US Stocks Edge Closer to All-Time High on Buyout Boom
US stocks surged on Monday, pushing the S&P 500 to within 0.3% of its all-time high. The index climbed 0.7%, while the Nasdaq composite rallied 1.1% to set a new record. The Dow Jones Industrial Average added 90 points, or 0.2%. The gains were fueled by two major buyout announcements: Schneider Electric agreed to acquire PTC for $22.6 billion, sending PTC’s shares up 33.5%, and C.H. Robinson Worldwide announced plans to buy RXO for $30.25 per share, causing RXO to jump 22.5%.
Both Schneider Electric and C.H. Robinson cited the potential of artificial-intelligence technology in their deal announcements, boosting stocks across the AI sector. Nvidia, a key player in AI chip production, led the S&P 500 with a 2.1% gain. Broadcom also climbed 2.1%. Trading remained relatively calm ahead of the upcoming earnings season, with analysts expecting nearly 30% profit growth for S&P 500 companies from July to September.
The oil market saw volatility due to uncertainty surrounding the war with Iran, with Brent crude prices swinging between $100 and $103 before settling at $100.32, down 1.9%. Higher oil prices contributed to rising bond yields, with the 10-year U.S. Treasury yield reaching 5.31%, nearing its highest level since 2002. High yields could slow economic growth and reduce investor appetite for stocks.
A report on Monday indicated mixed economic strength, with the services sector growing for a 27th straight month but at a slower pace than expected. Input prices for services businesses rose at a faster rate, raising concerns about inflation. The Federal Reserve is expected to raise interest rates at least once by the end of the year to combat inflation. Internationally, France’s CAC 40 fell 0.8%, while Japan’s Nikkei 225 jumped 2.4% on strong technology stock performance.