Market Overview

The stock market experienced some selling pressure today, although the index-level performance did not reflect this. The S&P 500 increased by 0.6%, reaching a new all-time high of 6,100.81. This rise was driven by mega caps and chipmakers. The Vanguard Mega Cap Growth ETF (MGK) closed 1.7% higher, while the PHLX Semiconductor Index (SOX) also gained 1.7%, fueled by excitement surrounding AI initiatives. This enthusiasm followed President Trump's announcement of a $500 billion AI infrastructure plan, which included notable industry leaders such as Oracle's (ORCL) Chairman Larry Ellison, SoftBank CEO Masayoshi Son, and OpenAI CEO Sam Altman, boosting sentiment in the tech sector.

Market Internals

Despite the gains in major indices, market internals told a different story. On both the NYSE and Nasdaq, decliners outnumbered advancers. The equal-weighted S&P 500 closed 0.4% lower. Additionally, the Russell 2000 and S&P Mid Cap 400 both ended the day in negative territory, down 0.6% and 0.4% respectively. This more subdued performance comes after a period of notable outperformance earlier in the year. Despite today's downturn, the Russell 2000 and S&P Mid Cap 400 are still up 3.3% and 5.1% respectively in 2025.

Sector Performance

Sectors not directly benefiting from the AI hype showed some consolidation today, except for a few companies that reported earnings. Netflix (NFLX, Financial) was a standout performer, surging 9.7% after reporting the largest quarter of global streaming paid net additions in its history. Blue-chip companies, including Procter & Gamble (PG) and Travelers (TRV), also stood out by reporting strong earnings, which bolstered investor confidence.

Bond Market

In the bond market, the 10-year yield increased by three basis points to 4.60%, and the 2-year yield rose by two basis points to 4.30%. Treasuries moved to session lows following the $13 billion 20-year bond reopening, which attracted strong demand.

Year-to-Date Performance

• S&P Midcap 400: +5.1% YTD
• Dow Jones Industrial Average: +3.8% YTD
• Nasdaq Composite: +3.6% YTD
• S&P 500: +3.5% YTD
• Russell 2000: +3.3% YTD

Economic Data Review

Today's economic data included:

• Weekly MBA Mortgage Applications Index: 0.1% (Prior: 33.3%)
• December Leading Indicators: -0.1% (Consensus: 0.0%, Prior revised to 0.4% from 0.3%)

Upcoming Economic Data

Thursday's economic data will feature:

• 8:30 ET: Weekly Initial Claims (Consensus: 219,000; Prior: 217,000) and Continuing Claims (Prior: 1.859 million)
• 10:30 ET: Weekly natural gas inventories (Prior: -258 bcf)
• 12:00 ET: Weekly crude oil inventories (Prior: -1.96 million)

Overseas Markets

• Europe: DAX +1.0%, FTSE 0.0%, CAC +0.9%
• Asia: Nikkei +1.6%, Hang Seng 0.0%, Shanghai -0.9%

Commodities

• Crude Oil: -0.52 @ 75.47
• Natural Gas: +0.16 @ 3.51
• Gold: +11.20 @ 2770.60
• Silver: -0.06 @ 31.43
• Copper: -0.04 @ 4.30

MGK,SOX,ORCL,NFLX,PG,TRV

Today's News

Netflix (NFLX, Financial) saw its stock jump to a record high, closing up 9.7% after the company reported a significant increase in subscribers, driven by its new focus on live sports events. This surge helped lift tech stocks overall, contributing to a positive day on Wall Street.

CRISPR Therapeutics (CRSP, Financial) experienced a notable share price increase of 10% following the disclosure of investments by Robert F. Kennedy Jr., President Trump's nominee for HHS Secretary. Kennedy's holdings in CRISPR and other tech stocks like Apple (AAPL, Financial) and Amazon (AMZN, Financial) were revealed, with plans to divest within 90 days of confirmation.

Amid enthusiasm for President Trump's AI initiative, Project Stargate, tech executives voiced concerns about its execution. Google (GOOGL, Financial) announced a $1 billion investment in Anthropic, a competitor to OpenAI. Meanwhile, Nvidia (NVDA, Financial) and Arm Holdings (ARM, Financial) were named key partners, boosting their stock prices as the AI infrastructure plan gains momentum.

Santee Cooper's announcement to seek proposals for restarting nuclear reactor construction at the V.C. Summer Nuclear Station lifted nuclear-related stocks. This move aligns with tech companies' need for clean energy to support AI data centers, potentially involving firms like Amazon (AMZN, Financial) and Microsoft.

Amazon (AMZN, Financial) announced the closure of seven facilities in Quebec, resulting in job cuts. The decision, attributed to operational reviews and a shift back to third-party delivery models, affects its only unionized workforce in Canada, though Amazon denies the closures are related to unionization.

Financial sector stocks showed volatility as major banks like Citigroup (C, Financial) and JPMorgan Chase (JPM, Financial) continued to gain from positive earnings reports and expectations of business-friendly regulations under the new Trump administration.

Kinder Morgan (KMI, Financial) reported a slight miss in Q4 earnings but provided a positive outlook for 2025, with expectations of increased net income and dividends. The company plans to maintain steady growth despite missing revenue expectations for the quarter.

Moderna (MRNA, Financial) gained attention as Oracle's chairman highlighted AI's potential in developing mRNA-based cancer vaccines. This aligns with the broader AI-driven initiatives announced under Project Stargate, indicating a significant investment wave in AI technology.

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