[New York Stock Market] 'Trump Rally' on Optimism for AI Investment and Regulatory Easing... S&P Hits Intraday High

Trump's Massive AI Investment Fuels Optimism
S&P Hits Record High, Nasdaq Reclaims 20,000
Oracle Soars 6.75%, Nvidia Jumps 4.43%
Buying Momentum Boosted by Hopes for Corporate Tax Cuts and Deregulation

The three major indices of the U.S. New York stock market all rose on the 22nd (local time). The S&P 500 index hit an intraday record high, and the Nasdaq index recovered to the 20,000 level. Optimism spread in the stock market due to the previous day's announcement by U.S. President Donald Trump of an artificial intelligence (AI) infrastructure investment plan and expectations of deregulation, leading to a 'Trump rally.' Netflix's 'surprise earnings' also boosted buying momentum by raising expectations for upcoming big tech earnings reports.

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average (Dow) closed at 44,156.73, up 130.92 points (0.3%) from the previous trading day. The large-cap-focused S&P 500 index closed at 6,086.37, up 37.13 points (0.61%). It recorded an intraday all-time high and was close to the highest closing price ever. The tech-heavy Nasdaq index ended trading at 20,934, up 252.56 points (1.28%).

By stock, AI-related shares rose. Oracle, which is participating in the AI infrastructure investment plan announced by President Trump the previous day, surged 6.75%. AI leader Nvidia rose 4.43%. Netflix soared 9.69% after posting earnings that exceeded expectations the day before.

President Trump announced the 'Stargate' initiative at the White House the previous day, involving OpenAI, Oracle, and Japan's SoftBank, which are participating in a joint venture form. These three companies will initially invest $100 billion (about 144 trillion won) in AI infrastructure such as data centers in the U.S., and increase the investment to $500 billion (about 718 trillion won) within the next four years. President Trump will support power generation and other areas through emergency measures. The aim is to dominate AI supremacy through active deregulation amid U.S.-China AI competition. However, Elon Musk, Tesla CEO and a key figure known as Trump's 'first buddy,' poured cold water on the plan, saying "there is no money."

Case Runner, co-Chief Investment Officer (CIO) of Truist, analyzed, "AI tailwinds and the Stargate project emphasizing innovative potential are reaffirming leadership in tech stocks," adding, "Today once again confirmed that AI and technology are the dominant themes in this bull market."

Jin Boivin and Wei Li, strategists at BlackRock Investment Institute, forecasted, "We expect earnings to support stocks despite taking risks," and "Even if interest rates rise further, stock prices will continue to rise as long as fundamentals remain strong."

The market is focusing on President Trump's market-friendly policy implementation, including deregulation and corporate tax cuts. Additionally, the fact that President Trump did not impose new tariffs on 'Day One' of his administration provided relief.

CIO Runner analyzed, "A resilient economy, easing inflation, stabilized interest rates, a strong start to earnings season, and reduced focus on tariffs on President Trump's first day provided a solid backdrop for the market."

However, concerns remain about tariff uncertainties as President Trump hinted at imposing 25% tariffs on Mexico and Canada and 10% on China starting next month.

Meanwhile, Jamie Dimon, chairman of JP Morgan and known as the 'Wall Street Emperor,' expressed the view that the U.S. stock market is overvalued. In an interview with CNBC at the World Economic Forum (WEF, Davos Forum) held in Davos, Switzerland, he said, "Asset prices are somewhat inflated," adding, "To justify these prices, quite good results are needed. We all hope for that."

U.S. Treasury yields rose slightly. The yield on the 10-year U.S. Treasury, a global bond yield benchmark, moved at 4.6%, up 3 basis points (bp) from the previous trading day (1 bp = 0.01 percentage point), and the 2-year U.S. Treasury yield, sensitive to monetary policy, rose 1 bp to 4.3%.

The dollar index, which measures the value of the U.S. dollar against six major currencies, recorded 108.05, up 0.18% from the previous day.

International oil prices closed slightly lower. West Texas Intermediate (WTI) crude oil fell $0.39 (0.5%) to $75.44 per barrel, and Brent crude, the global oil price benchmark, closed at $79 per barrel, down $0.29 (0.4%) from the previous day. Investors assessed the impact of President Trump's tariff policies and the declaration of a national energy emergency.