US Stocks Edge Closer to Records Amid Buyout Boosts

U.S. stocks edged closer to their all-time highs on Monday, driven by two major buyout announcements. The S&P 500 climbed 0.7%, placing it just 0.3% away from its summer record. The Nasdaq composite surged 1.1%, setting a new all-time high, while the Dow Jones Industrial Average added 90 points, or 0.2%. The gains were led by PTC, which jumped 33.5% after Schneider Electric announced a $22.6 billion acquisition offer. The deal also boosted other software stocks, with Autodesk rising 4.5%.

Another notable move came from RXO, which soared 22.5% after C.H. Robinson Worldwide agreed to acquire it. However, C.H. Robinson itself fell 10.8%, marking the largest loss in the S&P 500. Both deals highlighted the growing influence of artificial-intelligence technology, with stocks in the AI sector performing strongly. Nvidia, a key player in AI chip manufacturing, gained 2.1%, contributing significantly to the S&P 500's rise. Broadcom also climbed 2.1%.

Despite the positive momentum, trading volumes were relatively light as investors awaited the start of the earnings reporting season. Analysts expect companies in the S&P 500 to report nearly 30% profit growth from a year earlier, which would mark the third straight quarter of growth above 25%. Such strong earnings have helped stocks remain near record levels despite ongoing economic concerns.

Meanwhile, oil prices fluctuated due to uncertainty surrounding 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 reaching 5.31%. Higher yields could slow economic growth by increasing borrowing costs. A report from the Institute for Supply Management indicated mixed economic strength, with service sector growth slowing but input prices rising, signaling potential inflation pressures. The Federal Reserve is expected to raise interest rates at least once by the end of the year to combat inflation.