The S&P 500 reached a new record high on Thursday, boosted by strong corporate earnings and easing inflation concerns.
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
The index rose 0.5 percent, building on gains from the past week and bringing its year-to-date increase to 4 percent. President Donald Trump’s remarks at the World Economic Forum in Davos, Switzerland also helped lift stocks.
Trump reiterated his commitment to bring down oil prices, a major component of inflation. West Texas Intermediate crude oil fell over 1 percent to $74.62 per barrel following his comments.
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
The recent rally comes after weeks of market stagnation, as investors worried about the inflationary impact of Trump’s promised policies, particularly new tariffs and a mass deportation program.
These measures could push up consumer prices and wages.
#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
Wall Street had been concerned that resulting inflation would prompt the Federal Reserve to keep interest rates higher than previously expected in order to control consumer price gains.
S&P 500 boosted by strong earnings
Higher interest rates increase borrowing costs for consumers and companies, typically weighing on stock valuations. However, the release of new inflation data in recent weeks has eased those concerns. The two-year Treasury yield, which is sensitive to changes in interest rate expectations based on the inflation outlook, edged lower on Thursday.
Strong corporate earnings have also supported the market’s climb to record territory. The fourth-quarter reporting season is off to a positive start, with major corporations and big banks delivering encouraging results. While tariffs remain a concern, investors have been pleased with the administration’s approach during Trump’s first days back in the White House.
The president’s policies are expected to include potential tax cuts and deregulation, alongside signs of resilient economic growth. The Dow Jones Industrial Average and Nasdaq Composite also posted gains on Thursday. The Dow advanced 408.34 points, or 0.92 percent, to 44,565.07, while the Nasdaq rose 0.22 percent to 20,053.68.