sits about 0.7% below its record. The Nasdaq did better at +2.06% and set a record close of 27,122.09 on Monday. The Dow added just 0.28%, and small caps lost 0.80%.
Almost all the gain came on Monday, when chip stocks ripped higher and oil fell on hopes for Iran talks. The rest of the week was a tug of war between rising yields and strong AI news. Money moved out of bond-like sectors and into tech.
| Sector | Week | Why |
|---|---|---|
| Technology ($XLK) | +3.51% | Chip rally led by $INTC, $CRDO and $CDNS |
| Communication services ($XLC) | +1.92% | $META's Muse AI rally |
| Health care ($XLV) | +1.38% | Defensive buying |
| Financials ($XLF) | -1.86% | Higher rates weighed on lenders |
| Energy ($XLE) | -3.50% | WTI crude fell about 7% |
| Utilities ($XLU) | -3.83% | Bond-like payouts lose appeal at 5% yields |
Bond yields hit a 19-year high, and the Fed wants another hike
The 10-year yield climbed from 5.01% to 5.17%, with a 5.18% close on Thursday, the highest since 2007. The 2-year rose 5 bp to 4.81%. The trigger was a red-hot business survey: the S&P Global flash composite PMI hit 58.4, a 62-month high, with input costs rising at the fastest pace in four years.
Two weak auctions added fuel. The 5-year note cleared at 5.033% with one of the biggest tails on record, and the 7-year cleared at 5.085%, the highest since 1993. The 30-year mortgage rate hit 7.03% in Freddie Mac's weekly survey.
Fed officials leaned hawkish. Governor Michael Barr said "further policy adjustments are likely to be needed." New York Fed President John Williams called one more hike by year-end "a reasonable way of thinking about it." Futures priced as much as a 77.5% chance of an October hike on Thursday. The Fed already raised rates to 3.75%–4.00% on Sept. 16.
Oil fell on Hormuz talks, and that gave stocks room
WTI crude fell about 7% on the week to $92.41, as U.S. and Iranian negotiators discussed a phased deal to reopen the Strait of Hormuz. Brent settled at $104.32, so the gap between the two is near its widest since May. Houthi missile attacks on Saudi Arabia on Thursday caused only a brief spike.
Xi Jinping's state visit to Washington ended with the U.S.–China trade truce extended to Jan. 10, but no deal on chips. The dollar index gained about 1% to 101.03, helped by the hike talk.
The week in 5 points
- Hot data: the flash PMI hit 58.4, jobless claims fell to 197,000 and new home sales jumped to 684,000.
- Durable goods orders were flat in August against an expected drop, and core capital orders rose 1.6%.
- Consumers are gloomy: Michigan sentiment finished September at 48.1, and one-year inflation expectations rose to 4.6%.
- $AKAM signed an $11.6 billion, seven-year computing deal with Anthropic, a sign AI capacity spending is still growing.
- Costco ($COST) beat with $6.75 in earnings per share, while Paychex ($PAYX) fell 12.7% on the week after its report.
Your watchlist this week
| Ticker | Week | Why |
|---|---|---|
| $CRDO | +19.94% | Eight-day winning streak; showed new 1.6T optical parts at the ECOC conference on Monday |
| $CDNS | +15.28% | Up every day; expanded its AI chip-design partnership with TSMC on Thursday |
| $RKLB | +14.53% | Cantor reiterated Overweight with a $122 target after its 96th Electron launch |
| $INTC | +13.26% | Jumped 12.1% Monday in a CPU-led chip rally, then gave back 3.45% Friday |
| $META | +12.90% | Muse AI app hit No. 1 and Wells Fargo lifted its target to $796; fell 3.33% Friday |
| $AKAM | +9.01% | $11.6B Anthropic deal; Friday's high of $128.46 faded to a $113.94 close |
| $BE | +8.64% | Rose 8.2% Friday after Oracle reaffirmed its 2.4 GW fuel-cell contract |
| $ORCL | -7.13% | Force majeure notice on its Project Jupiter data center in New Mexico |
For wheel sellers
The VIX spent the week between 14.12 and 16.57, so index premium stays thin. The fat premium is in single names that moved 10% to 20% in a week, like $CRDO and $CDNS, and it is fat because they can move that far back. With T-bills paying close to 5%, a short put has to beat that cash clearly, and $MU's report on Wednesday can swing every chip name in your book.
