US stock indexes are experiencing a notable upswing, fueled by robust earnings reports from technology companies and the burgeoning excitement surrounding artificial intelligence (AI). The S&P 500 is on track to surpass its all-time high, while the Nasdaq composite is showing a significant increase.
US stock indexes are experiencing a surge today, propelled by robust profits reported by technology companies like Netflix and Oracle . This upward trend is further fueled by the growing excitement surrounding the potential of artificial intelligence (AI) to drive revenue. The S&P 500 is up 0.8% in midday trading, poised to surpass its all-time high set earlier this month. The Dow Jones Industrial Average has added 136 points, or 0.3%, while the Nasdaq composite is showing a 1.5% increase.
Netflix is leading the charge after announcing the addition of nearly 19 million subscribers during the latest quarter. Attributed to live events such as football games and the Mike Tyson-Jake Paul fight, this subscriber growth exceeded analysts' expectations. The streaming giant also reported stronger-than-expected profits and announced plans to increase subscription prices in the United States and other countries. Netflix shares jumped 11.1% on this positive news. This impressive performance aligns with a growing trend of companies surpassing profit expectations for the end of 2024, providing a much-needed boost to their stock prices amidst the recent downward pressure caused by rising Treasury yields.These rising yields, partly attributed to concerns about persistent inflation and the increasing US government debt, had temporarily halted the record-breaking stock market run that extended through 2024. However, companies like Procter & Gamble, Travelers, and Oracle are defying these headwinds. Procter & Gamble, the company behind well-known brands like Charmin, Crest, and Pampers, reported both stronger profit and revenue figures than anticipated for the latest quarter. Despite rising commodity costs and the strengthening US dollar, the company reaffirmed its financial projections for the full fiscal year. Travelers also exceeded profit expectations, attributing its success to gains from investments and growth in net written premiums. These gains offset losses incurred due to Hurricane Milton and other catastrophic events.The AI sector is driving some of the most significant upward movements in the market. Oracle, for instance, surged 6.5% following a previous 7.2% gain. This surge is linked to the anticipated announcement of Stargate, a joint venture between Oracle, OpenAI, and SoftBank. This partnership, with a potential investment of up to $500 billion, aims to establish data centers and energy generation infrastructure to support further AI development in Texas. SoftBank Group's Tokyo-listed stock also jumped 10.6% on this news. Other AI-related companies are also experiencing strong performance, particularly Nvidia, whose chips are powering much of the AI revolution. Nvidia's stock price has risen 3.9% and is now above $146, a remarkable jump from its price below $18 just two years ago. This positive momentum in the AI sector is helping to offset a 4% drop in Textron's stock. Although Textron exceeded profit expectations for the latest quarter, its revenue fell short of forecasts, and its projected profit for the coming year fell short of some analysts' expectations. Meanwhile, in the bond market, the 10-year Treasury yield rose to 4.60% from 4.57% late Tuesday. While this increase followed a previous decline spurred by encouraging inflation data last week, it remains significantly higher than the 3.65% level seen in September. BlackRock Investment Institute strategists anticipate sustained high interest rates due to factors such as an aging workforce and the US government's substantial debt levels. They note that investors are demanding higher compensation for holding long-term bonds, pushing the term premium to a decade high.For the stock market to maintain its resilience and continue its upward trajectory despite the impact of high interest rates, companies will need to demonstrate consistent and robust profit growth. BlackRock's Boivin sees encouraging signs in this regard. In the cryptocurrency market, which has experienced a surge fueled by hopes of a more favorable regulatory environment under President Donald Trump, Bitcoin traded below $104,000. After hitting a record high of over $109,000 on Monday, some skepticism remains following Trump and his wife's launch of meme coins, which critics perceive as an opportunistic cash grab
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