US stocks rally on shining earnings

Earlier in the session, the Nasdaq Composite had surged more than 1%; but, by the afternoon, gains had tapered off to roughly 0.5%. Not only did Netflix lead the way in strong profits, but other major tech companies like Microsoft and Meta also had increases in their stock prices.

While the Dow Jones Industrial Average (DJI) closed flat, the S&P 500 (GSPC) gained almost 0.3%, building on the new closing high achieved on Tuesday. The S&P is headed for its fourth straight closing record, which it is expected to achieve.

In the meantime, huge announcements from software provider SAP and chip gear manufacturer ASML raised hopes for a resurgence of the chip sector and an AI-driven tech boom.

Deliveries are the main focus of Wednesday’s flurry of corporate updates from Tesla, the electric vehicle manufacturer facing a competitive market and competitors in China. IBM, a mainstay of technology, is also scheduled.

While earnings take centre stage, there is ongoing discussion about when the Federal Reserve may lower interest rates.

With data driving expectations, updates on US manufacturing and services activity came in strong with economic output at its highest levels in seven months — just ahead of Thursday’s first reading of Q4 GDP and Friday’s release of the Fed-favored PCE inflation figures.

The most trending shares on Tuesday include On Wednesday, Nvidia’s stock that surged 4% as the AI-driven surge persisted. ASML announced that orders tripled during the quarter, and KeyBanc increased their price target to $740. Netflix’s stock rose 14% after the company revealed a spike in new subscribers, exceeding even its own projections.

As for AMD stock, the company’s shares surged by over 5%. Similar to Nvidia, AMD has benefited from the AI revolution. Microsoft became the second business after Apple to momentarily achieve a $3 trillion market capitalization through its shares.

AI excitement and cloud division developments have driven the tech giant’s shares. The report was generally well received by Wall Street analysts, while some thought the stock price might be too high.