Stocks Climb Near Records on Buyout Deals and AI Optimism

U.S. stocks edged closer to record highs on Monday, driven by two major buyout announcements. The S&P 500 climbed 0.7%, pulling within 0.3% of its summer peak, while the Nasdaq composite surged 1.1% to set its own record. The Dow Jones Industrial Average added 90 points, or 0.2%.

Software company PTC soared 33.5% after Schneider Electric of France agreed to buy it for $22.6 billion, or $205 per share. The deal also lifted other software stocks, with Autodesk rising 4.5%. Meanwhile, RXO jumped 22.5% after C.H. Robinson Worldwide announced a $30.25-per-share deal to acquire the truck brokerage business. C.H. Robinson fell 10.8% for the largest loss in the S&P 500.

Both deals highlighted the promise of artificial-intelligence technology, boosting AI-related stocks. Nvidia gained 2.1%, contributing significantly to the S&P 500’s rise, while Broadcom climbed 2.1%. Trading was otherwise subdued ahead of the earnings reporting season, with analysts expecting nearly 30% profit growth for S&P 500 companies.

The 10-year U.S. Treasury yield rose to 5.31%, nearing its highest level since 2002, reflecting concerns over high oil prices and inflation. Brent crude settled at $100.32, down 1.9%, amid uncertainty over the Iran war’s impact on global crude supplies. A mixed report on U.S. services sector growth added to inflation worries, suggesting the Federal Reserve may raise interest rates again by year-end.