Stocks Climb Near Records as Buyouts and Easing Inflation Fuel Market Rally

Global stock markets advanced on Monday, with U.S. shares nearing record highs as inflation concerns eased and major buyout deals boosted investor confidence. The S&P 500 rose 0.7%, pulling within 0.3% of its summer peak, while the Nasdaq composite set a new record with a 1.1% gain. The Dow Jones Industrial Average added 0.2%. Notable gains were driven by PTC, which surged 33.5% after Schneider Electric agreed to acquire it for $22.6 billion, and RXO, which jumped 22.5% following a buyout announcement by C.H. Robinson Worldwide. Both deals highlighted the growing influence of artificial-intelligence technology, lifting AI-related stocks like Nvidia, which climbed 2.1%.

Trading was relatively subdued as markets awaited the start of the latest earnings reporting season. Analysts anticipate nearly 30% year-over-year profit growth for S&P 500 companies, marking the third consecutive quarter of over 25% growth. Despite economic challenges, strong corporate earnings have supported the market's rally near all-time highs. The S&P 500 closed at 7,773.95, the Dow at 51,267.90, and the Nasdaq at 27,477.31.

Oil prices fell as uncertainty over the Iran war's impact on global crude supply persisted. Brent crude settled at $100.32, down 1.9%, after fluctuating between $100 and $103. Rising oil prices have contributed to higher bond yields, with the 10-year U.S. Treasury yield reaching 5.31%, near its highest level since 2002. High yields could slow economic growth by increasing borrowing costs and reducing investor appetite for stocks.

A mixed report on U.S. economic activity showed continued growth in services industries, though at a slower pace than expected. The report also indicated faster inflation for materials and services, raising concerns about future price increases. Wall Street anticipates at least one more interest rate hike by the Federal Reserve this year to combat inflation. Internationally, Japan's Nikkei 225 surged 2.4% on strong tech stocks, while France's CAC 40 fell 0.8% amid worries over government debt.