S&P 500 reaches record high thanks to Netflix results and AI investment plan
Wall Street indexes rose Wednesday. The benchmark S&P 500 hit a record during the session as investors cheered the quarterly report from streaming video provider Netflix and technology shares rallied after President Donald Trump's announcement of a private sector artificial intelligence infrastructure plan.
The S&P 500 index's 11 main industry sectors were led by the technology sector, which saw a big boost from AI chip leaders Nvidia and Microsoft.
The day after Trump's announcement, investors piled up bets on the promise of AI.
A $500 billion investment plan for private sector AI infrastructure from a venture that includes Oracle, OpenAI, and SoftBank, despite the lack of clarity regarding funding.
Netflix shares rose sharply following the announcement that the company had reported a record-breaking number of subscribers during the holiday quarter. This allowed Netflix to raise prices on most service plans.
Irene Tunkel of BCA Research's Chief U.S. Equity Strategy, noted the narrow market on Wednesday. "Everything else cannot compete with it."
Oracle shares rose along with those of Dell, a server maker. Also up were the U.S.-traded shares of ARM Holdings. This chip supplier is owned to a large extent by SoftBank.
Matt Stucky is the chief portfolio manager of equities for Northwestern Mutual Wealth Management. He attributed a large part of Wednesday's rally in chips stocks to the AI announcement.
He said that the semiconductor sector would benefit from the outperformance of the Philadelphia semiconductor index.
Stucky said that the news was "more of an investment story with a big sky."
Preliminary data shows that the S&P 500 rose 36.57 points or 0.60% to 6,085.81, and the Nasdaq Composite rose 251.89 points or 1.27% to 20,008.67. The Dow Jones Industrial Average increased 120.97 points or 0.27% to 44,146.78.
Recent data has boosted risk appetites, with data showing a strong economy, a cooling of inflation and Trump's less aggressive approach than expected to tariffs following his Monday inauguration.
Investors are still waiting for the President's plans on trade due to inflation fears after he warned of tariffs being imposed on imports coming from China, Mexico Canada and the European Union on February 1.
Analysts at Barclays believe that the markets should be focused on April 1, when the president ordered federal agencies complete comprehensive reviews of various trade issues.
Procter & Gamble's individual shares rose after exceeding second-quarter expectations, due to the growing demand for household products in the United States.
Johnson & Johnson's shares dropped despite the fact that it reported results for its fourth quarter above expectations.
Barclays has downgraded Ford's stock after it rose on Tuesday. Textron shares dropped after the company forecasted 2025 profits below expectations.
Halliburton fell after it warned of a softer North America this year, and reported a disappointing quarterly revenue. Reporting by Sinead carew in New York; Johann M Cherian in Bengaluru, Purvi Agarwal, and Sukriti gupta in Bengaluru. Editing by Arun koyyur Maju Samuel, and David Gregorio.
(source: Reuters)
