US close: Tech stocks lift markets after Trump's AI announcement

(Sharecast News) - US stocks rose on Wednesday, with the S&P 500 finished just under a record high, as the tech sector rose on the back of Donald Trump's artificial intelligence joint venture Stargate.

"After only the second full day in office, already the Trump effect is something markets have come to expect," said Danni Hewson, head of financial analysis at AJ Bell.

Well-received updates from blue chips like Netflix, Procter & Gamble and Johnson & Johnson were also providing a boost to sentiment.

The Dow rose 0.3%, the Nasdaq jumped 1.3% to top the 20,000 mark for the first time this year, while the S&P 500 gained 0.6% to 6,086.37, its highest close since hitting 6,090.27 on the 6 December.

On the macro front, US mortgage applications rose 0.1% in the week ended 17 January, according to the Mortgage Bankers Association of America, with applications to purchase a home edging 0.6% higher week-on-week, offsetting a 2.9% drop in applications to refinance an existing mortgage.

The yield on a 10-year US Treasury was up 2.3 basis points at 4.605%.

Tech stocks jump, Netflix gains

Shares in tech stocks jumped on Wednesday, as markets reacted to the Stargate AI news. The new US president unveiled the multi-billion dollar AI infrastructure project late on Tuesday, in conjunction with partners Microsoft-backed OpenAI, Oracle and SoftBank.

The White House plans to spend $100bn on technological infrastructure projects this year, and up to $500bn during the four-year term, although full funding details were not provided.

However, writing on X, Elon Musk poured cold water on the plans, claiming that two of the companies in the joint venture "don't actually have the money" - though this did not appear to affect market sentiment in the sector.

"Considering the bromance between tech guru Elon Musk and President Trump, there may have been a few raised eyebrows that the world's richest man wasn't involved. Not someone who likes to be left out of the limelight, Mr Musk has already thrown shade on the deal, coming out and saying the money isn't there," AJ Bell's Hewson said.

Oracle was one of the biggest gainers, adding another 7% after closing 7% higher on Tuesday. Nvidia, which supplies the hi-tech chips necessary to power AI, was up 5%, rival chip maker Arm Holdings was ahead 16% and Microsoft put on 4%.

Netflix shares were up double digits after the streaming giant posted fourth-quarter earnings and revenue that topped analysts' expectations.

Consumer goods business Procter & Gamble posted second-quarter earnings and revenue that came in ahead of expectations, driven by growing demand for a number of household staples.

Stronger-than-expected sales of cancer drugs helped healthcare giant Johnson & Johnson also beat forecasts with its fourth-quarter results on Wednesday, with guidance for 2025 meeting analysts' expectations.