Nasdaq leads as US stocks extend rally while Treasury yields fall

NEW YORK - Wall Street stocks extended a heady run on 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 became 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 interest 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."