23/01/2025 Daily Reports
S&P 500 Breaks the 6,100 Mark
- The benchmark index surged past the 6,100 milestone for the first time during the session, before closing just shy of its all-time record of 6,090.27 (set on December 6, 2024).
- This rally showcases the market’s resilience despite underlying concerns about inflation and monetary policy tightening.
Earnings Season Sets a Positive Tone
- Strong results from Netflix, United Airlines, and Procter & Gamble (P&G) boosted investor sentiment.
- Netflix delivered an extraordinary performance, adding a record number of subscribers in Q4 2024, ending the year with over 300 million users globally.
- Of the S&P 500 companies that have reported so far, 79% have exceeded earnings expectations, a performance above the 10-year historical average of 75%.
Tech and AI Stocks Drive Market Momentum
- AI-related stocks saw significant gains following President Trump’s announcement of a $500 billion AI infrastructure partnership between Oracle, OpenAI, and SoftBank.
- Oracle rallied 7%, while SoftBank shares jumped a remarkable 11%.
- Chipmakers also benefited from the news, with Nvidia rising 4% and Taiwan Semiconductor climbing 2% by the market close.
Whats’ next?
- The market is riding high on optimism fueled by earnings surprises and investments in emerging technologies, particularly AI.
- Stocks at record highs often signal optimism, but also reflect stretched valuations that could amplify market corrections if macroeconomic risks like inflation, high interest rates, or geopolitical tensions materialize.
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– Wall Street saw gains on Wednesday, with the S&P 500 hitting an intraday record high, driven by optimism over Netflix’s strong earnings and President Donald Trump’s announcement of a $500 billion private-sector AI infrastructure investment plan.
– The technology sector surged 2.5%, led by Nvidia, Microsoft, and Netflix, which climbed 9.7% after reporting record subscriber growth and announcing price hikes. Shares of Oracle rose 6.8%, while ARM Holdings jumped 15.9%. The Philadelphia Semiconductor Index gained 1.7%, reflecting investor confidence in AI-related opportunities.
– However, enthusiasm was tempered by a lack of funding clarity for the AI plan, which some investors described as “pie in the sky.” Beyond tech, most sectors lagged, with utilities losing 2.2%.
– Despite recent strong economic data and a moderate approach to tariffs so far, concerns remain over potential trade actions, particularly on China, Mexico, and Canada. Analysts are eyeing April 1, the deadline for federal trade reviews, as a pivotal date.
