S&P 500 Hits Record High as Trump's AI Initiative and Strong Earnings Fuel Market Rally

S&P 500 hits record high with boost from Netflix results, AI investment plan

Wall Street's indexes rose as the S&P 500 hit a record high, driven by gains in the technology sector, particularly Nvidia, Microsoft, and Netflix. Investors were excited by Trump's $500 billion private-sector AI infrastructure investment plan. While tech and communications services saw gains, utilities declined. The market's rally reflected strong economic data and investor optimism despite trade concerns.Wall Street's indexes rose on Wednesday, with the benchmark S&P 500 hitting an intraday record high as investors cheered streaming video provider Netflix's quarterly report and President Donald Trump's private-sector artificial intelligence infrastructure investment plan. The technology sector advanced 2.5% and was the biggest gainer among the S&P 500's 11 major industry indexes with its biggest boosts from AI heavyweights Nvidia and Microsoft. Netflix, the S&P's biggest gainer, finished up 9.7% after reporting a record number of subscribers for the holiday quarter, enabling it to increase prices for most service plans. Investors piled bets into the promise of AI the day after Trump announced a $500 billion private-sector AI infrastructure investment plan from a venture involving Oracle, OpenAI and SoftBank, even though there was no clarity on funding. But of the 11 major industry sectors only tech and communications services, up 1.1%, notched daily gains while the biggest decliner utilities, lost 2.2%. "This is just the excitement about the technology investments," said Irene Tunkel, chief u.s. equity strategist at BCA Research, noting the market's narrow breadth on Wednesday. "Everything else just cannot compete with it." Shares in Oracle rallied 6.8% while U.S. traded shares of ARM Holdings, a chip technology supplier that is roughly 90% owned by SoftBank, rose 15.9%. Server maker Dell added 3.6%. "It's a story of big tech and everything else is hanging in there," said Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management, who attributed much of Wednesday's rally, particularly in chip stocks, to the AI announcement. "The direct beneficiary, at least the beginning would be the semiconductor space," he said pointing to outperformance in the Philadelphia semiconductor index, which closed up 1.7%. But without funding clarity, Stucky described the news as "more of a pie in the sky kind of investment story." The S&P 500 ended up 37.13 points, or 0.61%, to 6,086.37 just a few points below its last record closing high of 1090.27, reached on Dec. 6. The Nasdaq Composite gained 252.56 points, or 1.28%, to 20,009.34 while The Dow Jones Industrial Average rose 130.92 points, or 0.30%, to 44,156.73 Risk appetites have been boosted recently by strong economic data and cooling inflation along with Trump's more moderate than feared approach to tariffs since his Monday inauguration. However, investors are still cautiously watching for the president's trade plans due to inflation concerns after he warned that tariffs on imports from China, Mexico, Canada and the European Union could be issued on Feb. 1. The president has ordered federal agencies to complete comprehensive reviews of a range of trade issues by April 1 - the date that analysts at Barclays say markets should focus on. In individual stocks, Procter & Gamble advanced 1.9% after beating second-quarter estimates, driven by growing demand for its household items in the United States. Johnson & Johnson shares fell 1.9% although the drugmaker reported fourth-quarter results above estimates. After rising on Tuesday, Ford sank 3.8% as Barclays downgraded the stock. Textron shares fell 3.4% after it forecast 2025 profit below estimates. Halliburton slipped 3.6% after warning of softer North America activity this year and posting downbeat quarterly revenue. Declining issues outnumbered advancers by a 1.55-to-1 ratio on the NYSE where there were 271 new highs and 57 new lows. On the Nasdaq, 1,835 stocks rose and 2,571 fell as declining issues outnumbered advancers by a 1.4-to-1 ratio. The S&P 500 posted 39 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 104 new highs and 95 new lows. On U.S. exchanges 13.89 billion shares changed hands, below the 15.33 billion average for the last 20 sessions.

