US Stocks Near Record Highs as Buyouts and AI Hype Drive Gains
U.S. stocks rose sharply on Monday, nearing an all-time high as two major buyout deals fueled investor optimism. The S&P 500 climbed 0.7%, coming within 0.3% of its summer record high. The Dow Jones Industrial Average added 90 points, or 0.2%, while the Nasdaq composite surged 1.1% to set a new record. PTC Inc. led the gains with a 33.5% jump after Schneider Electric announced it would acquire the software company for about $22.6 billion in cash.
The proposed acquisition boosted other software stocks, with Autodesk rising 4.5%. Meanwhile, RXO soared 22.5% after C.H. Robinson Worldwide agreed to buy the truck brokerage business in a deal valuing RXO at $30.25 per share. C.H. Robinson, however, fell 10.8%, the largest loss in the S&P 500. Both Schneider Electric and C.H. Robinson highlighted the potential of artificial-intelligence technology in their deal announcements, lifting AI-related stocks. Nvidia gained 2.1%, the strongest force pushing the S&P 500 higher, while Broadcom climbed 2.1%.
Trading was otherwise subdued as investors awaited the start of the latest 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%. Despite economic concerns, strong corporate earnings have helped stocks rally near record levels. The S&P 500 closed at 7,773.95, the Dow at 51,267.90, and the Nasdaq at 27,477.31.
The oil market remained volatile due to 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 reaching 5.31%. High yields can slow economic growth and make investors hesitant to pay high prices for stocks. The U.S. economy showed mixed strength, with the services sector growing for a 27th straight month but at a slower pace than expected. Inflation concerns persisted as input costs for services businesses accelerated.
The Federal Reserve is expected to raise its main interest rate at least once by the end of the year to combat inflation. Meanwhile, international markets saw France’s CAC 40 fall 0.8% amid concerns over government debt, while Japan’s Nikkei 225 jumped 2.4% on strong technology stock performance.