Investor enthusiasm for artificial intelligence helped lift Wall Street Thursday as Microsoft surfed a tech wave to pass $4 trillion in market value even as traders weighed Federal Reserve rates caution.
US tariffs and a Fed decision Wednesday to hold rates steady as inflation stays stubbornly high in the United States could not dampen down the bulls piling into tech.
Shares of Microsoft vaulted around five percent after it reported $27.2 billion in quarterly profits as it touted massive investments in AI, joining fellow AI star Nvidia in leaping the $4 trillion value barrier.
About 25 minutes into trading, the tech-rich Nasdaq Composite Index was up 1.3 percent at 21,396.04 while the S&P 500 and the Dow touted more modest gains with both the S&P 500 and Nasdaq above their all-time closing highs.
Europe was unable to match its US peers — London barely in the green and eurozone indices Paris and Frankfurt slightly off two hours from the close.
Ahead of US jobs data Friday, focus was on company earnings, with Microsoft and Facebook owner Meta posting better-than-expected earnings, the latter seeing its shares soar 12 percent.
With US rates on pause for now, “often, that might have been enough to send traders scurrying for cover — but strong earnings results from some of the leading US tech companies have kept sentiment strong, allowing markets to make new gains this morning,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.
The latest developments on the tariffs front saw US President Donald Trump announce a deal that sees 15 percent levies on South Korean goods and a commitment from Seoul to invest $350 billion in the United States.
The president Thursday said his sweeping tariffs were making the US “great & rich again”.
Earlier, he revealed India would face 25-percent tolls, coupled with an unspecified penalty over New Delhi's purchases of Russian weapons and energy.
Trump has also signed an executive order implementing an additional tax on Brazilian products, as he lambasts what he calls Brazil's “witch hunt” against his far-right ally, former president Jair Bolsonaro, on coup charges.
Traders are keeping tabs on talks with other countries that are yet to sign deals with Washington ahead of Trump's self-imposed Friday deadline.
After a broadly negative session Wednesday on Wall Street, Asian markets struggled.
Hong Kong, Shanghai, Sydney, Singapore, Seoul, Manila, Wellington and Jakarta closed lower, while Tokyo, Taipei, Mumbai and Bangkok climbed.
