Stocks Gain Ground Amid M&A Activity and Crude Oil Decline
The S&P 500 Index (SPY) rose by +0.44% today, while the Nasdaq 100 Index (QQQ) gained +0.63%. The Dow Jones Industrial Average (DIA) was the exception, slipping by -0.13%. December E-mini S&P futures (ESZ26) and Nasdaq futures (NQZ26) also climbed, up +0.41% and +0.60%, respectively.
Stocks received a boost from merger and acquisition (M&A) activity, including Schneider Electric's $22.6 billion agreement to buy PTC Inc. (PTC) and C.H. Robinson Worldwide's (CHRW) $5.8 billion deal for RXO. Additionally, a -1% drop in WTI crude oil prices eased inflation expectations, lifting market sentiment. Strength in the Magnificent Seven technology stocks further supported the market.
However, rising bond yields limited gains as the 10-year T-note yield climbed +4 basis points to 5.31%. This followed a higher-than-expected rise in the ISM services prices paid sub-index to a four-year high of 74.0. The broader ISM services index fell slightly to 54.9, missing expectations of 55.0.
Crude oil prices faced pressure after Saudi Aramco reduced its Arab Light crude price to Asian buyers by $5 a barrel. Meanwhile, markets are pricing in a 22% chance of a +25 basis point Fed rate hike at the next FOMC meeting on October 27-28. Overseas, the Euro Stoxx 50 edged up +0.05%, while Japan's Nikkei-225 rallied to a three-month high.