Published on: 2026-09-07
A 10-year Treasury yield near 4.8% should be a tougher backdrop for growth-heavy QQQ than for SPY. Yet QQQ is up about 17.0% in 2026 versus 12.9% for SPY through September 4, even as real long-term yields have risen materially since year-end. Faster earnings and heavier exposure to semiconductor winners explain much of that resilience, while this week’s August inflation data will test whether the gap can hold.
QQQ has gained about 17.0% in 2026 versus 12.9% for SPY through September 4, using December 31, 2025 closes as the starting point.
The 10-year inflation-indexed Treasury yield rose from 1.93% at the end of 2025 to 2.42% on September 3, showing that the rate headwind has been real as well as nominal.
More than half of Nasdaq-100 companies posted at least 20% year-over-year earnings growth in Q2, while the PHLX Semiconductor Sector Index was up about 60% YTD with earnings rising more than 60%.
Nasdaq estimates AI-related capex among Microsoft, Amazon, Alphabet and Meta is approaching $800 billion in 2026, raising the future earnings hurdle.
August PPI arrives September 10 and CPI on September 11, followed by the September 15–16 FOMC meeting.
U.S. employers added 162,000 jobs in August, far above the 56,000 increase expected in a Reuters poll, while unemployment held at 4.1%. By later Friday, short-term rate futures implied roughly a 65% chance of a September Fed hike, up from 55% before the report, while the 10-year Treasury yield was around 4.77% after briefly moving above 4.8%.
QQQ still gained 0.18% on September 4, while SPY fell 0.39%. Using the December 31, 2025 closes of $614.31 for QQQ and $681.92 for SPY, their price returns through September 4 were about 17.0% and 12.9%, respectively.
The more revealing rate comparison is the real yield. Federal Reserve data show the nominal 10-year Treasury yield rose from 4.18% at year-end 2025 to 4.77% on September 3. Over the same period, the 10-year inflation-indexed yield increased from 1.93% to 2.42%, while the 10-year breakeven inflation rate moved only from 2.25% to 2.35%.
Most of the roughly 59-basis-point increase in the nominal yield therefore came alongside a 49-basis-point rise in real yields, rather than a comparable jump in long-run inflation compensation. QQQ has outperformed despite a more direct valuation headwind for long-duration growth assets.
| Metric | Nasdaq-100 / QQQ | S&P 500 / SPY |
| 2026 ETF price return | ~17.0% | ~12.9% |
| FY1 P/E | 25.03x | 21.43x |
| Consensus mean 3–5 year EPS growth | 31.53% | 22.69% |
State Street’s September 3 index characteristics show the Nasdaq-100 still carries the richer valuation. Its long-term earnings-growth estimate is also higher. State Street says FactSet Estimates supplies the underlying estimates, while FY1 P/E is a weighted harmonic average using forecast one-year earnings per share.
More than half of Nasdaq-100 companies delivered second-quarter earnings growth of at least 20% year over year, the strongest breadth in four and a half years. More than four in five posted positive earnings growth.
Aggregate Nasdaq-100 earnings growth approached 80%, although tariff refunds and mark-to-market gains on private holdings such as Anthropic inflated the headline figure. Nasdaq’s broader finding is more useful for the QQQ-SPY comparison. Forward earnings across the major large-cap indexes have been growing faster than prices in 2026, causing P/E multiples to compress rather than expand.
Semiconductors give the clearest evidence of where part of the performance gap came from. The PHLX Semiconductor Sector Index was up about 60% YTD by September 3, while underlying earnings had risen by more than 60%. On the same date, Nvidia carried an 8.83% Nasdaq-100 weight, Micron 4.77% and AMD 3.28%.
Friday offered a useful snapshot of how those weights affect performance. Micron rose 6.1%, and AMD gained 4.69%. Using their September 3 Nasdaq-100 weights as a simple one-day approximation, those two stocks alone contributed about 0.45 percentage points before losses elsewhere, helping the index remain positive while the S&P 500 fell.
A full 4.1-percentage-point year-to-date attribution would require daily constituent weights and returns. The available evidence does not show that semiconductors and faster earnings account for every point of QQQ’s lead, although it identifies them as major contributors rather than relying on a broad claim that technology has simply stopped reacting to rates.
The AI investment cycle supports the earnings engine behind QQQ while creating a growing cash-flow test. Nasdaq estimates AI-related capex among Microsoft, Amazon, Alphabet and Meta is approaching $800 billion in 2026, with roughly two-thirds still funded from operating cash.
Microsoft generated $55.4 billion in operating cash flow in the June quarter and paid $35.8 billion in cash for property and equipment. Amazon’s trailing operating cash flow rose 33% to $161.4 billion, yet free cash flow swung to a $7.6 billion outflow as property and equipment purchases accelerated, primarily reflecting AI investment.
Large internal cash flows reduce dependence on outside financing. Rising capex simultaneously increases the revenue and profit required to justify today’s spending. For QQQ, the AI buildout remains supportive while monetisation keeps pace with the capital committed.
The Bureau of Labor Statistics will release August PPI on September 10 and August CPI on September 11. The Fed then meets on September 15–16.
Hotter inflation could reinforce expectations for another hike and push both nominal and real Treasury yields higher. A 5% nominal 10-year yield would attract attention, although the stronger warning for QQQ would be higher yields arriving alongside weaker earnings expectations.
QQQ’s advantage would look more vulnerable if three conditions emerge:
The 10-year real yield extends materially higher.
Nasdaq-100 earnings estimates begin falling.
Semiconductor earnings and price leadership weaken together.
Higher rates alone have not erased the gap. The pressure becomes harder to absorb if the earnings cushion starts shrinking at the same time.
Real yields strip out expected inflation and more closely represent the discount rate applied to future cash flows. Their 2026 increase strengthens the evidence that QQQ has faced a genuine valuation headwind.
No. Nvidia has a large weight in both benchmarks. QQQ also carries heavier exposure to semiconductor winners including Micron and AMD, alongside broader earnings growth across the Nasdaq-100.
No fixed yield guarantees a reversal. The more important combination is a further rise in real yields alongside falling Nasdaq-100 earnings estimates, weakening both valuation support and expected growth.
Yes. Yields can fall because growth expectations deteriorate. If lower yields arrive alongside weaker technology earnings forecasts, the benefit from a lower discount rate may be offset by deteriorating profit expectations.
The August inflation releases on September 10 and 11 will show whether Friday’s rate repricing extends before the Fed meeting. The more useful comparison will be what happens to real yields and Nasdaq-100 earnings expectations at the same time.
The 2026 story changes when real yields rise and earnings expectations fall together.
