Equities: Broad catch-up as yields back up – Danske Bank

Danske Research Team report that Equities moved higher on Monday, with the Nasdaq hitting a fresh record and the S&P 500 just 0.3% below its own peak. Gains occurred despite another backup in long‑term yields, with positive market breadth and an unusual sector mix. The move is described as a broader catch‑up session rather than classic risk‑on or inflation‑relief buying.

Nasdaq at record in atypical sector rally

"Equities moved higher on Monday and finished not far from session highs. The Nasdaq even reached a fresh record, while the S&P 500 is just 0.3% below its own."

"The main takeaway from yesterday's market action was that equities rose despite another backup in long-term yields. Unlike last week, gains were not driven solely by technology stocks, as market breadth was positive as well."

"However, the sector mix was unusual, with materials, communication services, energy, and banks among the outperformers. Defensives such as healthcare and consumer staples were also strong, while industrials and real estate lagged."

"Hence, this was neither a classic risk-on move nor inflation-relief. Rather, it appeared to be a broader catch-up session without clear directional drivers, other than the fact that parts of the market have remained sidelined for too long."