The Nasdaq-100 rose 3.3% in September while much of the U.S. stock market declined, underscoring the growing influence of a relatively small group of large technology, communications and AI-linked companies. The Russell 2000 fell 5.3%, the Dow dropped 4.1%, nine of 11 large-cap sectors ended lower and 78% of S&P 500 stocks declined. Technology gained 4.5% and communication services advanced 4.3%, the only two large-cap sectors to finish meaningfully higher, according to Nasdaq’s September review. The market split coincided with a sharp rise in borrowing costs: the 10-year Treasury yield increased 54 basis points to 5.29%, its largest monthly increase in four years. Nasdaq attributed the move to persistent inflation, higher energy prices, tighter monetary policy and heavy government and corporate debt issuance. Higher rates generally place greater pressure on smaller companies because they depend more on external financing and often borrow on less favorable terms, helping explain the Russell 2000’s worst month since March 2025 while large-cap growth stocks held up.