S&P 500 closes just shy of record high amid tech-led rally

4:12pm: Netflix hits record high

Stocks finished Wednesday’s trading session strong, with the S&P 500 closing up 0.6% just shy of its record high of 6,090 points at 6,086 points.

The Nasdaq added 1.3% at 20,008 points and the Dow Jones was up 0.3% at 44,156 points.

Netflix surged 9.7% to close at an all-time high of $953.99 as investors welcomed its latest quarterly earnings report. 

2:34pm: Can the rally last?  

Stocks remained in record high territory in the early afternoon with the Nasdaq up 1.2%, the S&P 500 just shy of its new record high up 0.7% at 6,091 points, and the Dow Jones up 0.3%.

“The market is rallying into Trump’s second presidency, as he proves the dominant driver of risk sentiment for global markets,” XTB research director Kathleen Brooks said in a statement. 

“The Nasdaq does not look oversold from a technical standpoint, so this could be the start of another leg higher in the US stock market rally, even if valuations remain high.”

Brooks added that it was an encouraging sign that the market rally is broadening out, with a growing number of companies on the S&P 500 trading above their 200-day simple moving average.

“It’s been a long time coming, and there finally seems to be some breadth in the market,” Brooks sasid. “Growing market breadth, steady rates and positive earnings reports are proving a heady mix for investors.”

12:32pm: Stargate signals shift in AI trade

Stargate, a new major AI infrastructure collaboration between OpenAI, Softbank and Oracle Corp (NYSE:ORCL, ETR:ORC) will have major implications for the “AI trade,” analysts at UBS believe.

The project, which is set to invest $500 billion over the next four years starting with an initial $100 billion, aims to secure American leadership in AI.

Analysts believe the initiative will secure enormous capacity for OpenAI in its race against Google, Meta, xAI and Anthropic.

The collaboration also positions Oracle as a key GPU infrastructure provider, ending an exclusive computer relationship between Microsoft and OpenAI that has allowed the AI firm to scale up.

“In our view, this is a clear net positive for Oracle shares and its Oracle Cloud Infrastructure (OCI) trajectory in the coming years,” they wrote.

Oracle shares added 7% at about $185 on the announcement, while Softbank’s US-listed shares added 10%.

This boosted tech stocks more broadly, with the Nasdaq adding 1.5%. The S&P 500 was up 0.8%, hitting a new record high of 6,100 points around noon, and the Dow Jones gained 0.3%. Nvidia was up 4.1%, Arm Holdings surged 14% and Microsoft added 3.9%.

11:30am: Fresh risk-on move

US stocks were buoyed by Netflix’s strong results as the US dollar attempted to stage a comeback.

“Thoughts of tariffs have been banished, if only briefly, from investors’ minds thanks to another set of stellar numbers from Netflix,” IG chief market analyst Chris Beauchamp commented.

“The end of 2024 saw a lot of worry about whether such tech stocks could justify their eye-watering valuations. Netflix, at least, has proved it is worthy of its premium rating.”

Netflix shares gained more than 11% to trade at $966 late morning on Wednesday.

“The news has bolstered risk appetite across the board, and the S&P 500 finds itself knocking on the door of a new record high, joining those set by the FTSE 100 and Dax in recent sessions,” Beauchamp commented.

“Notably the dollar has edged higher against the yen despite the likelihood of a BoJ rate hike this week – worries about tariffs and their impact may well cause Japanese policymakers to err on the side of caution when making predictions about the path of rates further into 2025.”

9:56am: Nasdaq powers Wall Street gains at open

Wall Street stock indices all moved higher at Wednesday's open, led by tech giants. 

The Nasdaq Composite advanced 1.3% early trading, with the S&P 500 climbing 0.6% to 6,087, just a few points from its historic high from late last year. 

Netflix is marching at the head of the tech titans in the S&P list, up 13%, followed by a 9% gain for Oracle. 

The Dow Jones added 0.3% and the Russell 2000 dipped 0.2% after strong gains the day before. 

7:35am: Netflix to drive Nasdaq gains

US stocks are set to head higher again on Wednesday, led by the tech-powered Nasdaq and with a continued focus on new policy announcements from the White House as well as Netflix after its impressive update overnight.

Nasdaq 100 futures were up 0.9%, with S&P 500 futures pointing to gains around 0.5% and those for the Dow Jones 0.3%, with the Russell 2000 called just above flat.

Yesterday, the New York stock benchmarks neared new records as investors weighed up the new administration's first moves on the first day of trading post-inauguration.

The Dow added more than 500 points or 1.2%, while the S&P 500 added 0.9% and the Nasdaq added 0.6% at 19,756 points, with the best performance coming from the Russell 2000 as it gained 1.85%.

Tech stocks are in the limelight following the announcement that the likes of OpenAI, SoftBank and Oracle are set to team up in a joint venture called Stargate, with Trump unveiling a US$500 billion plan for the US AI infrastructure network.

Oracle shares shot up 7% yesterday and in pre-open are heading another 8% today, while Nvidia is up 3% pre-market to add to the 2% gain yesterday, after it re-took the 'biggest company' crown from Apple.  

These gains are very likely to be bested by Netflix Inc, where ib pre-market trading the shares have skyrocketed almost 15% after the streaming service added a record 18.9 million subscribers during the fourth quarter and raised its revenue outlook.

"Netflix blew past the market expectations last quarter and closed the year on a very high note," says analyst Ipek Ozkardeskaya at Swissquote Bank.

"And it’s not even due to a pandemic or a temporary situation (like the Squid Game peak). It’s because their strategic bet of streaming major live sport events is paying off and hints at a further upside potential. Even more so as the company is planning to raise the price of its services in the US, Canada, Portugal, and Argentina between $1-1.5 depending on the plan which could bring up to $1bn additional revenue to the company."

The dollar is softer again today, with the pound and euro both up 0.1%, while the dollar index is down 0.2%.