Market Rallies on Mega-Cap Strength, Nasdaq Hits New Record

The new week began with a strong showing from the market’s largest players, pushing the Nasdaq Composite (+0.9%) and the S&P 500 (+0.5%) to fresh all-time intraday and closing highs. The DJIA (+0.1%) lagged behind, underscoring the uneven nature of the advance. Gains were concentrated in a handful of mega-cap names, once again highlighting their outsized role in driving index performance.

Tesla (TSLA 410.04, +14.10, +3.56%) surged after reports revealed that CEO Elon Musk purchased about 2.6 million shares worth nearly $1 billion—his first open-market buy since February 2020. Although the stock closed well below its session highs, the move added momentum to Tesla’s strong September run and helped lift the consumer discretionary sector (+1.1%).

The biggest boost came from the communication services sector (+2.3%), propelled by Alphabet’s (GOOG 251.76, +10.38, +4.30%) breakout to new records. Alphabet’s rally pushed its market value past $3 trillion, making it only the fourth U.S. company to achieve that milestone. Amazon (AMZN 231.43, +3.28, +1.44%), Meta Platforms (META 764.70, +9.11, +1.21%), and Microsoft (MSFT 515.36, +5.46, +1.07%) also contributed, helping the Vanguard Mega Cap Growth ETF close with a 0.9% gain.

Technology stocks were more subdued overall (+0.8%), with NVIDIA (NVDA 177.75, -0.07, -0.04%) little changed after Chinese regulators accused the company of violating anti-monopoly rules—a charge NVIDIA disputed. Still, optimism in the sector persisted, led by Seagate (STX 211.12, +15.13, +7.72%) and Western Digital (WDC 102.39, +4.73, +4.84%), both climbing as demand for large-capacity drives used in AI storage surged.

In total, five S&P 500 sectors finished higher, with industrials (+0.5%) and utilities (+0.2%) joining the leaders. Losses were concentrated in consumer staples (-1.2%), health care (-1.0%), and materials (-0.8%), all of which fell by more than half a percentage point. Importantly, while the market-weighted S&P 500 rose, the equal-weighted version declined (-0.2%), showing just how dependent the rally was on a select group of mega-cap stocks.

Trading volume was below average, signaling investor caution ahead of this week’s FOMC meeting. With a quarter-point rate cut already fully priced in, homebuilders retreated in what appeared to be early “sell-the-news” positioning, leaving the iShares U.S. Home Construction ETF down 1.3%.

Smaller-cap stocks were mixed, with the Russell 2000 gaining 0.3% while the S&P MidCap 400 slipped 0.1%.

On the geopolitical front, Washington and Beijing announced a framework deal for TikTok’s transition to U.S. ownership, with a scheduled call between Presidents Trump and Xi later this week to finalize discussions.

Our FTinvest 11 model portfolio showed mild weakness today, slipping 0.23% to close at 856.11. After several strong sessions that pushed the index to record highs, today’s pullback reflected a pause rather than a meaningful reversal.

The index spent most of the session trading just below its recent peak, unable to generate fresh momentum but still managing to hold well above the key 850 threshold. Compared to its recent run of strong advances, today’s move was modest, signaling a market in consolidation mode.

Despite the decline, the index remains near its record levels, and its recent performance highlights the underlying resilience of the portfolio. Even with today’s retreat, the FTinvest 11 is positioned strongly, and attention will now turn to whether it can regain upward momentum later in the week.