S&P 500 hits intraday record amid strong earnings surge

Note: Figures recorded at 7:40am AEDT. Updated figures and a video recording will be available at 9am AEDT.

The S&P 500 rose Wednesday and edged closer to the 5,000 level for the first time, hitting a new intraday record as investors parsed through another slate of quarterly results that signalled a flourishing economy.

The broad-based index, which first breached the 4,000 level in April 2021, added 0.9%, while the Nasdaq Composite jumped 1%. The Dow Jones Industrial Average rallied 188 points, or 0.5%.

Stocks rallied as investors weighed a fresh batch of strong corporate profits and major technology behemoths continued their march higher. Microsoft climbed about 2% to trade near fresh highs, while Meta Platforms surged 2.9%. Alphabet and Amazon rose 0.9% each. Enphase Energy popped 16% after the solar company said its inventory glut may be nearing a bottom, boosting other solar stocks in sympathy. Ford gained 5% after beating Wall Street’s fourth-quarter estimates and issuing higher-than-expected guidance, while Chipotle Mexican Grill climbed 9% on strong earnings and traffic.

Nvidia’s price has grown by 2%, propelled by Wall Street's optimism regarding artificial intelligence, is poised to surpass Amazon's market capitalisation for the first time in two decades, closing in on Google-owner Alphabet's value as well. With a 40% surge in 2024 and an elevated market capitalization of US$1.715 trillion, Nvidia's position as the fifth most valuable US company underscores its pivotal role in meeting the escalating demand for AI technology across various sectors, bolstered by partnerships with tech giants like Meta Platforms.

Saudi Aramco has a $US2-trillion market capitalisation, making it the world’s third most valuable publicly listed company, according to LSEG data. However, over 90 per cent of that company is closely held by the government of Saudi Arabia and less than 2 per cent of its shares are available for trading by investors.

Walt Disney, PayPal and Arm Holdings are scheduled to report quarterly results after the market closes.

A better-than-expected earnings season, coupled with upbeat guidance, has been a source of strength for the market in recent weeks, illustrating that consumer spending is healthy and that the economy remains resilient in the face of high interest rates.

The advance comes despite a recent retreat in 2024 rate expectations following cautious commentary from the central bank. Fed Chair Jerome Powell signalled last week that investors will have to wait longer than previously thought for a pivot, while Minneapolis Federal Reserve President Neel Kashkari said Wednesday that he anticipates only two to three rate cuts this year.

Wednesday’s price action may also be a sign that investors are “growing more comfortable” with this notion of later-than-expected rate cuts, said Chris Hussey, managing director at Goldman Sachs.

In other news, New York Community Bancorp shares were volatile after Moody’s downgraded its credit rating to junk. Shares have fallen about 35% in February alone after the bank posted a surprise fourth quarter loss and slashed its dividend amid rising commercial real estate losses. 

Figures around the globe

European markets closed lower. London’s FTSE fell 0.68 per cent, Frankfurt lost 0.65 per cent, and Paris closed 0.36 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 0.11 per cent, Hong Kong’s Hang Seng lost 0.34 per cent and China’s Shanghai Composite gained 1.44 per cent higher.

Yesterday, the Australian share market closed 0.45 per cent higher at 7,615.84

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Incitec Pivot Ltd (ASX:IPL)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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