US Stocks Edge Closer to All-Time Highs on Buyout Deals

U.S. stocks climbed higher on Monday, nearing all-time highs after two major buyout deals boosted investor confidence. The S&P 500 rose 0.7%, pulling within 0.3% of its summer record, while the Nasdaq composite surged 1.1% to set its own record. The Dow Jones Industrial Average added 90 points, or 0.2%. The gains were led by PTC, which jumped 33.5% after Schneider Electric agreed to acquire it for $205 per share in a $22.6 billion deal. This lifted other software stocks, with Autodesk rising 4.5%. Meanwhile, RXO soared 22.5% after C.H. Robinson announced plans to buy the truck brokerage business for $30.25 per share.

Artificial-intelligence technology played a key role in both deals, contributing to strong gains across the AI sector. Nvidia, a major player in AI chip manufacturing, rose 2.1%, the biggest single factor lifting the S&P 500. Broadcom also gained 2.1%. Trading volume was light as markets awaited the start of earnings season, with analysts forecasting nearly 30% profit growth for S&P 500 companies from a year earlier. Such strong growth has helped stocks rally near records despite ongoing economic challenges.

The oil market remained volatile due to uncertainties surrounding the war with Iran, with Brent crude prices fluctuating between $100 and $103 before settling at $100.32, down 1.9%. High oil prices have pushed up bond yields, with the 10-year U.S. Treasury yield rising to 5.31%. Strong economic activity, particularly in AI data centers and consumer spending, has also contributed to higher yields. A report from the Institute for Supply Management indicated mixed economic strength, with service industries growing for a 27th straight month but at a slower-than-expected pace.

Wall Street anticipates at least one more interest rate hike by the Federal Reserve by the end of the year to combat inflation. The Fed last raised rates in September after a three-year pause. Internationally, France’s CAC 40 fell 0.8% amid concerns over government debt, while Japan’s Nikkei 225 jumped 2.4% on strong tech stock performance.