The S&P 500 rallied to a new record high on Thursday. President Donald Trump called for lower interest rates and cheaper oil prices. The benchmark index added 0.53% and finished the day at 6,118.71.
Despite high-profile casualties of DeepSeek, like Broadcom and Nvidia (-11% and -4% YTD, respectively), most stocks have been doing well YTD: 375, corresponding to ~75%, of S&P 500 constituents are up this year, with >53% beating index
@SPDJIndices pic.twitter.com/rv7WXnDVNk— Liz Ann Sonders (@LizAnnSonders) January 29, 2025
This surpassed its previous all-time closing high of 6,090.27 from early December. The Dow Jones Industrial Average advanced 408.34 points, or 0.92%, to 44,565.07. The Nasdaq Composite rose 0.22% to 20,053.68.
Consumers’ expectations for the stock market to do well in next year eased a touch in January per Conference Board … still elevated relative to history, though pic.twitter.com/Z4n8phsllW
— Liz Ann Sonders (@LizAnnSonders) January 29, 2025
It marked the fourth straight winning session for all three major indexes. Stocks got a boost after Trump insisted that interest rates should drop immediately. He made these comments in a virtual address to the World Economic Forum.
#USMarketAtOpen | S&P 500, Nasdaq 100 open flat and other significant updates! #Danaher #TMobile #TrumpMedia @Nasdaq pic.twitter.com/dl15rcpsrz
— ET NOW (@ETNOWlive) January 29, 2025
The president also said he would ask Saudi Arabia to lower oil prices. This contributed to optimism in the market. Short-term Treasury yields fell following Trump’s remarks.
“He really can’t control interest rates, but the market likes to hear that kind of stuff,” said Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report. “So far, the market does seem to like what Trump’s policies are going to be, so we’ll just have to see if there’s some follow through.”
The stock market has been lifted this week by excitement over potential tax cuts and deregulation under Trump. Signs of resilient economic growth have also helped.
Tariffs remain a concern, but investors have been pleased with developments on these levies during Trump’s first days back in office. The fourth-quarter earnings season is off to a strong start as well. Major companies and big banks are offering positive reports.
However, some stocks faced setbacks.
Optimism lifts major stock indexes
Alcoa’s shares fell about 4% after its CEO stated that U.S. tariffs on Canadian imports would increase aluminum costs by $1.5 billion to $2 billion a year.
The airline sector also faced challenges, with Alaska Air Group shares dropping 8%. Despite a strong run for the artificial intelligence sector, William Blair analysts say AI valuations are not indicative of a bubble. They note that the median forward price-to-earnings multiple of 32x is up only 23% over the recent period.
This reflects tangible growth in earnings power rather than speculative excess. Oracle shares are up nearly 15% this week. The gain came after President Trump announced a collaboration with the company, Softbank, and OpenAI to invest in artificial intelligence.
It marks the stock’s best week since December 2021. The energy sector lagged despite overall market gains. The S&P 500 energy sector is down 2% this week.
It is on pace for its worst weekly performance since mid-December. Bullishness among individual investors over the six-month outlook for stocks rebounded to 43.4% in the latest American Association of Individual Investors survey. The percentage of bearish investors fell to 29.4%, indicating increased optimism.
In midday trading updates, Electronic Arts tumbled nearly 17%. It is on pace for its worst percentage drop since October 2008. The video game publisher lowered its net bookings guidance for the quarter.
It has been a dynamic day for the stock market. Policy comments, earnings reports, and sector performance variances drove the action. Investors remain optimistic despite some underlying challenges.
The major indexes closing in the green is evidence of this.
