Stocks Surge Near Records on AI-Driven Buyouts

U.S. stocks climbed closer to their all-time highs on Monday, driven by a pair of high-profile buyout announcements. The S&P 500 gained 0.7%, edging within 0.3% of its summer record, while the Nasdaq composite surged 1.1% to set a new high. The Dow Jones Industrial Average added 90 points, or 0.2%. Software company PTC soared 33.5% after Schneider Electric of France agreed to acquire it for $205 per share, valuing the deal at $22.6 billion. This lifted other software stocks, with Autodesk rising 4.5%. Meanwhile, RXO jumped 22.5% after C.H. Robinson Worldwide announced plans to buy the truck brokerage business for $30.25 per share, while C.H. Robinson itself fell 10.8%.

Artificial intelligence played a key role in both deals, boosting stocks across the AI sector. Nvidia, a major supplier of AI chips, climbed 2.1%, contributing significantly to the S&P 500’s gains. Broadcom also rose 2.1%. Analysts expect strong earnings growth for the third quarter, with forecasts suggesting nearly 30% year-over-year profit growth for S&P 500 companies. Such robust growth has helped stocks rally despite ongoing economic concerns.

The S&P 500 ended the day at 7,773.95, the Dow at 51,267.90, and the Nasdaq at 27,477.31. Oil prices fluctuated due to uncertainty over the Iran conflict, with Brent crude settling at $100.32, down 1.9%. The 10-year U.S. Treasury yield rose to 5.31%, nearing its highest level since 2002, reflecting worries about inflation and higher borrowing costs. A report on U.S. services industries showed slower-than-expected growth but faster cost increases, hinting at persistent inflation. Wall Street expects the Federal Reserve to raise interest rates again by year-end to combat rising living costs.

Internationally, France’s CAC 40 fell 0.8% amid concerns over the country’s debt and budget strains. In contrast, Japan’s Nikkei 225 surged 2.4%, led by gains in technology stocks.