S&P 500 Hits Record High as AI Powers Tech Rally: Markets Wrap

(Bloomberg) -- A rally in big tech and a batch of earnings from corporate heavyweights drove stocks toward a record close in a continuation of the surge fueled by the strength of Corporate America. With an almost 1% advance, the S&P 500 briefly touched its all-time intraday high near 6,100. Nvidia Corp. led gains in megacaps while Oracle Corp. soared 7% on a $100 billion joint venture with SoftBank Group and OpenAI, an effort unveiled with President Donald Trump that further boosts prospects for the artificial-intelligence mania that has powered the market. Netflix Inc. surged 10% amid its biggest-ever subscriber gain. Travelers Cos. and Procter & Gamble Co. climbed on strong results. "We stay risk-on and expect earnings to fuel equities," said BlackRock Investment Institute strategists including Jean Boivin and Wei Li. "Even in a higher-rate environment, we still think stocks can keep pushing higher as long as fundamentals stay strong." To Matt Maley at Miller Tabak, if this earnings season is a good one, it's a rally that could have legs. However, it will take more than merely "beating expectations" to fuel a further advance of significance. Despite a recent broadening attempt of the market beyond a handful of megacaps, tech led the way on Wednesday -- and most companies in the S&P 500 actually fell. Poor breadth has been a major concern of investors, especially among those nervous about sky-high valuations and frothy AI stocks. JP Morgan Chase & Co.'s chief Jamie Dimon told CNBC there are signs that the stock market is overheated, with asset prices "kind of inflated." Meantime, Cathie Wood, the founder of ARK Investment Management, told Bloomberg's ETF IQ that Trump's regulatory and growth agenda will revive the market for US initial public offerings. The S&P 500 rose 0.8%. The Nasdaq 100 climbed 1.5%. The Dow Jones Industrial Average added 0.4%. A Bloomberg gauge of the "Magnificent Seven" megacaps gained 1.4%. The Russell 2000 fell 0.5%. The yield on 10-year Treasuries advanced two basis points to 4.6%. The Bloomberg Dollar Spot Index wavered. "Markets are reacting positively to the initial wave of Trump policies, with investors showing enthusiasm reminiscent of the run-up to the election as they breathe a sigh of relief over the tariff announcements and the early stages of earnings season," said Mark Hackett at Nationwide. Hackett also noted hat while the bar for earnings is high, the market is showing impressive resilience. "A breakout to a fresh record high would energize the bulls, as earnings seasons have been choppy in recent quarters," he concluded. After the S&P 500 soared 24% in 2023 and 23% in 2024, lofty valuations brought some discussion on whether the benchmark will be able to achieve such a performance again this year. Back-to-back annual gains of over 20% for the S&P 500 do not necessarily make US equities due for a pullback, as history shows the market has typically continued to deliver solid, albeit more muted, returns in the following year," said Jeff Schulze at ClearBridge Investments. "Further, the current rally is far from the longest without a correction." Schulze also noted that earnings growth has largely been concentrated amongst a small group of stocks in recent years. This is expected to shift in 2025 with a broadening of earnings participation, which should lead to improved relative performance for small/mid cap and value laggards. "While we continue to watch the new administration's next moves closely, investor should not lose sight of the fundamentals that remain favorable for US equities," said Solita Marcelli at UBS Global Wealth Management. "Without taking any single-name views, we continue to like technology, utilities, and financials, and see value in utilizing structured strategies to navigate near-term volatility." The stock market's "January effect" is taking shape so far, with stocks performing strongly throughout the month, according to to John Creekmur at Creekmur Wealth Advisors. "Investors are now more focused on earnings and hopes for tax cuts and deregulation from the new Trump administration, and less so about worries of fewer Federal Reserve rate cuts this year," he noted. The Nasdaq 100 has nearly doubled since the start of 2023, adding $14 trillion in value in the process. Evercore ISI's Rich Ross is prepared for that rally to continue, shrugging off fears of a familiar nemesis: bond yields. Treasury rates jumped to multi-month highs last week as investors parsed economic data for clues on the Federal Reserve's next interest-rate cut. The yield on the US 10-year has since pulled back after hitting a relative strength reading that usually signals a retreat. Pair that with positive technical signals and the Nasdaq 100 and S&P 500 Index both appear poised to hit fresh all-time highs in the first quarter, according to Ross. "At the end of the day technology remains in an outstanding position to continue to lead this market higher," Ross said. This story was produced with the assistance of Bloomberg Automation. --With assistance from Cecile Gutscher, Sujata Rao, Robert Brand and Aya Wagatsuma.

