US Stocks Edge Closer to Record Highs on Buyout Boom
US stocks advanced on Monday, nearing record highs following a pair of major buyout announcements that boosted market sentiment. The S&P 500 climbed 0.7%, pulling within 0.3% of its summer high, while the Nasdaq composite surged 1.1% to set its own record. The Dow Jones Industrial Average added 90 points, or 0.2%. PTC led the rally with a 33.5% jump after Schneider Electric agreed to buy the software company for $205 per share, valuing it at $22.6 billion. Autodesk also rose 4.5% on the news.
Meanwhile, RXO soared 22.5% after C.H. Robinson Worldwide announced plans to acquire the truck brokerage business for $30.25 per share, though C.H. Robinson itself fell 10.8%. Both deals highlighted the promise of artificial-intelligence technology, contributing to broad gains in the AI sector. Nvidia, a key player in AI chip production, gained 2.1%, the largest single force lifting the S&P 500, while Broadcom rose 2.1%.
Trading was otherwise subdued as investors awaited the start of the latest earnings reporting season. Analysts predict nearly 30% year-over-year profit growth for S&P 500 companies, which would mark the third consecutive quarter of growth above 25%. Despite lingering economic concerns, strong corporate earnings have kept stocks near record levels.
The oil market remained volatile amid uncertainty over the war with Iran, with Brent crude settling at $100.32, down 1.9%. Rising oil prices have pushed up bond yields, with the 10-year U.S. Treasury yield climbing to 5.31%, near its highest level since 2002. High yields could slow economic growth by increasing borrowing costs and reducing investor appetite for stocks.
A report on the US services sector showed mixed results. Growth continued for a 27th straight month, but at a slower pace than expected. Input prices also rose faster, signaling potential inflationary pressures. The Federal Reserve is anticipated to raise interest rates at least once by year-end to combat inflation, after a rate hike last month. Internationally, France's CAC 40 fell 0.8% due to concerns over government debt, while Japan's Nikkei 225 jumped 2.4% on tech stock strength.