US: S&P 500 hits record high with boost from Netflix results, AI investment plan

WALL Street’s indexes rose on Wednesday, with the benchmark S&P 500 hitting an intraday record high as investors cheered streaming video provider Netflix’s quarterly report and President Donald Trump’s private-sector artificial intelligence infrastructure investment plan.

The technology sector advanced 2.5 per cent and was the biggest gainer among the S&P 500’s 11 major industry indexes with its biggest boosts from AI heavyweights Nvidia and Microsoft.

Netflix, the S&P’s biggest gainer, finished up 9.7 per cent after reporting a record number of subscribers for the holiday quarter, enabling it to increase prices for most service plans.

Investors piled bets into the promise of AI the day after Trump announced a US$500 billion private-sector AI infrastructure investment plan from a venture involving Oracle, OpenAI and SoftBank, even though there was no clarity on funding.

But of the 11 major industry sectors only tech and communications services, up 1.1 per cent, notched daily gains while the biggest decliner utilities, lost 2.2 per cent.

“This is just the excitement about the technology investments,” said Irene Tunkel, chief US equity strategist at BCA Research, noting the market’s narrow breadth on Wednesday. “Everything else just cannot compete with it.”

Shares in Oracle rallied 6.8 per cent while US traded shares of ARM Holdings, a chip technology supplier that is roughly 90 per cent owned by SoftBank, rose 15.9 per cent. Server maker Dell added 3.6 per cent.

“It’s a story of big tech and everything else is hanging in there,” said Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management, who attributed much of Wednesday’s rally, particularly in chip stocks, to the AI announcement.

“The direct beneficiary, at least the beginning would be the semiconductor space,” he said pointing to outperformance in the Philadelphia semiconductor index, which closed up 1.7 per cent.

But without funding clarity, Stucky described the news as “more of a pie in the sky kind of investment story.”

The S&P 500 ended up 37.13 points, or 0.61 per cent, to 6,086.37 just a few points below its last record closing high of 1090.27, reached on Dec 6.

The Nasdaq Composite gained 252.56 points, or 1.28 per cent, to 20,009.34 while the Dow Jones Industrial Average rose 130.92 points, or 0.30 per cent, to 44,156.73

Risk appetites have been boosted recently by strong economic data and cooling inflation along with Trump’s more moderate than feared approach to tariffs since his Monday inauguration.

However, investors are still cautiously watching for the president’s trade plans due to inflation concerns after he warned that tariffs on imports from China, Mexico, Canada and the European Union could be issued on Feb 1.

The president has ordered federal agencies to complete comprehensive reviews of a range of trade issues by April 1 – the date that analysts at Barclays say markets should focus on.

In individual stocks, Procter & Gamble advanced 1.9 per cent after beating second-quarter estimates, driven by growing demand for its household items in the United States.

Johnson & Johnson shares fell 1.9 per cent although the drugmaker reported fourth-quarter results above estimates.

After rising on Tuesday, Ford sank 3.8 per cent as Barclays downgraded the stock. Textron shares fell 3.4 per cent after it forecast 2025 profit below estimates.

Halliburton slipped 3.6 per cent after warning of softer North America activity this year and posting downbeat quarterly revenue.

Declining issues outnumbered advancers by a 1.55-to-1 ratio on the NYSE where there were 271 new highs and 57 new lows.

On the Nasdaq, 1,835 stocks rose and 2,571 fell as declining issues outnumbered advancers by a 1.4-to-1 ratio. The S&P 500 posted 39 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 104 new highs and 95 new lows.

On US exchanges, 13.89 billion shares changed hands, below the 15.33 billion average for the last 20 sessions. AFP