Trump's 'Stargate Project' Propels AI Investment and Market Rally

Trump Sparks Records On Wall Street, AI Stargate Project Lifts Chipmakers; Inflation, Tariff Jitters Arise: This Week In The Market - Apple (NASDAQ:AAPL)

Trump's Stargate project aligns OpenAI, SoftBank and Oracle to invest $500B in AI infrastructure, boosting Oracle and Arm shares. Wall Street hit new records as Donald Trump began his second term as 47th U.S. president this week. The S&P 500 index -- as tracked by the SPDR S&P 500 ETF Trust SPY -- climbed above 6,100 points, surpassing its previous December peak and marking a second consecutive week of gains, fueled by a strong start to the fourth-quarter earnings season. Tech stocks led the market again, driven by semiconductors' momentum and a surge in artificial intelligence investments. Trump launched the Stargate project, aligning OpenAI, SoftBank and Oracle Corp. ORCL to channel up to $500 billion over four years into AI infrastructure. Shares of both Oracle and SoftBank-owned Arm Holdings plc ARM jumped 15% this week in response to the announcement. Speaking at the World Economic Forum on Thursday, Trump vowed to make the U.S. the "world capital of artificial intelligence and crypto." He also signed an executive order while fostering U.S. leadership in digital assets. Bitcoin BTC/USD soared to a record $109,000 at the start of the week, holding steady in a tight range thereafter. Moderna Inc. MRNA emerged as the week's top performer, skyrocketing 25% after securing a U.S. government contract to fast-track its bird flu vaccine development. Netflix Inc NFLX followed suit with a 15% surge after blockbuster fourth-quarter results. In contrast, renewable energy stocks came under heavy selling pressure following the formal repeal of the Green New Deal and the removal of electric vehicle subsidies. First Solar Inc. FSLR took the brunt of the hit, tumbling double digits as investors priced in a policy-driven shift away from government-backed clean energy initiatives. Apple Inc. AAPL was the big tech laggard of the week, missing out on the rally following analyst downgrades and warnings about weak iPhone sales in China. You might have missed... Inflation Hits Confidence U.S. consumer confidence fell in January amid rising inflation worries linked to tariffs. According to the University of Michigan survey, consumers opted to buy in advance to avoid future price pressures, sustaining strong auto and retail sales. Inflation Risks Mount Goldman Sachs warns that Trump's potential tariff hikes could elevate consumer inflation expectations, complicating the Federal Reserve's interest rate reduction plans. A universal 10% tariff might boost headline inflation by up to 1 percentage point, according to Goldman. Read Now: US Stocks Hit Dot-Com Era Valuations Vs. Bonds: Why Some Experts Remain Bullish Photo: Ryan DeBerardinis via Shutterstock $BTCBitcoin$105334.041.35%WatchlistOverviewAAPLApple Inc$222.80-0.38%ARMARM Holdings PLC$162.52-2.43%FSLRFirst Solar Inc$168.23-3.38%MRNAModerna Inc$41.49-2.12%NFLXNetflix Inc$976.10-0.89%ORCLOracle Corp$183.63-1.52%SPYSPDR S&P 500$607.60-0.35%Market News and Data brought to you by Benzinga APIs

What Moved Markets This Week

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Spotify. Wall Street on Friday closed out a strong week that saw the benchmark S&P 500 index (SP500) notch its first record closing high of the fledgling year. The event of the week was no doubt U.S. President Donald Trump's inauguration on Monday, Martin Luther King Jr. Day. He immediately signed a slew of decrees, many of them undoing or targeting actions taken by Joe Biden's previous administration. Notably, he refrained from immediately announcing tariffs on other countries, though he said Canada and Mexico could be targeted as soon as February. He did reiterate his "make in America or face tariffs" message at the World Economic Forum in Davos-Klosters, Switzerland, on Thursday, while also touching on topics such as oil prices, interest rates, Big Tech, and banking. Later, in a Fox News interview at the Oval Office, Trump said he'd "rather not" put tariffs on China. Sentiment this week was also boosted by a strong start to the earnings season, including a blockbuster quarterly report from U.S. streaming giant Netflix (NFLX). Trump's announcement of the Stargate Project -- a $500B, four-year initiative to build out artificial intelligence infrastructure -- added to the bullishness. The focus now turns to monetary policy, with the Federal Reserve's first interest rate decision of the year scheduled for next week. For the week, the benchmark S&P 500 (SP500) advanced +1.7%, while the tech-heavy Nasdaq Composite (COMP:IND) also climbed +1.7%. The blue-chip Dow (DJI) surged +2.2%. Read a preview of next week's major events in Seeking Alpha's Catalyst Watch.