S&P 500 ekes out another record high as Netflix, chipmakers leap
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., Jan 23, 2024. REUTERS/Brendan McDermid/File Photo
The S&P 500 climbed to its fourth straight record high close on Wednesday, as Netflix surged following blowout quarterly results and a strong report from ASML fueled gains in chipmakers.
Riding optimism about Wall Street’s most valuable companies, Microsoft hit an all-time high, lifting its market value above $3 trillion for the first time.
READ: Microsoft hits $3 trillion market value, second to Apple
The Nasdaq touched its highest since January 2022 and is now less than 4 percent below its record high close in November 2021.
Netflix jumped 10.7 percent 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 1.2 percent and also hit 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 gained over 1 percent.
READ: Can sizzling Magnificent Seven trade keep powering US stocks in 2024?
“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.
The S&P 500 climbed 0.08 percent to end the session at 4,868.55 points.
Even as the S&P 500 rose, declining stocks outnumbered rising ones within the index by a 2.5-to-one ratio.
The Nasdaq gained 0.36 percent to 15,481.92 points, while Dow Jones Industrial Average declined 0.26 percent to 37,806.39 points.
Volume on U.S. exchanges was relatively heavy, with 11.6 billion shares traded, compared to an average of 11.4 billion shares over the previous 20 sessions.
READ: Investors expand bets on tech stocks as sector still fuels market gains
Tesla dipped 0.6 percent and weighed on the S&P 500. The car maker was scheduled to report December-quarter results after the closing bell.
The Philadelphia SE semiconductor index rose 1.54 percent 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 2 percent and hit record highs. Traders exchanged over $34 billion worth of Nvidia shares, more than any other stock on Wall Street, according to LSEG data.
AT&T dropped 3 percent after forecasting annual profit below expectations, while DuPont De Nemours slumped 14 percent after forecasting a fourth-quarter loss.
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.
READ:Strong US retail sales underscore economy’s momentum heading into 2024
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 percent 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.