S&P 500 hits intraday high, boosted by Netflix, AI investment plan

STORY: Wall Street's main indexes rose Wednesday, with the S&P 500 hitting an intraday record high thanks to strong Netflix earnings and a rally in tech shares. The Dow gained three-tenths of a percent, the S&P climbed about six-tenths and the tech-heavy Nasdaq added nearly 1.3%. Shares of Netflix surged more than 9.5% after the company reported a record number of subscribers for the holiday quarter and said it's raising prices in multiple markets including the U.S. and Canada. Investors also piled into tech stocks a day after President Trump announced a $500 billion private-sector AI infrastructure investment plan from a venture involving Oracle, OpenAI and SoftBank. While this signaled more AI growth potential, Mike Mussio, president of FBB Capital Partners, noted that announcing a plan is a lot easier than executing it. "There's a lot of supply of capital. There seems to be a lot of demand still, like, on the chip side in terms of the actual tech companies, in terms of their capital expenditures. But we got to look at each of these compass markings as the quarters go by, both for the company earnings and then the actual growth behind these projects and see where see where it all breaks." Investors are also watching for Trump's trade plans, due to inflation concerns, after he warned that tariffs on imports from China, Mexico, Canada and the European Union could be issued on Feb. 1. Other stock moves Wednesday included Procter & Gamble, which added nearly 2% after beating second-quarter estimates for sales and profit. Johnson & Johnson shares fell nearly 2% despite the drugmaker reporting fourth-quarter results above estimates. And shares of Halliburton slipped roughly 3.5% after the company said it expects flat to slightly lower revenues this year, due to softer activity in North America and Mexico.

S&P 500 Hits Fresh Records At 6,100: Strong Earnings, Trump's AI Wager Fuel Bull Run - Abbott Laboratories (NYSE:ABT), Amazon.com (NASDAQ:AMZN)

The S&P 500 briefly hit 6,100 points on Wednesday, reaching a fresh all-time high as Wall Street embraced a powerful mix of strong corporate earnings and President Donald Trump's bold $500 billion artificial intelligence initiative, dubbed "AI Stargate." The project, designed to transform America's AI infrastructure, added fuel to a market already cheering on stronger-than-expected fourth-quarter earnings and rising hopes of Federal Reserve interest rate cuts later this year. Mega-cap technology stocks and semiconductor giants led the charge, pushing the S&P 500 -- tracked by the SPDR S&P 500 ETF Trust SPY -- higher for the sixth time in the last seven sessions. By midday Wednesday, the S&P 500 hit 6,100.4 points, narrowly surpassing its previous record of 6,099 set on Dec. 6. See Also: Happy Birthday S&P 500 SPY ETF! If You Invested $1,000 In SPY At Launch, Here's How Much You'd Have Today AI Stargate: A Game-Changing Investment in AI Infrastructure Trump unveiled AI Stargate on Jan. 21. The joint venture unites OpenAI, led by Sam Altman, SoftBank, backed by Masayoshi Son, and Oracle Corp. ORCL to build next-generation AI infrastructure. The project aims to invest up to $500 billion over four years to develop massive AI data centers across the U.S., starting with an initial $100 billion phase. Trump hailed the initiative as a "declaration of confidence in America's potential," emphasizing its importance in keeping the future of AI technology within U.S. borders. AI Stargate is expected to create 100,000 jobs almost immediately, further boosting optimism about economic growth. Earnings Strength Fuels Market Optimism While AI excitement dominated headlines, a strong corporate earnings season provided the foundation for the market's rally. As of Jan. 17, 81% of S&P 500 companies reporting fourth-quarter results had exceeded Wall Street's profit forecasts, while 64% had beaten revenue estimates, according to FactSet. Mega-cap firms reporting earnings this week -- including Netflix Inc. NFLX, Charles Schwab Corp. SCHW, Prologis Inc. PLD, Procter & Gamble PG, Abbott Laboratories ABT, and Johnson & Johnson JNJ -- all topped estimates, reinforcing investor confidence in corporate America's strength. "The S&P 500's forward profit margin was at a record-high 13.6% during the January 18, 2025, week, up 0.9 percentage points from 12.7% a year earlier," veteran investor Ed Yardeni said in a note Wednesday. "Corporate profitability should continue to improve even as Trump's administration faces a big fiscal headwind." Tech Titans Drive The Market Higher The so-called "Magnificent 7" stocks were at the center of Wednesday's rally, with the Roundhill Magnificent Seven ETF MAGS climbing 1.5%. Microsoft Corp. MSFT surged 4%, while Nvidia Corp. NVDA jumped 4.6%, reinforcing their dominance in the AI race. Chip stocks saw particularly strong gains as investors bet on increased demand for AI-related infrastructure. Arm Holdings plc ARM, the SoftBank-owned semiconductor design firm, soared 15% -- its biggest single-day gain since February 2024. SoftBank's 2024 annual report had described Arm as providing "the foundational technology for Artificial Super Intelligence," a claim that now appears increasingly relevant as AI Stargate takes shape. Six Stocks Powering The S&P 500's Record High Just a handful of companies were responsible for a significant portion of the broader market's surge on Wednesday. Nvidia and Microsoft alone contributed 53 basis points to the S&P 500's advance, while Netflix, Amazon.com Inc. AMZN, Meta Platforms Inc. META, and Oracle Corp. collectively added another 18 basis points. Read now: Can S&P 500 Repeat Large Gains From Trump's First Term A Second Time Around? Readers Say This... Image: Shutterstock ABTAbbott Laboratories$117.780.85%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewAMZNAmazon.com Inc$234.801.77%ARMARM Holdings PLC$179.3515.6%JNJJohnson & Johnson$145.10-2.06%MAGSRoundhill Magnificent Seven ETF$56.481.60%METAMeta Platforms Inc$623.501.14%MSFTMicrosoft Corp$445.824.04%NFLXNetflix Inc$951.709.43%NVDANVIDIA Corp$146.824.25%ORCLOracle Corp$184.106.68%PGProcter & Gamble Co$164.351.63%PLDPrologis Inc$114.84-2.07%SCHWCharles Schwab Corp$80.60-0.41%SOXXiShares Semiconductor ETF$235.901.48%SPYSPDR S&P 500$606.270.53%XLKSPDR Select Sector Fund - Technology$241.392.26%Market News and Data brought to you by Benzinga APIs

