US Stocks Nudge Record Highs as Buyouts Boost Market
US stocks climbed to the brink of an all-time high on Monday, driven by two major buyout announcements. The S&P 500 rose 0.7%, placing it just 0.3% shy of its summer record. The Dow Jones Industrial Average gained 90 points, or 0.2%, while the Nasdaq composite surged 1.1% to set a new high.
PTC led the market with a 33.5% jump after Schneider Electric of France agreed to buy the software company for $205 per share, valuing it at $22.6 billion. The deal boosted other software stocks, with Autodesk rising 4.5%. Meanwhile, RXO soared 22.5% following news that C.H. Robinson Worldwide would acquire it for $30.25 per share, though C.H. Robinson itself fell 10.8%, the biggest drop in the S&P 500.
Both Schneider Electric and C.H. Robinson highlighted the potential of artificial-intelligence technology in their deals, lifting AI-related stocks. 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%. Trading was otherwise subdued as investors awaited the start of the latest earnings season.
Analysts anticipate nearly 30% year-over-year profit growth for S&P 500 companies in the third quarter, which would mark the third consecutive quarter of growth above 25%. Despite economic concerns, strong corporate earnings have pushed stocks near record levels. The S&P 500 ended at 7,773.95, the Dow at 51,267.90, and the Nasdaq at 27,477.31.
Oil prices fluctuated due to uncertainty over the Iran conflict, settling at $100.32 per barrel for Brent crude. Rising oil prices have pushed up bond yields, with the 10-year U.S. Treasury yield reaching 5.31%. High yields could slow economic growth by increasing borrowing costs and reducing investor appetite for stocks.
A mixed report on the US economy showed that services industries grew for the 27th straight month, though at a slower pace than expected. Prices for materials and services also rose faster, signaling potential inflation concerns. The Federal Reserve is expected to raise interest rates at least once more this year to combat inflation.