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The US S&P 500 index hit a new intraday high on Wednesday after Netflix’s stellar results fueled a rally driven by US President Donald Trump’s wave of “America First” policy announcements.
The U.S. blue-chip stock index rose 0.9 percent in midday trading in New York, surpassing its previous intraday high in early December, to hit 6,100 for the first time. It then gave up some of those gains to close up 0.6 percent.
The S&P 500 recorded its best gain in five sessions last week since Trump’s election victory.
Netflix, whose fourth-quarter results released overnight beat analysts’ forecasts, gained 9.7 percent, pulling other technology stocks higher. Oracle jumped 6.8 percent and Microsoft jumped 4.1 percent after joining other tech titans, including OpenAI, in 2017. announce plans for a new large-scale American artificial intelligence project.
The tech-heavy Nasdaq Composite index rose 1.3 percent to near its mid-December intraday high.
Wednesday’s gains come as Trump used his first three days in office to threaten new tariffs against U.S. allies while promising to end a period of American “decline.”
Expected cuts in corporate tax rates and financial deregulation have boosted investors’ sense of optimism, a week after some of the country’s biggest banks reported sharply higher profits thanks to a recovery in trading and exchanges.
The Stoxx Europe 600 also hit a high on Wednesday as fears over U.S. tariffs eased and investors bought cheaper European stocks following strong corporate profits.
Europe’s general index rose 0.9 percent to a record high of 530.55, fueled by gains in some of Europe’s biggest companies such as Danish pharmaceutical maker Novo Nordisk and Germany’s Adidas.
It closed up 0.4 percent after shedding some of its gains.
Frankfurt’s Dax added 1 percent – after also hitting a new high – led by a 6 percent gain for Adidas after its strong annual results.
Luca Paolini, chief strategist at Pictet Asset Management, said that a “risk-friendly environment [was] “We are lifting all boats, especially the weakest,” aided by other factors, including concerns about a slight easing of U.S. tariffs.
Despite repeated threats, Trump has yet to impose new tariffs on goods exported to the United States from the bloc.
“There is some relief that Trump is more lenient than the market thought,” said Emmanuel Cau, an analyst at Barclays.
“THE [European] The market is not really afraid of Trump anymore because it looks like he is trying to trade,” he said.
London’s FTSE 100 index also set a new intraday record before falling and closing flat.
The highs came after a Bank of America survey of European fund managers this week showed investors increased their allocations to European stocks as fears grew over high valuations on Wall Street.
Just 19 percent of fund managers were “overweight” on U.S. stocks in January, down from a record 36 percent the month before. It was the biggest rotation from U.S. stocks to euro zone stocks in almost a decade, the bank said.
Trump said Tuesday his administration plans to impose a 10% tariff on Chinese imports as early as next month. On Monday, he revealed that he would enact tariffs of 25 percent against Mexico and Canada from February 1.