US stock futures steady after S&P 500 hits record high on Trump's AI push By Investing.com

Investing.com - U.S. stock index futures held steady Wednesday evening after the S&P 500 reached a record high, driven by strong Netflix earnings and optimism surrounding Donald Trump's AI investment plans. S&P 500 Futures were largely unchanged at 6,118.0 points, while Nasdaq 100 Futures inched 0.1% lower to 21,970.50 points by 19:07 ET (00: GMT). Dow Jones Futures were also steady at 44,354.0 points. S&P 500 hits record high with Netflix gains, Trump's AI boost Netflix Inc (NASDAQ:NFLX) shares surged nearly 10% on Wednesday after the company reported a record-breaking 19 million new subscriber additions in the fourth quarter of 2024, far surpassing Wall Street's expectations. Quarterly revenue rose to $9.5 billion, up 8% year-over-year, while net income came in at $915 million, reflecting a 12% growth. Netflix also announced plans to raise prices for most subscription tiers in the U.S., Canada, Portugal, and Argentina, citing increased investments in programming. AI stocks were also higher after President Trump unveiled a $500 billion joint venture, named Stargate, involving OpenAI, Oracle Corporation (NYSE:ORCL), SoftBank Group Corp. (TYO:9984), Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and other tech leaders. The collaboration aims to construct extensive AI data centers and electricity generation facilities in Texas over the next four years, significantly bolstering the nation's AI capabilities. Oracle shares closed nearly 7% higher, while Microsoft jumped 4.1% and Nvidia climbed 4.4%. Arm Holdings ADR (NASDAQ:ARM) shares surged 16%, while Amazon.com Inc (NASDAQ:AMZN) stock rose 2%. This led to the S&P 500 hitting a record high of 6,100.81 points, but the index pared some gains later in the day to close 0.6% higher at 6,086.28 points. The NASDAQ Composite index rose 1.3% to 20,009.34 points, while the Dow Jones Industrial Average edged 0.3% higher. Markets cautious on Trump's policies; more earnings on tap On January 20, Trump was inaugurated as the 45th President of the U.S., marking the start of a new administration that promised significant policy changes. Immediately after taking office, President Trump began issuing a series of executive orders that underscored his campaign pledges. Markets were cautious in anticipation of new tariffs under Trump's administration. Trump avoided imposing blanket tariffs on his first day. On Wednesday, he said he would impose 10% levies on China, and hit the European Union with tariffs. For now, markets focus on corporate earnings and anticipate increased volatility with Trump's policy announcements.