The S&P 500 rose to an all-time high of 6,104 at 1:25 a.m. ET on 23rd January as US President Donald Trump called for lower interest rates, urged OPEC to drop oil prices, and warned global businesses of steep tariffs if they manufacture outside the US during his remote speech at the World Economic Forum in Davos.
“I’ll demand that interest rates drop immediately. And likewise, they should be dropping all over the world,” the Republican said. “I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil.”
Note that the S&P 500 index reached the 5,000 mark only nine months ago. Trump’s election victory in November, cooling US Core CPI inflation data for December, a low unemployment rate, and expectations of lower corporate taxes played a key role in the benchmark’s steady growth.
S&P500 Rally Boosted By £405B Stargate AI Project
The US markets are still catching up with Trump’s sweeping policy changes since assuming Office this week. He described his big AI push, the £405 billion ($500 billion) Stargate AI project, as a “declaration of confidence in America.”
The project will immediately deploy £81.09 billion ($100 billion) and the remaining over the next four years to build AI infrastructure and colossal data centres.
He announced the historic project from the White House, with SoftBank chair Masayoshi Son, OpenAI CEO Sam Altman, and Oracle co-founder Larry Ellison. The development sparked a strong Oracle (NYSE: ORCL) stock rally, lifting share prices over 16% to £150.15 ($185.62) in the past five days.
Market Optimism Fueled By Strong Earnings Season
Netflix (NASDAQ: NFLX) posted a record £808.93 million ($10 billion) in operating income for 2024 as total membership surged to 302 million. The stock price jumped over 13.7% this week to trade at £793.82 ($981.31). The strong results enabled the company to hike US subscription plan costs by up to £1.62 ($2) a month.
Earlier this month, the banking giants also broke records on multiple fronts. JPMorgan (NYSE: JPM) recorded its biggest annual profit in 2024. Furthermore, BlackRock (NYSE: BLK) posted a record £9.44 trillion ($11.6 trillion) in assets, while Goldman Sachs (NYSE: GS) witnessed profits double in the latest quarter.
“The combination of a resilient economy, easing inflation, stabilisation in interest rates, an earnings season off to a strong start, and less day-one focus on tariffs by President Trump has provided a solid backdrop for the market,” Truist’s Keith Lerner told CNBC.
While all these bullish developments in a short span have buoyed America’s main stock index, JPMorgan Chief Jamie Dimon cautioned this week that the US stock market is inflated, citing concerns around inflation, geopolitical volatility, and deficit spending risks.
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