U.S. stock indexes gained ground on Wednesday, buoyed by stronger-than-expected earnings from major tech companies and growing enthusiasm over the profit potential of artificial intelligence (AI).
The S&P 500 rose by 0.5 percent in early trading, marking its sixth increase in the past seven sessions. The Dow Jones Industrial Average was up 97 points or 0.2 percent, while the Nasdaq Composite gained 1 percent.
Netflix led the charge, surging 13 percent after the streaming giant reported a robust quarterly performance.
The company added nearly 19 million new subscribers, driven by live events such as NFL games and the highly publicized Mike Tyson-Jake Paul fight. Netflix also exceeded Wall Street’s profit expectations and announced plans to raise subscription prices.
Seth Wenig/AP
Why It Matters
The strong results from Netflix are part of a broader trend, with many companies surpassing analyst profit estimates for the fourth quarter of 2024.
This is providing a much-needed boost to stock prices, especially as higher Treasury yields have put pressure on equities in recent months.
Analysts have speculated that former President Donald Trump‘s anticipated policies could help fuel further gains in the crypto sector.
What To Know
Procter & Gamble, the consumer goods giant behind brands such as Charmin, Crest and Pampers, rose 3.4 percent after posting better-than-expected earnings and revenue for the latest quarter.
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Despite challenges from rising commodity costs and a stronger U.S. dollar, the company reaffirmed its financial forecasts for the full fiscal year.
United Airlines also saw its stock climb 3.2 percent after reporting stronger-than-expected profit and revenue.
Which Companies Are Doing Best in the Stock Market?
The biggest gains, however, came from companies tied to artificial intelligence. Oracle rose 6.8 percent, adding to its 7.2 percent increase from the previous day.
The surge followed the announcement of Stargate, a joint venture with OpenAI and SoftBank aimed at developing data centers and powering AI innovation in Texas.
The White House confirmed that the initiative will involve up to $500 billion in investment, marking a significant commitment to AI infrastructure.
SoftBank’s stock in Tokyo surged 10.6 percent, reflecting investor excitement over the partnership’s potential.
Other AI-related stocks also saw significant gains, with Nvidia, a leader in AI chip technology, rising 2.7 percent. Nvidia’s stock has already seen astronomical gains, having nearly octupled in value over the past two years.
International markets followed suit, with European indexes posting gains after a mixed performance in Asia. In the bond market, the 10-year Treasury yield remained steady at 4.57 percent, still elevated from its September lows of below 3.65 percent.
Meanwhile, the cryptocurrency market continued its bullish run, with bitcoin holding above $104,000, despite setting a record high above $109,000 on Monday.
What People Are Saying
Scott Kirby, United Airlines CEO, said the airline is experiencing strong demand, fueling optimism for continued growth through 2025.
What Happens Now
With strong corporate earnings and AI investments driving optimism, U.S. markets are positioning for continued growth, despite higher bond yields.
Investors will be closely watching the next round of earnings reports and developments in AI technology as they assess the outlook for 2025.
This article contains additional reporting from The Associated Press.
