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The US’s S&P 500 hit a new intraday-high on Wednesday after bumper Netflix results added fuel to a rally driven by US President Donald Trump’s flurry of “America First” policy announcements.
The US blue-chip share index rose as much as 0.9 per cent by midday in New York, pushing past a previous intraday high from early December, to hit 6,100 for the first time. It later gave up some of those gains to close up 0.6 per cent.
The S&P 500 last week posted its best five-session gain since Trump’s election win.
Netflix, whose fourth-quarter earnings published overnight blew past analysts’ forecasts, gained 9.7 per cent, pulling other technology stocks higher. Oracle jumped 6.8 per cent and Microsoft added 4.1 per cent after they joined other tech titans, including OpenAI, in announcing plans for a sweeping new US artificial intelligence project.
The tech-heavy Nasdaq Composite rose 1.3 per cent to within touching distance of its mid-December intraday high.
Wednesday’s gains come as Trump has used his first three days in office to threaten new tariffs against US allies while promising to end a period of American “decline”.
Expected cuts to corporate tax rates and financial deregulation have added to investors’ sense of optimism a week after some of the countries’ largest banks reported sharply higher profits on a recovery in dealmaking and trading.
The Stoxx Europe 600 also hit a high on Wednesday as fears over US tariffs eased and investors bought cheaper European stocks following strong corporate earnings.
The broad-based European index rose as much as 0.9 per cent to a record high of 530.55, fuelled by gains for some of Europe’s largest companies such as Danish drugmaker Novo Nordisk and Germany’s Adidas.
It closed up 0.4 per cent after shedding some of its gains.
Frankfurt’s Dax added 1 per cent — after also reaching a fresh high — led by a 6 per cent gain for Adidas following its strong full-year results.
Luca Paolini, chief strategist at Pictet Asset Management, said a “risk-on environment [was] lifting all boats, especially the weakest”, helped by other factors, including concerns over US tariffs easing a little.
In spite of repeated threats, Trump has yet to impose new tariffs on goods exported to the US from the bloc.
“There is a bit of relief on the view that Trump is more soft than the market thought,” said Emmanuel Cau, an analyst at Barclays.
“The [European] market is not that scared of Trump any more as he gives the impression that he is trying to negotiate,” he said.
London’s FTSE 100 also set a new intraday record before turning lower, closing flat.
The highs came after a Bank of America survey of European fund managers this week showed investors had raised their allocations to European equities as fears grew over high valuations on Wall Street.
Only 19 per cent of fund managers were “overweight” US stocks in January, down from a record 36 per cent the previous month. The shift was the biggest rotation from US stocks into Eurozone stocks in almost a decade, the bank said.
Trump on Tuesday said his administration was discussing imposing a 10 per cent duty on Chinese imports as early as next month. On Monday he revealed he would enact tariffs of 25 per cent against Mexico and Canada as soon as February 1.
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