Next week
| Time (ET) | Event | Why it matters |
|---|---|---|
| Mon 8:15–13:25 | Fed's Bowman, Barr and Cook speak | More hike talk would lift yields again |
| Tue 10:00 | JOLTS job openings (Aug.) and consumer confidence | How tight the job market still is |
| Wed 8:30 | PCE inflation (Aug.) and Q2 GDP, third estimate | The Fed's favorite inflation gauge |
| Wed after close | $MU fiscal Q4 earnings | The big AI memory test for chip stocks |
| Thu 10:00 | ISM manufacturing (Sept.) | Checks the hot PMI reading |
| Thu 13:30 | Fed Vice Chair Jefferson on the economy and policy | The clearest October signal of the week |
| Thu after close | Nike ($NKE) earnings (estimated) | A read on the consumer |
| Fri 8:30 | September jobs report | The last big test before the Oct. 27–28 meeting |
Sources
- [1]How major US stock indexes fared Friday, 9/25/2026 — AP via WTOP · Accessed 2026-09-25 · Tier 2
- [2]How major US stock indexes fared Friday, 9/18/2026 — AP via WTOP · Accessed 2026-09-25 · Tier 2
- [3]S&P 500, VIX, Russell 2000 and Dow (DJX) delayed quotes and daily history — Cboe · Accessed 2026-09-25 · Tier 1
- [4]Nasdaq Composite, sector ETF and watchlist closes — Nasdaq · Accessed 2026-09-25 · Tier 1
- [5]Daily Treasury par yield curve rates, 2026 — U.S. Department of the Treasury · Accessed 2026-09-25 · Tier 1
- [6]Market sees next Fed hike in October following Barr comments, hot inflation — CNBC · Accessed 2026-09-25 · Tier 2
- [7]Fed's Williams says another rate hike by year-end is reasonable — CNBC · Accessed 2026-09-25 · Tier 2
- [8]Mortgage rates average 7.03% — Freddie Mac · Accessed 2026-09-25 · Tier 1
- [9]Advance report on durable goods, August 2026 — U.S. Census Bureau · Accessed 2026-09-25 · Tier 1
- [10]New residential sales, August 2026 — U.S. Census Bureau · Accessed 2026-09-25 · Tier 1
- [11]Surveys of Consumers, September 2026 final — University of Michigan · Accessed 2026-09-25 · Tier 1
- [12]Crude oil and U.S. dollar index market data — Trading Economics · Accessed 2026-09-25 · Tier 3
- [13]Oil prices waver in face of Iran war truce and Houthi attacks — The National · Accessed 2026-09-25 · Tier 2
- [14]Trump–Xi summit takeaways — CNBC · Accessed 2026-09-25 · Tier 2
- [15]Shares of Akamai surge after deal with Anthropic — CNBC · Accessed 2026-09-25 · Tier 2
- [16]Intel surges 12% as CPU stocks rally — CNBC · Accessed 2026-09-25 · Tier 2
- [17]Meta stock soars 11% on price target increase, Muse AI downloads — Yahoo Finance · Accessed 2026-09-25 · Tier 2
- [18]Oracle data center force majeure — CNBC · Accessed 2026-09-25 · Tier 2
- [19]Bloom Energy jumps 8% as Oracle reaffirms 2.4 GW fuel cell contract — 24/7 Wall St · Accessed 2026-09-25 · Tier 3
- [20]Why is Credo Technology stock rallying today — Investing.com · Accessed 2026-09-25 · Tier 3
- [21]Rocket Lab climbs 7% as Cantor reiterates $122 target — 24/7 Wall St · Accessed 2026-09-25 · Tier 3
- [22]Costco reports fourth quarter and fiscal year 2026 results — Costco Wholesale · Accessed 2026-09-25 · Tier 1
- [23]Micron to report fiscal fourth quarter results on September 30, 2026 — Micron Technology · Accessed 2026-09-25 · Tier 1
- [24]Release schedule — Bureau of Economic Analysis · Accessed 2026-09-25 · Tier 1
- [25]Federal Reserve calendar, September and October 2026 — Federal Reserve · Accessed 2026-09-25 · Tier 1
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