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The US S&P 500 Index hit a new record high after Netflix’s stellar results fueled a rally driven by US President Donald Trump’s wave of “America First” policy announcements.
The blue-chip US large-cap index actions rose 0.8% at noon in New York, surpassing the previous intraday high of 6,099.97 reached on December 6.
The S&P 500 recorded its best gain in five sessions last week since Trump’s election victory.
Netflix, whose fourth quarter results published overnight exceeded analysts’ forecasts, gained 11% on Wednesday, dragging other technology stocks up. Oracle jumped 6% after joining other tech titans, including OpenAI, in announcing plans to launch a new artificial intelligence project in the United States.
The tech-heavy Nasdaq Composite index rose 1.5 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 record 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 then rose 0.3 percent after losing some of its gains.
Frankfurt’s Dax was up 0.9 percent in late afternoon trading – after hitting a new high – led by a 6.5 percent gain for Adidas after its strong annual results.
Luca Paolini, chief strategist at Pictet Asset Management, said a “risk-friendly environment was lifting all boats, especially weaker ones”, helped by other factors including concerns over a slight easing of tariffs Americans.
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) market is no longer so afraid of Trump because he gives the impression that he is trying to negotiate,” he said.
London’s FTSE 100 index also set a new intraday record before falling, down 0.2 percent in late afternoon trading.
The highs came after a Bank of America survey of European fund managers this week showed that 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 also said Tuesday that his administration plans to impose a 10% tariff on Chinese imports as early as next month. He revealed Monday that he would enact tariffs of 25 percent against Mexico and Canada from February 1st.