The S&P 500 climbed to its fourth straight record high close on Wednesday, as Netflix surged following blowout quarterly results and a strong report from semiconductor company ASML fueled gains in chipmakers. Canada’s main stock index edged lower, as a drop in gold prices weighed on mining shares, with the index retreating after it touched its highest intraday level in 20 months.
Riding optimism about Wall Street’s most valuable companies, Microsoft hit an all-time high, lifting its market value above US$3 trillion for the first time.
The Nasdaq touched its highest since January 2022 and is now less than 4% below its record high close in November 2021.
Netflix jumped 10.7% to a two-year high after strong subscriber growth cemented investor confidence the firm has won the streaming wars with its password-sharing crackdown and a strong content slate.
The S&P 500 communication services index, which includes Netflix, rose 1.2% and also hit a two-year high.
Alphabet and Meta Platforms, part of the so-called Magnificent Seven group of heavyweights that drove much of 2023′s recovery in the S&P 500, each gained over 1%.
“Technology-enabled companies - the Magnificent Seven in particular and the AI theme - last year put up some ridiculous earnings and guidance. We will see over the next 10 days how that plays out, but early indications are certainly pretty positive,” said Mike Dickson, head of research at Horizon Investments.
In the post market, Tesla shares were down more than 2% after the car maker reported its latest quarter, missing fourth quarter revenue estimates and warning of lower volume growth this year.
The S&P 500 climbed 0.08% to end the session at 4,868.55 points.
Even as the S&P 500 rose, declining stocks outnumbered rising ones within the index by a 2.5-to-one ratio.
The Nasdaq gained 0.36% to 15,481.92 points, while Dow Jones Industrial Average declined 0.26% to 37,806.39 points.
The S&P/TSX composite index fell 8.81 points to 21,025.78. Earlier in the session, it touched its highest level since May 2022.
The materials group lost 1.1% as data showing strong U.S. business activity sparked gains in the U.S. dollar, weighing on the price of gold, with the precious metal falling 0.8%.
The industrial and consumer discretionary sectors both fell 0.5% but both energy and financials ended higher.
Financials added 0.4%, while energy rally 1.6% as the price of oil settled nearly 1% higher at US$75.09 a barrel, helped by a bigger-than-expected U.S. crude storage withdrawal.
Tech firm Blackberry tumbled 17.9% to hit a near four-year low after it announced a private offering of US$160 million in five-year convertible bonds on Tuesday.
The Bank of Canada held its benchmark interest rate at a 22-year high of 5%, saying that while underlying inflation was still a concern, the bank’s focus is shifting to when to cut borrowing costs rather than whether to hike again.
The rate decision was widely expected, and while the language could be interpreted as mildly dovish, money markets actually lowered the odds of a near-term rate cut by the Bank of Canada.
Implied interest rate probabilities in the swaps market now suggest only about a 6% chance of a quarter-point rate cut at the bank’s next meeting in March, down from 28% prior to Wednesday’s decision. For April, money markets are now pricing in a 45% chance of the first rate cut, down from 55%.
Money markets now assign a 77 per cent chance of that first move happening in June, down slightly from 80 per cent prior to the BoC announcement.
A resilient U.S. economy and uncertainty over the timing of interest rate cuts have led investors to also reassess their bets on how quickly the Federal Reserve will cut rates this year.
Traders now see an 85.5% chance of a Fed rate cut in May, according to CME Group’s FedWatch Tool. Traders previously expected a rate cut in as early as March.
Volume on U.S. exchanges was relatively heavy, with 11.6 billion shares traded, compared to an average of 11.4 billion shares over the previous 20 sessions.
The Philadelphia SE semiconductor index rose 1.54% to a record high after upbeat results from manufacturing equipment maker ASML Holding pointed to a recovery in global chip demand.
Nvidia and Broadcom both jumped more than 2% and hit record highs. Traders exchanged over $34 billion worth of Nvidia shares, more than any other stock on Wall Street, according to LSEG data.
AT&T dropped 3% after forecasting annual profit below expectations, while DuPont De Nemours slumped 14% after forecasting a fourth-quarter loss.
Reuters, with reports from Darcy Keith of the Globe and Mail