US Stocks Edge Closer to Record Highs on Buyout Deals
US stocks approached all-time highs on Monday, driven by two major buyout deals. The S&P 500 climbed 0.7%, pulling within 0.3% of its summer record, while the Nasdaq composite rallied 1.1% to set a new high. The Dow Jones Industrial Average added 90 points, or 0.2%. PTC surged 33.5% after Schneider Electric agreed to buy the software company for $22.6 billion, lifting other software stocks like Autodesk, which rose 4.5%. RXO jumped 22.5% following a $30.25-per-share buyout offer from C.H. Robinson, which fell 10.8%.
Artificial-intelligence technology played a key role in both deals, 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 quiet as investors awaited the start of earnings season, with analysts predicting nearly 30% year-over-year profit growth for S&P 500 companies. Such strong growth has supported the market’s rally despite various economic challenges.
Oil prices fluctuated due to uncertainty over the Iran conflict, with Brent crude settling at $100.32 after earlier swings. The 10-year US Treasury yield rose to 5.31%, nearing a 2002 high, reflecting concerns over high oil prices and their impact on borrowing costs and investment appetite. A mixed report on US services sector activity showed slower-than-expected growth but faster price increases, signaling potential inflation pressures.
Wall Street anticipates at least one more Federal Reserve interest rate hike by year-end to curb inflation, following a rate increase last month. International markets saw France’s CAC 40 fall 0.8% amid concerns over government debt, while Japan’s Nikkei 225 jumped 2.4% on tech stock strength.