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The U.S. S&P 500 hit a new intraday high on Wednesday after stellar Netflix results added fuel to the rally sparked by U.S. President Donald Trump’s flurry of “America First” policy announcements.
The U.S. blue-chip stock index rose as much as 0.9 percent by midday in New York, surpassing a previous intraday high in early December and reaching 6,100 for the first time. It later gave back some of these gains and closed with a gain of 0.6 percent.
The S&P 500 posted its best five-session gain last week since Trump’s election victory.
Netflix, whose fourth-quarter results released overnight beat analysts’ forecasts, rose 9.7 percent, dragging other technology stocks higher. Oracle rose 6.8 percent and Microsoft rose 4.1 percent after joining other tech titans including OpenAI announce plans for a comprehensive new US artificial intelligence project.
The tech-heavy Nasdaq Composite rose 1.3 percent, within touching distance of 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 the period of American “decline.”
Expected cuts in corporate tax rates and deregulation of the financial sector have boosted investor optimism, a week after some of the country’s largest banks reported sharply higher profits on a rebound in deal-making and trading.
The Stoxx Europe 600 also hit a high on Wednesday as fears about U.S. tariffs eased and investors bought cheaper European stocks following strong corporate earnings.
The broad European index rose as much as 0.9 percent to a record high of 530.55, boosted by gains from some of Europe’s largest companies such as Danish drugmaker Novo Nordisk and Germany’s Adidas.
It closed up 0.4 percent after losing some of its gains.
Frankfurt’s Dax rose 1 percent – after also hitting a new high – led by a 6 percent gain for Adidas following its strong full-year results.
Luca Paolini, chief strategist at Pictet Asset Management, said that “a risky environment lifts all boats, especially the weakest ones,” supported by other factors including concerns about a slight easing of U.S. tariffs.
Despite repeated threats, Trump has not yet imposed new tariffs on goods exported from the bloc to the United States.
“There is some relief that Trump is softer than the market thought,” said Emmanuel Cau, an analyst at Barclays.
“The (European) market is no longer very afraid of Trump because he gives the impression that he is trying to negotiate,” he said.
London’s FTSE 100 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 had increased their allocations to European stocks as fears of lofty valuations grew on Wall Street.
Only 19 percent of fund managers were “overweight” in U.S. stocks in January, down from a record 36 percent the previous month. The shift is the biggest rotation from U.S. stocks to euro zone stocks in nearly a decade, the bank said.
Trump said Tuesday his administration is considering imposing a 10 percent tariff on Chinese imports as early as next month. On Monday he announced that he would impose tariffs 25 percent against Mexico and Canada already on February 1st.
