In the early morning of the 25th, Beijing time, U.S. stocks continued to rise in midday trading on Wednesday, with technology stocks leading the gains. The S&P 500 hit a new intraday high,
The Dow rose 126.51 points, or 0.33%, to 38031.96 points; the Nasdaq rose 165.87 points, or 1.08%, to 15591.81 points; the S&P 500 rose 33.18 points, or 0.68%, to 4897.78 points.
The S&P 500 index rose to 4901.29 points on Wednesday, setting another intraday record high.
Microsoft rose 1.36%, with a market value of $3.005 billion.
Earnings reports remain the focus of traders. Netflix shares soared after the streaming company said it added more than 13 million subscribers in the fiscal fourth quarter, bringing its total subscriber base to a record high of 260.8 million. Netflix's revenue topped analysts' expectations, and its profit guidance for the quarter also topped analysts' expectations.
Jamie Lumley, senior analyst at ThirdBridge Group, said Netflix's subscriber growth "suggests continued growth in the ad-tier business, especially the scale-up late last year, and that the company's momentum building and crackdown on password sharing are paying off."
The streaming giant's shares surged, adding to a strong rally in big tech stocks going into 2024. Driven by the rise in technology stocks, the S&P 500 Index has recently reached record highs and officially started a new bull market.
Tesla, Las Vegas Sands and IBM will report earnings after the close on Wednesday.
More than 15% of S&P 500 companies have reported financial results so far, with more than 70% beating Wall Street expectations, according to FactSet.
U.S. stocks closed mixed on Tuesday, with the Dow Jones Industrial Average closing slightly lower. The S&P 500 rose 0.29% to hit a new all-time closing high. The Nasdaq Composite rose 0.43%.
On the economic data front, U.S. business activity recorded its largest increase in seven months in January as rising orders made service providers and manufacturers more confident about the demand outlook.
The S&P Global Composite Index rose to an initial reading of 52.3, mainly driven by increased activity in the services sector. An index above 50 indicates expansion. Boosted by stronger domestic demand, a measure of output expectations for the coming year climbed to its highest level since May 2022.
Analysts pointed out that data showed that the output of goods and services in the United States in January hit the fastest growth rate since June last year, and the improvement in demand conditions has taken the growth momentum to a higher level. New order inflows have now picked up for three consecutive months, helping to boost business confidence in the year ahead to the most optimistic level since May 2022.
Sales price inflation is now below the pre-pandemic average, as January's price growth was the slowest since the pandemic lockdowns began in early 2020. Cost pressures will need to be watched closely in the coming months as supply delays intensify and the labor market remains tight, but for now the survey sends a clear and welcome message that economic growth is resilient and inflation has weakened significantly.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said that judging from PMI data, the U.S. economy has had an encouraging start this year, with business growth accelerating significantly and inflationary pressures cooling sharply.
Markets this week will focus on Thursday's fourth-quarter GDP estimate and Friday's personal consumption expenditures (PCE) report. Investors will look for more clues on the outlook for the Fed's monetary policy.
As the Federal Reserve interest rate meeting approaches, investors have begun to reduce their bets on a rate cut in March. A strong U.S. economy and comments from Federal Reserve officials are prompting some investors to reconsider their bets on how quickly the central bank will cut interest rates this year.
The shift is affecting U.S. Treasury and currency markets at a time when stocks are near record highs. Expectations that the Federal Reserve will ease monetary policy in 2024 after the most aggressive tightening cycle in decades fueled explosive gains in the stock and bond markets in the final months of last year, with the S&P 500 rising more than 24% in 2023.
Investors remain confident that the Fed is about to cut interest rates, but some have begun to question when the central bank will start lowering borrowing costs and how quickly it will do so.
Former St. Louis Fed President James Bullard said in an interview on Tuesday that the Fed may begin cutting interest rates before inflation reaches its 2% target, possibly as early as March. Bullard predicts that core inflation, which excludes food and energy prices, may slow to about 2% by the third quarter of 2024.
Bullard noted the challenges facing the Fed and stressed the importance of not delaying policy adjustments. He said: "They don't want to enter the second half of 2024 when the inflation rate has reached 2% but still have not adjusted their policies. By then it will be too late."
