US Stocks Hit Record Highs Driven by Tech and AI Speculation

Market Performance and AI Influence

• 📈 The S&P 500 reached a record high despite only 108 names being in the green, indicating a strong performance from key sectors.
• 💡 Artificial intelligence speculation is driving rallies in large technology companies, powering the current bull market.
• ⚠️ A disconnect exists between surging asset prices and weakness in the labor market, a challenge the Fed must address.

Key Company Performances and Earnings

• 🚀 Nvidia dominated headlines, with CEO Jensen Huang dismissing AI bubble concerns and stating the government has not offered to take a stake in the company.
• 💻 Microsoft finalized a new pact with OpenAI, securing a 27% ownership stake valued at approximately $135 billion.
• 💰 Booking Holdings reported strong third-quarter results, beating estimates for adjusted EBITDA and gross bookings.
• 💳 PayPal surged nearly 13% on raising full-year earnings guidance and announcing a partnership with OpenAI to embed its digital wallet into ChatGPT.
• инвестиции Nokia ADRs soared about 22% following news of Nvidia's planned $1 billion equity investment.
• 📦 UPS exceeded profit expectations, driven by significant cost-cutting measures including 34,000 job cuts, aiming for $3.5 billion in savings.
• 🏠 Wayfair saw a 23% jump, its best day since January 2023, with the CEO expressing optimism.

Market Declines and Sector Weakness

• ✈️ JetBlue shares fell nearly 12% due to challenges with holiday travel, rising fuel prices, and the government shutdown, with investors growing impatient with cost-cutting targets.
• 🎮 DraftKings and Flutter Entertainment declined amid reports of Poly Market preparing to enter the US sports betting market and Trump Media's plan for prediction contracts.
• 👕 VF Corp, owner of The North Face and Vans, dropped 12.2% after issuing third-quarter operating guidance that missed expectations.

Economic and Federal Reserve Outlook

• 📊 The yield on 10-year Treasuries remained little changed at 3.97%, and the dollar fell.
• 🏦 The Federal Reserve meeting began today, with focus on potential rate cuts later in the year and into 2026, despite the ongoing government shutdown.
• 📉 N-phase, a solar company, experienced weakness after its fourth-quarter revenue guidance fell below street estimates, despite beating third-quarter EPS and revenue.
• 💳 Visa reported slight beats on fourth-quarter adjusted EPS and net revenue, but the stock showed little directional movement in after-hours trading.