Market News 23 jan
Record Highs and the Impact of the Tech Sector
On Wednesday, major US stock indices closed the trading session with solid gains. The S&P 500 rose by 0.61%, the Dow Jones Industrial Average added 0.30%, and the Nasdaq 100 climbed 1.33%. March futures for the S&P 500 and Nasdaq increased by 0.55% and 1.24%, respectively, continuing the positive trend seen earlier in the week.
The Impact of the Tech Sector
Technology stocks once again served as the primary driver of growth. Netflix ($NFLX) posted an impressive gain of over 9% after reporting strong fourth-quarter results. Oracle ($ORCL), building on Tuesday’s success, rose by more than 6% following the announcement of a partnership with SoftBank and OpenAI on a $100 billion project to fund artificial intelligence (AI) infrastructure. AI-related initiatives further boosted Nvidia ($NVDA) and Microsoft ($MSFT), which both grew by over 4%, while ARM Holdings Plc ($ARM) surged 15%.
Trade Policy and Its Implications
Pressure on stocks eased somewhat due to statements about a potential revision of trade tariffs. US President Donald Trump announced plans to refrain from imposing new tariffs on China and Europe. However, long-term plans include raising tariffs on goods from Canada and Mexico starting February 1 and discussing a 10% tariff on imports from China.
Economic Data
Mortgage market data showed a slight 0.1% increase in applications over the week. Meanwhile, leading indicators for December declined by 0.1%, aligning with analysts’ expectations. Additionally, earnings season continues to gain momentum, with forecasts for S&P 500 companies’ fourth-quarter earnings indicating an expected annual growth of 7.5%.
International Markets
Global stock markets ended the day mixed. The European Euro Stoxx 50 index rose by 0.77%, reaching a 24-year high, while China’s Shanghai Composite fell by 0.89%, and Japan’s Nikkei climbed by 1.58%.
Bond Market
The yield on US 10-year Treasury bonds increased by 1.5 basis points to 4.591%. Reduced interest in bonds was attributed to the S&P 500 reaching new highs and the offering of $13 billion in 20-year Treasury bonds. However, strong demand during the auction helped offset some of the pressure.
Top Gainers and Losers
Among the top gainers were Netflix ($NFLX) (+9.7%), Oracle ($ORCL) (+6%), and ARM Holdings Plc ($ARM) (+15%). Conversely, Agilysys ($AGYS) fell by 19% due to revised revenue forecasts for 2025, while Edison International ($EIX) dropped by 6% following a legal ruling in California.
Outlook
The stock market has shown a strong start to the year, driven by steady demand for technology stocks and optimism around AI. However, risks associated with trade tariffs and geopolitical uncertainty persist. Analysts continue to closely monitor developments in global markets and corporate earnings to assess future growth prospects.