Bullard also said that if inflation is between 2% and 2.5% but the Fed has not yet adjusted interest rates, then they may have to act aggressively, such as cutting interest rates by 50 basis points in one meeting, and that will be difficult.
In terms of overseas central banks, after the Bank of Japan held a meeting on Tuesday, the swap market increased its bets on a 25 basis point interest rate hike in April.
The Bank of Canada kept its policy rate unchanged for the fourth consecutive time and made it clear for the first time that it would not need to raise interest rates if the economy develops in line with its expectations. Policymakers including Governor Tiff Macklem kept the benchmark overnight interest rate unchanged at 5% on Wednesday, in line with the consensus expectations of the market and economists surveyed by Bloomberg. Officials said data showing economic growth has stalled and will remain slow in the short term will help inflation return to the bank's 2% target next year.
The dovish message suggests the bank sees the economy slowing rapidly and believes its past rate hikes - 475 basis points in less than two years - are enough to tame inflation. This could open the door to rate cuts in the coming months.
Former US President Donald Trump won the New Hampshire primary, solidifying his status as the Republican nominee. According to Goldman Sachs, a Trump presidency would raise trade barriers. Deutsche Bank strategists wrote that Germany's industrial, chemical and automotive companies are the most vulnerable in this scenario.
U.S. President Joe Biden said he expects to face former President Trump again in the election. Biden said in a statement Tuesday night that it was now clear that Trump would be the Republican nominee.
Focus stocks
Tesla will report earnings after the market close on Wednesday.
It is reported that Tesla has notified suppliers that it hopes to start production of a new mass-market electric car code-named "Redwood" in mid-2025, which is positioned as a "compact crossover." In response to this, a relevant person from Tesla China responded to a reporter from e Company: "I have never heard of it."
Netflix's fiscal fourth quarter revenue was US$8.83 billion, analysts expected US$8.71 billion; earnings were US$2.11, analysts expected US$2.19; operating profit was 1.496 billion, a significant increase of 172% year-on-year; streaming media paid users had a net increase of 13.12 million, which was its largest fourth-quarter subscriber growth in history, far exceeding analysts' expected growth of 8.91 million, bringing the total number of subscribers to 260 million.
According to reports, Amazon plans to launch a paid upgraded version of its Alexa smart voice assistant within this year, but the paid version currently faces poor AI performance in testing. This new version is currently tentatively named AlexaPlus, and 15,000 external customers have participated in testing its underlying voice technology RemarkableAlexa.
Apple plans to start allowing new fees and restrictions when downloading third-party software outside its App Store in response to a new European law. The company's plan is only available in Europe.
Spotify said it would update its app in Europe to allow iPhone users to subscribe and purchase audiobooks within the app. In most regions, Apple's AppStore rules prohibit companies such as Spotify from charging users directly within the app.
Google and Singular Computing reached a settlement in a US patent infringement lawsuit, which required Google to compensate US$1.67 billion.
It is also reported that Google was fined more than 200 billion won by the Korean Fair Trade Commission for monopolistic behavior. Google appealed, but South Korea's High Court rejected Google's appeal on Wednesday and upheld the original verdict.
This fine stems from a ruling against Google by the Korean Fair Trade Commission in September 2021. The commission ruled that Google abused its market position by forcing smartphone manufacturers such as Samsung Electronics to install its Android operating system, so it issued a correction order and fined it.
E-commerce retailer eBay announced on Tuesday local time that it would lay off 1,000 employees, accounting for approximately 9% of its current workforce. "While we have made progress on our strategy, our overall headcount and accompanying expenses have outpaced the growth of our business," eBay CEO Jamie Iannone wrote in a letter to employees.
New Oriental's net revenue in the second fiscal quarter was US$869.6 million, a year-on-year increase of 36.3%, and the market forecast was US$811.9 million; net profit was US$30.066 million, a year-on-year increase of 4007.4%; adjusted net profit was 5015. US$80,000, a year-on-year increase of 182.6%; adjusted earnings per ADS are US$0.29, compared with US$0.1 in the same period last year; net revenue in the third fiscal quarter is expected to be US$1.07 billion to US$1.09 billion, a year-on-year increase of 42% to 45%.