Tech Stocks Drive Market Higher, Trump's AI Push Boosts Sentiment
Tech companies led the market rally on Wednesday as Netflix (NFLX) shares surged to a record high following strong earnings. President Donald Trump's commitment to artificial intelligence (AI) demand also boosted investor confidence, despite lingering concerns over tariffs.
The Nasdaq Composite (^IXIC) rose nearly 1.3%, fueled by a jump in Netflix shares after the company reported surprisingly strong earnings. The S&P 500 (^GSPC) climbed over 0.6% to close just shy of its record high of 6,090.
Meanwhile, the Dow Jones Industrial Average (^DJI) gained 0.3% after rallying over 500 points on Tuesday. Trump's actions continue to drive market sentiment, with investors closely monitoring his policies. His latest push to make the US a leader in AI through a $500 billion private-sector investment plan, known as "Stargate," has boosted tech stocks.
Shares in Oracle (ORCL), a partner in the "Stargate" project, continued to rise, gaining nearly 7% on the prospect of increased AI spending. In Tokyo, SoftBank (9984.T, SFTBY) shares jumped 11%, while Arm Holdings (ARM) soared nearly 16%.
Despite heightened concerns about a Trump-spurred trade war, investor sentiment remained positive. Trump indicated plans to impose a 10% duty on China imports on February 1st and threatened additional tariffs on the EU. US stocks rallied on Tuesday after relief that China was not targeted in Trump's initial policy moves.
Corporate earnings continued to roll in, with Johnson & Johnson (JNJ) posting quarterly sales and profit above estimates. However, its stock dipped as investors weighed the impact of a strong dollar. Procter & Gamble (PG) shares rose after surpassing sales forecasts.
In other news, PepsiCo CEO Ramon Laguarta downplayed concerns about being targeted by the Trump administration's food industry critics, while gold prices gained amid uncertainty surrounding Trump's tariff threats.
BlackRock's Investment Institute believes the higher interest rate environment is likely to persist, but remains optimistic about equities as long as corporate fundamentals remain strong.