US Stocks Near Record Highs on Buyout Deals and AI Gains

U.S. stocks climbed closer to record highs on Monday, boosted by two major buyout deals. The S&P 500 rose 0.7%, pulling within 0.3% of its summer peak, while the Nasdaq composite gained 1.1% to set a new record. The Dow Jones Industrial Average added 90 points, or 0.2%. The rally was led by PTC, which surged 33.5% after Schneider Electric announced it would acquire the software company for $22.6 billion. Autodesk also rose 4.5% on the news. Meanwhile, RXO jumped 22.5% after C.H. Robinson Worldwide agreed to buy it for $22.6 billion, though C.H. Robinson itself fell 10.8%.

Artificial-intelligence technology played a key role in both deals, and AI-related stocks saw broad gains. Nvidia led the S&P 500 with a 2.1% increase, while Broadcom climbed 2.1%. Trading was otherwise quiet as investors awaited the start of the latest earnings season. Analysts expect nearly 30% profit growth for S&P 500 companies in the third quarter, which would mark the third straight quarter of growth above 25%.

The S&P 500 closed at 7,773.95, the Dow at 51,267.90, and the Nasdaq at 27,477.31. Oil prices fluctuated amid uncertainty over the Iran war, with Brent crude settling at $100.32, down 1.9%. The 10-year U.S. Treasury yield rose to 5.31%, near its highest level since 2002. Higher yields could slow economic growth by increasing borrowing costs.

A report on the U.S. services sector showed mixed results. While business activity grew for a 27th straight month, the pace was slower than expected. Prices for materials and services also rose faster, a potential inflation warning. The Federal Reserve is expected to raise interest rates at least once by year-end to curb inflation, after a hike last month.

Internationally, France’s CAC 40 fell 0.8% due to concerns over government debt, while Japan’s Nikkei 225 surged 2.4% on strength in technology stocks.