Tech Takes Center Stage as Trump Shifts Focus
The US market is buzzing with excitement as President Donald Trump turns his attention to technology and artificial intelligence. This week, Trump announced a massive private sector investment of up to $500 billion to fund AI infrastructure, aiming to surpass rival nations in this critical technology. The move has sent shockwaves through the industry, with SoftBank and Oracle shares soaring over 10% and 9%, respectively.
AI-Powered Growth
The newly formed joint venture, Stargate, will build data centers and create over 100,000 jobs in the US. This development has injected new life into the tech sector, which was previously underperforming. Streaming giant Netflix saw its shares surge 14% in premarket trading after reporting a record 18.9 million new subscribers and plans for price hikes.
Market Momentum
The Nasdaq has been lagging behind the S&P 500 this year, but the renewed focus on tech has given it a much-needed boost. Apple, which had been under pressure, has been overtaken by AI-chip leader Nvidia as the most valuable company in the US. With big industrial names set to report earnings on Wednesday, stock futures are looking strong.
Tariff Threats Linger
Despite the excitement around AI, Trump’s tariff threats still loom large. The President has vowed to impose tariffs on the European Union and is considering a 10% punitive duty on Chinese imports. However, currency markets have taken a wait-and-see approach, assuming that any moves will happen only after the countries in question respond to Trump’s concerns.
Global Markets React
European shares have brushed off Trump’s trade threats, with the STOXX600 index hitting a record high. Adidas helped Germany’s DAX reach a new record, while Chinese stocks fell back about 1% on concerns over being back in the tariff firing line.
Fixed Income Markets Calm
The jittery start to the new year has given way to calm in fixed income markets. Lower oil prices and the lack of immediate tariff hikes have helped Treasury yields return to levels seen at the turn of the year.
Key Developments Ahead
Investors will be keeping a close eye on several key developments later on Tuesday, including Canada’s December producer price inflation, US corporate earnings, and the World Economic Forum in Davos.
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