Wall Street Set to Open Higher as Wholesale Inflation Rises Less Than Expected

United Rentals has agreed to acquire H&E Equipment Services in an all-cash deal worth roughly $4.8 billion, including about $1.4 billion of debt, as the equipment rental company aims to expand its capacity in the US.

Under the terms of the deal, United Rentals aims to launch a tender offer by Jan. 28 to acquire all shares of H&E for $92 apiece in cash, the companies said in a joint statement Tuesday. United Rentals plans to acquire all the remaining shares not tendered in the offer through a second-step merger at the same price. H&E's stock soared 106% in premarket activity, while United Rentals gained 4%.

H&E, which serves the construction and industrial markets through 160 branches across 30 US states, has about 2,900 employees and $2.9 billion of rental fleet at original cost. United Rentals expects the deal to enhance its capacity in key US markets and increase its rental fleet by almost 64,000 units.

"This purchase of H&E supports our strategy to deploy capital to grow the core business and drive shareholder value," United Rentals Chief Executive Matthew Flannery said in a statement. "This acquisition allows us to better serve our customers with expanded capacity in key markets while also providing the opportunity to further drive revenue through our proven cross-selling strategy."

The deal, which requires a minimum tender of at least a majority of H&E shares, is expected to be completed in the ongoing quarter. The deal also includes a 35-day "go-shop" period until Feb. 17 during which H&E can terminate the agreement in favor of a superior alternative acquisition proposal.

"I couldn't be more pleased with this win-win outcome for both organizations, our customers and our shareholders," H&E Executive Chairman John Engquist said. "I am confident that we've found an excellent landing spot for them and I am excited for the new opportunities they will have as part of United Rentals."

The companies project the deal to be accretive to United Rentals' per-share adjusted earnings and free cash flow in the first year after completion. The deal is anticipated to generate about $130 million of annualized cost synergies within 24 months of completion, mainly in the corporate overhead and operational areas. United Rentals also sees $120 million of annual revenue cross-sell synergies by the third year.

United Rentals expects to fund the transaction through a mix of newly issued debt, borrowings and available capacity under its asset-based lending facility. The company doesn't expect the deal to impact its current dividend program.

The company plans to update its 2025 outlook to reflect the deal after its completion.

Firefly Neuroscience said Tuesday its BNA technology platform is able to assess a patient's biological brain age using cognitive data, potentially leading to a "scalable" approach to early screening for Alzheimer's patients.

The US Food and Drug Administration-approved platform used resting electroencephalography, or EEG, and cognitive EEG to assess the biological age of a person's brain, the company said.

Chief Technology Officer Gil Issachar said the technology "is capable of finding a significant disparity between brain age and chronological age, which could serve as a valuable risk factor for dementia."

Shares of the company soared more than 111% in Tuesday's premarket activity.

The broad market exchange-traded fund SPDR S&P 500 ETF Trust was up 0.3% and the actively traded Invesco QQQ Trust advanced 0.1% in Tuesday's premarket activity as traders brace for the first inflation report due this week.

US stock futures were also higher, with S&P 500 Index futures up 0.2%, Dow Jones Industrial Average futures advancing 0.2%, and Nasdaq futures gaining 0.2% before the start of regular trading.

NFIB's December US Small Business Optimism Index rose to 105.1 from 101.7 in November and 91.9 a year earlier.

The December producer price index bulletin will be released at 8:30 am ET.

Federal Reserve Kansas City President Jeffrey Schmid speaks at 10 am ET, followed by New York Fed President John Williams at 3:05 pm ET.

In premarket activity, bitcoin was up by 2.8% and the cryptocurrency fund ProShares Bitcoin Strategy ETF was 2.8% higher.

Power Play:

Consumer

The Consumer Staples Select Sector SPDR Fund was up 0.1%, while the Vanguard Consumer Staples Fund gained 0.3%. The iShares US Consumer Staples ETF was inactive, and the Consumer Discretionary Select Sector SPDR Fund advanced 0.6%. The VanEck Retail ETF and the SPDR S&P Retail ETF were inactive.

KB Home shares were up nearly 10% pre-bell after the company reported better-than-expected fiscal Q4 results and double-digit growth in deliveries and net orders.

Winners and Losers:

Health Care

The Health Care Select Sector SPDR Fund advanced 0.03%. The Vanguard Health Care Index Fund was up 0.5% while the iShares US Healthcare ETF was inactive. The iShares Biotechnology ETF gained 0.1%.

REGENXBIO stock was up 8% premarket after the company and Nippon Shinyaku formed a partnership to develop and commercialize RGX-121, a potential treatment for Hunter syndrome, and RGX-111, a treatment for Hurler syndrome.

