US Stocks Rally on Strong Earnings and Trump Optimism
Key Points:
* S&P 500 hits record above 6,100 during session, led by earnings beats
* Oracle, SoftBank, and chip stocks surge on Trump's AI infrastructure announcement
* AI stocks continue to perform well following president's announcement
* S&P 500 closes slightly below all-time closing high
* Majority of S&P 500 companies surpass earnings estimates
Market Summary:
US stocks closed higher on Wednesday, buoyed by strong earnings and optimism for the second-term agenda of President Donald Trump. The S&P 500 rose 0.61% to 6,086.37, while the Dow Jones Industrial Average gained 0.3% to 44,156.73. The Nasdaq composite jumped 1.28% to 20,009.34.
Strong Earnings Drives Rally
Strong earnings results from major companies fueled the market rally. Netflix, United Airlines, and P&G reported impressive financial performances, beating analyst estimates. Netflix added a record number of subscribers and exceeded 300 million users in 2024. According to FactSet, 79% of S&P 500 firms that have reported earnings have surpassed expectations, exceeding the 10-year average of 75%.
Trump Agenda Boosts AI Stocks
Traders were also optimistic about Trump's agenda, particularly his announcement of a $500 billion partnership for AI infrastructure expansion. Oracle shares surged 7%, while SoftBank gained 11%. Semiconductor stocks also performed well, with Nvidia rising 4% and Taiwan Semiconductor increasing 2%.
Other Market News
* Jamie Dimon, CEO of JPMorgan Chase, expressed concerns about market valuations being "kind of inflated."
* Some economists predict a recession in the second half of Trump's term.
* The lack of regulatory announcements from Trump has raised concerns about a potential crypto sell-off.
Commodities, Bonds, and Crypto
* West Texas Intermediate crude oil declined 0.47% to $75.47 a barrel.
* Gold rose 0.39% to $2,754 an ounce.
* The 10-year Treasury yield increased two basis points to 4.601%.
* Bitcoin dropped 1.82% to $104,197.