On Monday the Nasdaq Composite rose roughly one percent to close at a fresh record, while the S&P 500 added 0.66 percent and finished just 0.3 percent shy of its August-13 high. The rally occurred as Treasury yields climbed to multi-year peaks, with the 10-year rate topping 5.34 percent and the 30-year nearing 5.7 percent, even as oil prices slipped.
Jim Cramer of CNBC argued that a small group of artificial-intelligence leaders is concealing the strain from rising yields, creating an unusual split between equities and bonds. He pointed to Nvidia, Microsoft and Meta as the primary distorting forces, noting that their combined weight approaches 17 % of the S&P 500, with Nvidia alone representing about 8.5 %, Microsoft roughly 5.8 % and Meta near 2.4 %.
According to Cramer, each of the three firms possesses a distinct growth driver that can sustain buying pressure. Nvidia’s newest chips are powering large computing clusters for SpaceX, which also rents the capacity to other AI developers. Microsoft benefits from improving sentiment around its Copilot assistant, while Meta’s Muse personal-agent app is generating enthusiasm for deeper engagement with small businesses.
The surge in the major indexes masks weakness elsewhere, Cramer noted, especially among traditional defensive stocks and many utilities. Higher bond yields now offer more attractive payouts, reducing the appeal of income-focused equities. This underlying pressure suggests that the broader market remains vulnerable despite the headline-level gains.
Cramer attributed the ongoing Treasury sell-off to several factors, including the government’s sizable borrowing needs, robust demand for financing data-center projects, and hedge-fund short positions in bonds. He also observed that a softer-than-expected jobs report, which normally would lower expectations for further Fed tightening, provided only fleeting relief to yields.
The host cautioned that the current strength of the S&P 500 and Nasdaq should not be taken as a green light, arguing that the bond market will likely signal the next move for Wall Street. He noted that bond sellers have not been foolish and placed his money on bond traders to indicate future direction.