US Stocks Near Records as Buyouts and Oil Easing Lift Markets
US stocks climbed closer to their record highs on Monday, buoyed by major buyout announcements and easing oil prices. The S&P 500 gained 0.7%, bringing it within 0.3% of its summer peak. The Dow Jones Industrial Average rose 0.2%, while the Nasdaq composite surged 1.1% to set a new record. PTC led the rally with a 33.5% jump after Schneider Electric agreed to acquire it for $22.6 billion, with each share priced at $205 in cash. The deal also lifted other software stocks, including Autodesk, which rose 4.5%. RXO soared 22.5% following news that C.H. Robinson Worldwide would buy the truck brokerage business for $30.25 per share, though C.H. Robinson itself fell 10.8%. Both deals highlighted the growing influence of artificial intelligence, driving gains for AI-related stocks like Nvidia, which rose 2.1%, and Broadcom, up 2.1%.
Trading remained relatively subdued as investors awaited the start of the latest earnings season. Analysts expect nearly 30% year-over-year profit growth for S&P 500 companies, which would mark the third consecutive quarter of growth above 25%. Despite persistent economic challenges, strong corporate earnings have helped push stocks near record levels. The S&P 500 closed at 7,773.95, the Dow at 51,267.90, and the Nasdaq at 27,477.31.
The oil market saw volatility due to uncertainty surrounding the war with Iran, with Brent crude prices fluctuating between $100 and $103 before settling at $100.32, down 1.9%. Higher oil prices have contributed to rising 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 high-priced stocks. The strength of the US economy, driven by AI data center investments and consumer spending, has also pushed yields higher.
A report on the US services sector showed mixed results, with 27 consecutive months of growth but weaker-than-expected expansion. The Institute for Supply Management noted faster increases in input prices, a potential inflation warning. Wall Street anticipates at least one more interest rate hike by the Federal Reserve this year to combat inflation. Meanwhile, global 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.