U.S. Stocks Near Record Highs on Buyout Boost

U.S. stocks climbed toward all-time highs on Monday, driven by major buyout deals that energized the market. The S&P 500 surged 0.7%, bringing it within 0.3% of its summer record, while the Nasdaq composite set a new high with a 1.1% gain. The Dow Jones Industrial Average added 90 points, or 0.2%. Two key acquisitions fueled the rally: Schneider Electric’s $22.6 billion deal for PTC, which sent PTC’s shares soaring 33.5%, and C.H. Robinson’s purchase of RXO, pushing RXO up 22.5% despite a 10.8% drop for C.H. Robinson.

Artificial intelligence (AI) played a central role in both deals, boosting stocks across the AI sector. Nvidia, a leader in AI chip technology, led the S&P 500’s gains with a 2.1% rise, while Broadcom also climbed 2.1%. Analysts anticipate strong earnings growth for the third quarter, forecasting nearly 30% year-over-year profit increases for S&P 500 companies, marking the third consecutive quarter of such robust growth.

Oil prices remained volatile due to uncertainty surrounding the Iran conflict, with Brent crude settling at $100.32 per barrel after swinging between $100 and $103. Higher oil prices contributed to rising bond yields, with the 10-year U.S. Treasury yield reaching 5.31%. Economic data released Monday showed mixed signals: the U.S. services sector grew for the 27th straight month, but at a slower pace than expected, and input prices accelerated, signaling potential inflationary pressures.

Globally, stock markets saw varied performance. France’s CAC 40 dropped 0.8% amid concerns over government debt, while Japan’s Nikkei 225 jumped 2.4%, led by technology stocks. The Federal Reserve is widely expected to raise interest rates at least once by year-end to curb inflation, following its first rate hike in three years last month.