On Thursday, the U.S. stock market's S&P 500 Index reached another record high, with Wall Street's three major indices rising for the fourth consecutive trading day. All 11 sectors of the S&P 500 ended higher, led by the healthcare sector, which rose about 1.35%, closely followed by the industrial sector with a 0.96% gain. Investors are actively weighing corporate earnings data against policy remarks from U.S. President Trump at the World Economic Forum in Davos, Switzerland.
At Davos, Trump urged the Organization of the Petroleum Exporting Countries (OPEC) to lower oil prices, while also calling on central banks to cut interest rates. He also warned global business leaders that companies choosing to manufacture outside the U.S. would face tariffs. These statements elicited complex market reactions.
Lindsey Bell, Chief Strategist at 248 Ventures, said, "While investors remain cautious about Trump's tariff policies, they are optimistic about the prospects of rate cuts and falling oil prices. Overall, the more the market understands Trump's policies, the more confidence it boosts. Today's stock market performance is a reflection of that optimism."
However, some investors remain concerned that tariffs could increase inflationary pressures and limit the Federal Reserve's scope for further rate cuts. Peter Tuz, President of Chase Investment Counsel, believes the Fed's decisions are more data-driven than based on the President's direct requests. He pointed out, "The Fed will adjust its policies based on economic data rather than political pressure."
On the economic data front, a report from the U.S. Department of Labor showed that the number of initial unemployment benefit claims was 223,000 last week, higher than the market expectation of 220,000. This data indicates that the U.S. job market remains robust, albeit slightly weak.
Corporate earnings results are also a key market driver. General Electric Aerospace's stock rose 6.6% as the company forecasted profits beyond market expectations by 2025; Elevance's stock rose 2.7% due to its better-than-expected fourth-quarter profit performance.
Analysts note that the rise in the stock market on Thursday not only reflects positive corporate earnings but also shows the market's attention to and reaction to the Trump administration's policy direction. Despite uncertainties surrounding tariffs and inflation, overall market sentiment remains optimistic.
As the Federal Reserve holds its first policy meeting of 2025 next week, the market will closely watch the interest rate decision and subsequent policy guidance. Investors widely expect the Fed to maintain interest rates at this meeting. The historic high of the S&P 500 Index indicates that despite multiple variables, the market remains confident in the economic outlook.
