NEW YORK: The S%P 500 climbed to its fourth straight record high close on Wednesday (Jan 24), as Netflix surged following blowout quarterly results and a strong report from ASML fuelled gains in chipmakers.
The Dow Jones Industrial Average fell 99.06 points, or 0.26%, to 37,806.39, the S&P 500 gained 3.95 points, or 0.08%, to 4,868.55 while the Nasdaq Composite gained 55.98 points, or 0.36%, to 15,481.92.
The Nasdaq touched its highest since January 2022 and is now less than 4% below its record high close in November 2021. It was boosted by a 1.5% gain in the Philadelphia Semiconductor index as ASML’s report drew investors to the sector broadly.
Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, said that after coming under pressure recently, “Nasdaq is playing a bit more catch-up today on the back of the semiconductor space.”
Riding optimism about Wall Street's most valuable companies, Microsoft hit an all-time high, lifting its market value above US$3 trillion (RM14.2 trillion) for the first time.
Netflix jumped 10.7% 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% 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%.
“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 dipped 0.6% and weighed on the S&P 500. The carmaker was scheduled to report December-quarter results after the closing bell.
Nvidia and Broadcom both jumped more than 2% and hit record highs. Traders exchanged over US$34 billion worth of Nvidia shares, more than any other stock on Wall Street, according to LSEG data.
AT&T dropped 3% after forecasting annual profit below expectations, while DuPont De Nemours slumped 14% 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.
A resilient US 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. – Reuters