Nasdaq leads as US stocks extend rally while Treasury yields fall

Wall Street stocks extended a heady run Monday, with tech shares leading the advance as US Treasury yields retreated and artificial intelligence stayed a hot commodity.

Analysts pointed to a successful US Treasury auction for 20-year bonds, sending yields lower and bolstering equities. 

US stocks are on track to have their best month of this year as yields have fallen and markets become more confident the Federal Reserve is done hiking interest rates.

"You certainly have a recipe for a continuation of the rally we've seen for the last three weeks," said Art Hogan of B Riley Wealth Management.

The tech-rich Nasdaq index led gains in New York. In Europe, London and Frankfurt were little changed all day before ending slightly in the red, while Paris and Milan were marginally higher.

The Fed and European Central Bank kept their rates unchanged at their last meetings, pausing their hike campaign as inflation has cooled sharply in the United States and Europe. 

The dollar continued its slide against the euro, with investors betting that US interests are more likely to fall than their European counterparts.    

"The focus has shifted to when the Fed will start cutting rates," said Fawad Razaqzada, market analyst at StoneX. 

"Previously, the market was speculating this to start after the middle of next year at the earliest. But now, the market is attaching about a 30 percent chance of a first Fed rate cut taking place in March."  

Even so, inflation remains hugely elevated in some countries, including Argentina, where libertarian outsider Javier Milei swept to victory in a presidential election Sunday.

The self-described "anarcho-capitalist" has proposed dollarization of the economy by 2025 to halt the "cancer of inflation" that has reached triple digits in the South American country. 

Observers said they expected light trading on Wall Street this week heading into the Thanksgiving holiday long weekend, with US markets closing on Thursday and finishing early on Friday.

Among companies, Microsoft shares were up 2.1 percent after the company hired OpenAI co-founder Sam Altman following his shock sacking from the startup, whose ChatGPT chatbot has led the rapid rise of artificial intelligence technology.

Microsoft CEO Satya Nadella wrote on X that Altman "will be joining Microsoft to lead a new advanced AI research team," along with OpenAI co-founder Greg Brockman and other colleagues.

Nvidia, another tech company closely identified with artificial intelligence, gained 2.3 percent ahead of its earnings report on Tuesday.

Elsewhere Monday, oil prices extended Friday's gains of more than four percent, before a meeting of OPEC and other key producers, where Russia and Saudi Arabia could extend output cuts.