[Digital Today Seungah Yoo] Strong gains in AI megacaps such as Nvidia, Microsoft and Meta were cited as a reason U.S. stocks kept climbing to record highs despite a sharp rise in Treasury yields. The analysis said an unusual gap is emerging between the stock and bond markets as some megacaps pull indexes higher.

On Oct. 5 (local time), CNBC said Jim Cramer (짐 크레이머), host of the CNBC Investing Club, assessed that an unusual pattern was appearing in U.S. stocks that day.

The Nasdaq Composite rose about 1 percent to end at a record high. The S&P 500 gained 0.66 percent, rising to within 0.3 percent of its record closing high set on Aug. 13. By contrast, the 10-year U.S. Treasury yield topped 5.34 percent and the 30-year yield neared 5.7 percent. Treasury yields rose even as oil prices fell.

Cramer viewed the moves as different from prior market patterns seen after the outbreak of a war in Iran. Typically, falling oil prices ease inflation concerns and reduce upward pressure on Treasury yields, but that day the Nasdaq and S&P 500 rose as yields climbed.

Meta, Microsoft and Nvidia led the gains. Meta rose 1.9 percent, Microsoft 1.5 percent and Nvidia 2.1 percent. Nvidia, in particular, posted a record closing high for the first time since May.

Cramer pointed to the huge influence of a small number of megacaps as the backdrop for the index gains. He said of Nvidia, Microsoft and Meta, "There is considerable distortion made by very big winners." That means broader market weakness hit by rising rates is not being sufficiently reflected in the indexes as these heavily weighted stocks lift them.

As of the end of last week, Nvidia accounted for about 8.5 percent of the S&P 500, Microsoft about 5.8 percent and Meta about 2.4 percent. Their combined weight is about 17 percent. Because the indexes are calculated by market-cap weighting, the gains in these megacaps alone can drive strength in the S&P 500 and Nasdaq, the analysis said.

He also laid out drivers for the individual stocks. Cramer said Nvidia's latest chip was generating strong profits for customers. He mentioned that SpaceX is building a large computing cluster based on Nvidia and is moving to monetize it by leasing the computing capacity to AI development companies.

For Microsoft, improving investor sentiment toward its AI assistant Copilot was cited as a tailwind. Cramer said investor sentiment in Meta was supported by expectations for its personal agent app, "Muse," along with the possibility it could strengthen relationships with small and midsized businesses.

Cramer stressed that the rise in the S&P 500 and Nasdaq should not be taken as a sign of stability across the market. He said the burden from rising rates is already showing up within the indexes. Weakness in traditional defensive shares and many utility stocks was cited as an example.

Investors typically favor those shares for stable dividends, but with Treasury yields at higher levels than a few months ago, bonds are offering a relatively more attractive yield. Cramer said, "Many companies' shares will be hard to rise until interest rates reach a level where selling bonds is clearly foolish."

Possible factors behind Treasury selling were cited as the government's large borrowing needs, funding demand for data center projects and the possibility that hedge funds are short selling Treasuries. The analysis also pointed to how Treasury yields did not stay lower for even a day despite weaker-than-expected employment data released last week as an example showing pressure on the bond market.

Cramer stressed that investors should watch the bond market more closely than stock indexes when gauging the direction of U.S. stocks. "There is one conclusion. So far, bond sellers have never been foolish," he said. "They will be the ones to tell the next direction."