Wall Street's indexes rose Wednesday, with the benchmark S&P 500 hitting a record high during the session, as investors cheered streaming video provider Netflix's quarterly report and technology shares rallied a day after President Donald Trump announced a private-sector artificial intelligence infrastructure plan.
The technology sector was the biggest gainer among the S&P 500's 11 major industry indexes with hefty boosts from AI chip leader Nvidia and Microsoft.
Investors piled bets into the promise of AI the day after Trump announced a
$500 billion private-sector AI infrastructure investment plan from a venture involving Oracle, OpenAI and SoftBank, even though there was no clarity on funding.
Netflix rallied sharply after the company reported a record number of subscribers for the holiday quarter, enabling it to increase prices for most service plans.
"This is just the excitement about the technology investments," said Irene Tunkel, Chief U.S. Equity Strategist at BCA Research, noting the market's narrow breadth on Wednesday. "Everything else just cannot compete with it."
Shares in Oracle rallied along with server makers Dell and U.S. traded shares of ARM Holdings, a chip technology supplier that is roughly 90% owned by SoftBank.
"It's a story of big tech and everything else is hanging in there," said Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management, who attributed much of Wednesday's rally, particularly in chip stocks, to the AI announcement.
"The direct beneficiary, at least the beginning would be the semiconductor space," he said pointing to outperformance in the Philadelphia semiconductor index.
But without funding clarity, Stucky described the news as "more of a pie in the sky kind of investment story."
According to preliminary data, the S&P 500 gained 36.57 points, or 0.60%, to end at 6,085.81 points, while the Nasdaq Composite gained 251.89 points, or 1.27%, to 20,008.67. The Dow Jones Industrial Average rose 120.97 points, or 0.27%, to 44,146.78.
Risk appetites have been boosted recently with data pointing to a strong economy and cooling inflation and Trump's more moderate than feared approach to tariffs since his Monday inauguration.
Sill investors are watching for the president's trade plans due to inflation concerns after he warned that tariffs on imports from China, Mexico, Canada and the European Union could be issued on Feb. 1.
The president has ordered federal agencies to complete comprehensive reviews of a range of trade issues by April 1 - the date that analysts at Barclays say markets should focus on.
In individual stocks, Procter & Gamble advanced after beating second-quarter estimates, driven by growing demand for its household items in the United States.
Johnson & Johnson shares fell although the drugmaker reported fourth-quarter results above estimates.
After rising on Tuesday, Ford lost ground as Barclays downgraded the stock. Textron shares fell after it forecast 2025 profit below estimates.
Halliburton slipped after warning of softer North America activity this year and posting downbeat quarterly revenue.
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