The Dow Jones Industrial Average surged on Monday, defying the rise in Treasury yields. Famed fund manager Cathie Wood took advantage of the market pullback to scoop up potential bargains for Ark Invest. In the meantime, Microsoft and Amazon.com joined a prestigious list of stocks, indicating positive market sentiment. However, Tesla experienced a significant plunge.

Noteworthy stocks such as Ollie's Bargain Outlet, FTAI Aviation, and NetEase showcased strength as they eyed entry points, having built bullish bases. This positive trend occurred as Treasury yields increased, ahead of the Federal Reserve's meeting. The FOMC gathering, scheduled for Tuesday and Wednesday, will conclude with Federal Reserve Chair Jerome Powell's speech. The 10-year yield rose by 4 basis points to 4.88%, while the two-year yield climbed 4 basis points to 5.05%. It's important to note that the yield curve remains inverted.

Moreover, the Treasury's announcement of plans to borrow $776 billion in the last quarter of 2023 fell slightly below Wall Street expectations, which anticipated around $800 billion, according to JPMorgan Chase analysts.

Edward Moya, a senior market analyst at Oanda, pointed out that U.S. stocks were rallying as concerns about escalating tensions eased. This sentiment is perhaps reflected in the 1.2% increase in the tech-heavy Nasdaq. However, semiconductor company ON Semiconductor faced a setback, plummeting approximately 21.8% after disappointing Wall Street with a lower-than-expected earnings outlook.

The S&P 500 also enjoyed a 1.2% surge, with Western Digital leading the charge by soaring 7.3% following the announcement of its plans to spin off its flash memory business and focus on its hard-drive sector.

While the small-cap sector underperformed, the Russell 2000 managed a 0.6% rise. Growth stocks also lagged behind the major indexes, with the Innovator IBD 50 ETF rising only 0.7%.

Among the major indexes, the Dow Jones Industrial Average fared particularly well, closing 511 points higher, indicating an increase of 2%. The rise in the Dow was driven by a flurry of buying in McDonald's stock, which ended the session 1.7% higher. McDonald's reported a beat in earnings and revenue, with a notable rise in global same-store sales.

Nike emerged as the top gainer on the Dow Jones, climbing 3.9%, while Verizon Communications and Goldman Sachs also experienced solid gains, rising 3.5% and 3.8% respectively. In contrast, Walgreen Boots Alliance, the worst performer on the index, fell by only 0.2%.

Cathie Wood of Ark Invest took advantage of recent market pullbacks, acquiring shares of payments stock Block late Friday. However, the stock fell 2% on Monday, prolonging its decline of over 39% in 2023. ARK Innovation ETF also added shares of Beam Therapeutics and Verve Therapeutics, with both stocks experiencing mixed performance for the year.

Two prominent companies, Microsoft and Amazon.com, secured their places on the IBD Leaderboard Watchlist. Microsoft is forming a new handle entry and constructing a base, eyeing a potential entry point of 346.20. Additionally, Amazon.com intends to clear a double-bottom base, with an ideal entry point of 134.48. It is essential to note that while these stocks joined the Leaders Watchlist, the timing of their purchase should be carefully considered given the current market conditions.

Amid the market's positive trajectory, Tesla stock stood out as a notable laggard, experiencing a 4.8% plunge and closing near its day's lows. The stock has also fallen below its 200-day moving average.

Aside from the Dow Jones, other noteworthy stocks showcased strength. Ollie's Bargain Outlet saw its relative strength line reach new heights as it built a flat base. FTAI Aviation inched closer to a flat base buy point, while gaming software company NetEase saw its relative strength line hit new highs as it also built a flat base.

Investors are advised to carefully build their watchlist during these challenging market conditions. IBD recommends buying stocks with strong earnings and price performance, focusing on leaders in robust industries with superior earnings growth and sales.

The market remains dynamic, and investors should stay tuned for further analysis of growth stocks by following Michael Larkin on X (formerly known as Twitter) at @IBD_MLarkin.