Stocks Rise Near Records as AI Deals and Easing Inflation Concerns Lift Markets
Global stock markets edged higher on Monday, with U.S. equities approaching all-time highs thanks to a pair of major buyout deals. The S&P 500 climbed 0.7%, bringing it within 0.3% of its summer record, while the Nasdaq composite surged 1.1% to set its own new high. The Dow Jones Industrial Average added 90 points, or 0.2%. Leading the gains was PTC, which jumped 33.5% after Schneider Electric of France announced a $22.6 billion acquisition, valuing PTC at $205 per share. The deal also boosted other software stocks, with Autodesk rising 4.5%. Meanwhile, RXO soared 22.5% following news that C.H. Robinson Worldwide would acquire the truck brokerage business for $30.25 per share, though C.H. Robinson itself fell 10.8%.
Artificial-intelligence technology played a central role in both deals, driving gains across the AI sector. Nvidia, a key player in AI chip manufacturing, led the S&P 500 higher with a 2.1% rise, while Broadcom climbed 2.1%. Analysts expect strong earnings growth for the third quarter, with forecasts suggesting nearly 30% year-over-year profit increases for S&P 500 companies. This would mark the third consecutive quarter of growth exceeding 25%, supporting the market’s near-record levels despite broader economic concerns.
The oil market remained volatile amid uncertainty over the Iran conflict’s impact on global crude supply. Brent crude prices fluctuated between $100 and $103 before settling at $100.32, down 1.9%. Rising oil prices have contributed to higher bond yields, with the 10-year U.S. Treasury yield reaching 5.31%. Elevated yields could slow economic growth by increasing borrowing costs and reducing investor appetite for stocks. The U.S. economy continues to show strength, particularly in AI data centers and consumer spending, though inflation remains a challenge.
A report from the Institute for Supply Management indicated that service-sector activity grew for the 27th straight month, though at a slower pace than expected. Input prices for services businesses also rose, signaling potential inflationary pressures. Wall Street anticipates another Federal Reserve interest rate hike by year-end to curb inflation. Internationally, France’s CAC 40 fell 0.8% due to concerns over government debt, while Japan’s Nikkei 225 surged 2.4% on tech stock strength.