U.S. Stocks Approach Record Highs on Buyout Deals and AI Growth

U.S. stocks edged closer to all-time highs on Monday, propelled by a pair of 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 its own new high. The Dow Jones Industrial Average added 90 points, or 0.2%. PTC surged 33.5% after Schneider Electric of France announced a $205-per-share cash offer, valuing the software company at $22.6 billion. RXO also jumped 22.5% following news that C.H. Robinson Worldwide would acquire it for $30.25 per share, though C.H. Robinson itself dropped 10.8%.

The deals highlighted the growing influence of artificial-intelligence technology, with both Schneider Electric and C.H. Robinson citing AI as a key factor. Nvidia led the S&P 500's gains with a 2.1% increase, while Broadcom rose 2.1%. Analysts anticipate strong earnings growth for the third quarter, forecasting nearly 30% year-over-year profit increases for S&P 500 companies, which would mark the third consecutive quarter of growth above 25%.

Trading was otherwise subdued as markets awaited the start of earnings season. Oil prices fluctuated amid uncertainty over the Iran war's impact on global crude supply, settling at $100.32 per barrel of Brent crude. The 10-year U.S. Treasury yield rose to 5.31%, nearing its highest level since 2002. A report on U.S. services industries showed slower-than-expected growth but accelerating price increases for materials, raising concerns about inflation. The Federal Reserve is expected to raise interest rates at least once more this year to combat rising living costs.

Internationally, France's CAC 40 fell 0.8% amid worries over government debt and budget strains, while Japan's Nikkei 225 surged 2.4% on strength in technology stocks.