US Stocks Surge: Strong Earnings and Trump’s AI Plan Drive S&P 500 Near Record High
Staff Editor US Stocks Rally on Strong Earnings and Trump’s AI Initiative
US stocks surged on Wednesday as investors responded positively to robust earnings reports and increased optimism surrounding Donald Trump’s potential second-term agenda. The S&P 500 index briefly touched a record high, surpassing 6,100 during the session, before closing slightly below its all-time peak.
The market rally was fueled by impressive earnings from key companies such as Netflix, United Airlines, and Procter & Gamble, all of which exceeded Wall Street expectations. Netflix, in particular, reported a record number of new subscribers, ending 2024 with over 300 million users. This strong start to the earnings season has seen 79% of S&P 500 companies beating estimates, outpacing the 10-year average.
Adding to the market enthusiasm was Donald Trump’s announcement of a $500 billion partnership involving Oracle, OpenAI, and SoftBank for a new AI infrastructure initiative. This news sparked a significant rally in AI-related stocks, with Oracle shares jumping 7% and SoftBank shares soaring 11%. Semiconductor stocks, including Nvidia and Taiwan Semiconductor, also experienced notable gains.
José Torres, senior market analyst at Interactive Brokers, commented, “The combination of strong earnings and new AI investments is propelling stocks toward new highs. Despite potential economic headwinds, robust corporate profits are expected to sustain market growth.”
At the closing bell, the S&P 500 settled at 6,086.37, up 0.61%. The Dow Jones Industrial Average ended at 44,156.73, rising 0.3%, while the Nasdaq Composite finished at 20,009.34, up 1.28%.
However, some market observers expressed caution. Jamie Dimon, CEO of JPMorgan Chase, voiced concerns about the stock market appearing “kind of inflated.” Additionally, a Harvard economist predicted a potential recession in the latter half of Trump’s term if he were to be re-elected.
In commodities, West Texas Intermediate crude oil decreased by 0.47% to $75.47 per barrel, while Brent crude remained stable at $79 per barrel. Gold prices increased by 0.39% to $2,754 an ounce. The 10-year Treasury yield rose by two basis points to 4.601%.
The cryptocurrency market faced some pressure, with Bitcoin experiencing a decline of 1.82%, falling to $104,197. Analysts attribute this sell-off to a lack of policy announcements from Trump regarding the crypto sector.
As the market continues to digest earnings reports and political developments, investors remain cautiously optimistic about the future trajectory of US stocks.
