S&P 500 reaches record highs on Netflix results and AI investment plans
Wall Street's major indexes rose Wednesday. The benchmark S&P 500 hit a record high as investors cheered the quarterly report from streaming video provider Netflix and technology shares rallied following the announcement of an artificial intelligence infrastructure plan for the private sector.
Data pointing to an economy in which inflation is cooling and President Donald Trump's less aggressive approach to tariffs than expected have boosted risk appetites.
Netflix, the S&P 500’s largest percentage gainer, posted a 9.8% increase after reporting a record number for holiday quarter subscribers. This allowed the company to raise prices for many service plans.
Nvidia led the way for both the S&P 500 index and Nasdaq, followed by Microsoft.
After Trump's Tuesday announcement of the AI, investors piled bets on its promise.
Oracle, OpenAI, and SoftBank have announced a $500 billion AI infrastructure plan for the private sector, despite not knowing how much funding they will receive.
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.
The semiconductor sector would benefit directly, at least in the beginning. He cited the Philadelphia semiconductor index's 2.3% increase.
Stucky said that the news was "more of an investment story with a big sky."
Oracle shares rose 7.6%, while Dell and Super Micro server makers added more than 4.0%. Microsoft gained 3.9%, while Nvidia grew 4.8%. U.S.-traded shares of ARM Holdings - a technology provider to chip companies owned 90% by SoftBank – rose 14.8%.
After Trump warned that tariffs could be imposed on imports from China and Mexico, Canada, the European Union, and Canada on February 1, investors were still awaiting Trump's plans for trade due to inflation fears.
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.
The Dow Jones Industrial Average gained 111.36, or 0.25 percent, to 44.136.46. The S&P 500 rose 40.88, or 0.68 percent, to 6,090.12, and the Nasdaq Composite rose 252.60, or 1.28 percent, to 20,000.69.
Only two sectors of the S&P 500 rose. Technology rose 2.6%, while communications services rose 1.3%. Netflix led the way followed by Meta Platforms.
Procter & Gamble's individual shares rose 2.2%, after exceeding second-quarter expectations and being driven by the growing demand for household products in the United States.
Johnson & Johnson's stock fell by 2.5%, 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 dropped 4% as it announced a 2025 profit that was below expectations.
Halliburton's stock fell 2.6% following a warning that North America will experience a softer year in terms of activity and a disappointing quarterly revenue report.
On the NYSE, where 242 new highs were recorded and 46 new lowers, declining issues outnumbered advancing ones by a ratio of 1.43 to 1.
On the Nasdaq stock exchange, there were 1,896 issues that rose and 2,456 issues that fell. The ratio of declining to advancing stocks was 1.3:1.
The S&P 500 recorded 38 new 52-week lows, while the Nasdaq Composite registered 98 new highs, and 79 new lowers. Reporting by Sinead carew in New York; Johann M Cherian in Bengaluru, Purvi Agarwal, and Sukriti gupta, and editing by Arun koyyur Maju Samuel, and David Gregorio.
(source: Reuters)