Financial

Financial Select Sector SPDR Fund advanced 0.2%. Direxion Daily Financial Bull 3X Shares was up 0.8%, while its bearish counterpart Direxion Daily Financial Bear 3X Shares was 0.9% lower.

Farmers & Merchants Bancorp shares were up nearly 3% pre-bell Tuesday, adding to gains from the previous close. The company appointed Andrew Baker as chief strategy officer and promoted Taryn Marino to chief retail banking officer.

Technology

Technology Select Sector SPDR Fund advanced 0.4%, and the iShares US Technology ETF was 1% higher, while the iShares Expanded Tech Sector ETF rose 4%. Among semiconductor ETFs, SPDR S&P Semiconductor ETF was inactive, while the iShares Semiconductor ETF gained 0.6%.

United Microelectronics shares were up 2.6% in recent Tuesday premarket activity after the company said its Fab 12A in Taiwan has been added to the World Economic Forum's Global Lighthouse Network.

Industrial

Industrial Select Sector SPDR Fund advanced 0.5% and the Vanguard Industrials Index Fund gained 0.03% while the iShares US Industrials ETF (IYJ) was inactive.

United Rentals stock was up 2.3% before the opening bell and H&E Equipment Services shares rose 107% after the companies said that they entered into a definitive agreement under which United Rentals would acquire H&E at $92 per share in cash, for a total enterprise value of about $4.8 billion.

Energy

The iShares US Energy ETF was flat, while the Energy Select Sector SPDR Fund was up by 0.2%.

BP stock was down 1.8% before Tuesday's opening bell after the company said it expects "weaker" realized refining margins in Q4 to be between $100 million and $300 million and a higher "impact" from turnaround activity.

Commodities

Front-month US West Texas Intermediate crude oil slipped 0.3% to reach $78.56 per barrel on the New York Mercantile Exchange. Natural gas fell 4.5% to $3.76 per 1 million British Thermal Units. United States Oil Fund was down 0.2%, while the United States Natural Gas Fund was 4% lower.

Gold futures for February advanced 0.1% to $2,680.90 an ounce on the Comex, while silver futures gained 0.2% to reach $30.36 an ounce. SPDR Gold Shares increased 0.3%, while the iShares Silver Trust was 0.4% higher.

Phio Pharmaceuticals shares tumbled 42% in recent Tuesday premarket activity, erasing Monday's surge.

Bogota Financial stock plunged 32%, extending the previous session's loss.

Signet Jewelers stock fell nearly 17% after it said it lowered its fiscal Q4 sales outlook to a range of $2.32 billion to $2.34 billion, from the previous guidance of $2.38 billion to $2.46 billion.

BP shares were down 2%, after saying it expects "weaker" realized refining margins in Q4 to be between $100 million and $300 million and a higher "impact" from turnaround activity.

US stock futures were tracking higher in Tuesday's premarket session as investors awaited key inflation data.

Dow Jones Industrial Average futures were up 0.27%, S&P 500 futures were 0.30% higher, and Nasdaq futures gained 0.33%.

Oil prices were moving lower, with front-month global benchmarks Brent crude and West Texas Intermediate crude declining 0.36% and 0.26% respectively.

The producer price index for December, a measure of wholesale inflation, will be released at 8:30 am ET. The index is expected to increase 0.4%, the same as the previous month, according to Bloomberg. The core PPI, which excludes food and energy, is expected to rise 0.2%, also the same as in November.

Among rising stocks, Nature's Miracle N soared 143% in Tuesday's premarket session, erasing a 38% loss from Monday. H&E Equipment Services shares jumped 107% after the company agreed to be acquired by United Rentals (URI) in a deal worth about $4.8 billion. And Staffing 360 Solutions surged 61%, a day after it said an amendment to its merger agreement with Atlantic International will allow it to convert certain borrowings into equity.

On the losing side, Mineralys Therapeutics fell 6.5%, adding to a 5.2% loss on Monday. Bogota Financial shares tumbled 32% after rising 2.8% the previous session. And shares of Cryo-Cell International dropped 27% after gaining 2.1% on Monday.

Nature's Miracle N shares surged 150% in recent premarket activity Tuesday after the company said it signed a securities purchase deal with a single institutional investor to sell up to a total of $29.7 million newly-designated class of convertible preferred stock.

H&E Equipment Services shares gained 107% after it agreed to be acquired by United Rentals for $92 per share in cash for a total enterprise value of about $4.8 billion, the companies said.

Applied Digital shares rose 22% after it said that Macquarie has agreed to invest up to $5 billion in the company.

CFSB Bancorp shares were up almost 13%, adding to Monday's slight gain.