The S&P 500 hit another record high Wednesday, as Netflix surged following blowout quarterly results, while a strong report from ASML fueled gains in chipmakers.

Riding on Wall Street’s optimism, Microsoft rose 1.3% and hit a record high, lifting its market value above $3 trillion for the first time.

The S&P 500 hit an all-time high for the third time in four sessions, while the Nasdaq remained about 4% below its 2021 all-time intraday high.

Netflix jumped almost 12% to a two-year high after strong subscriber growth cemented investor confidence the firm has won the streaming wars with its password-sharing crackdown and a strong content slate.

The S&P 500 communication services index, which includes Netflix, rose 1.8% to a two-year high.

Alphabet, and Meta Platforms , part of the so-called Magnificent Seven group of heavyweights that drove much of 2023’s recovery in the S&P 500, each added more than 1%.

“Technology-enabled companies – the Magnificent Seven in particular and the AI theme – last year put up some ridiculous earnings and guidance. We will see over the next 10 days how that plays out, but early indications are certainly pretty positive,” said Mike Dickson, head of research at Horizon Investments.

Tesla rose 0.6% ahead of its fourth-quarter results due after the closing bell.

The Philadelphia SE semiconductor index jumped over 2% to a record high after upbeat results from manufacturing equipment maker ASML Holding pointed to a recovery in global chip demand.

Nvidia and Broadcom both jumped more than 4% and hit record highs. Traders exchanged over $24 billion worth of Nvidia shares as of mid-afternoon, more than any other stock on Wall Street, according to LSEG data.

AT&T shed almost 3% after forecasting annual profit below expectations, while DuPont De Nemours slumped 13%after forecasting a fourth-quarter loss.

The S&P 500 was up 0.37% at 4,882.58 points.

The Nasdaq gained 0.68% to 15,530.39 points, while the Dow Jones Industrial Average was up 0.01% at 37,909.55 points.

On the data front, a survey showed business activity picked up in January and inflation appeared to abate, suggesting that the economy kicked off 2024 on a strong note.

A resilient U.S. economy and uncertainty over the timing of interest rate cuts have led investors to reassess their bets on how quickly the Federal Reserve will cut rates this year.

Traders now see an 85.5% chance of a rate cut in May, according to CME Group’s FedWatch Tool. Traders previously expected a rate cut in as early as March.

Even as the S&P 500 rose, declining stocks outnumbered rising ones within index by a 1.5-to-one ratio.

The S&P 500 posted 64 new highs and 1 new lows; the Nasdaq recorded 117 new highs and 68 new lows.

© 2024 Thomson/Reuters. All rights reserved.

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