U.S. Stocks Near Records on Buyout Deals and Earnings Hopes

U.S. stocks held near record highs on Monday, with the S&P 500 rising 0.5%, just 0.5% away from its all-time high set during the summer. The Nasdaq composite climbed 0.8%, on track to set its own record, while the Dow Jones Industrial Average dipped 30 points, or 0.1%. The gains were fueled by two major buyout announcements: Schneider Electric agreed to acquire PTC for $205 per share, valuing the software company at about $22.6 billion, causing PTC's stock to leap 34%. Meanwhile, C.H. Robinson Worldwide announced it would buy RXO, sending RXO's shares up 21.5% and C.H. Robinson's down 13%.

Trading was otherwise subdued as investors awaited the start of the latest earnings reporting season. Analysts anticipate nearly 30% profit growth for S&P 500 companies from July through September, which would mark the third straight quarter of growth above 25%. Despite various economic concerns, strong corporate earnings have kept stocks near record levels.

The oil market remained volatile due to uncertainty surrounding the war with Iran, with Brent crude prices swinging between $100 and $103 before settling at $101.71, down 0.5%. High oil prices have contributed to rising bond yields, with the 10-year U.S. Treasury yield climbing to 5.33%. The strong U.S. economy, driven by business spending on AI data centers and consumer spending, has also pushed yields higher, raising concerns about potential economic slowdowns.

A report on Monday provided a mixed update on the U.S. economy, showing that service industries grew for a 27th straight month but at a slower pace than expected. The report also noted faster growth in material and service costs, a potential signal of rising inflation. Wall Street expects the Federal Reserve to raise its main interest rate at least once by the end of the year to combat inflation. Abroad, France's CAC 40 fell 0.9% amid concerns over the country's debt, while Japan's Nikkei 225 surged 2.4% on strength in technology stocks.