Driven by Trump Expectations and AI Boom, S&P 500 Hits 'All-Time High'

Tech Companies' 'High Performance' Drives US Stock Market

"Preference for 'Risk Assets' Expected to Stand Out in Bull Market"

The US stock market closed on an upward trend on the 22nd (local time), with the Standard & Poor's (S&P) 500 index hitting an all-time high. Major tech stocks like Oracle and NVIDIA showed strength, fueled by expectations for the Donald Trump administration and optimism in the artificial intelligence (AI) industry.

S&P 500 Hits All-Time High

According to CNBC on the 23rd, the S&P 500 index rose to 6,100.81 at one point during the session, setting a new all-time high, and closed at 6,086.37, up 0.61%. This marks a new high after a correction since the peak in December last year. The S&P 500 index rose 23% throughout 2023 but fell 2.5% in December due to disappointment over the pace of interest rate cuts by the US Federal Reserve (Fed).

The tech-heavy Nasdaq Composite index closed up 1.28% at 20,009.34, showing strong gains, while the Dow Jones Industrial Average ended up 0.3% at 44,156.73. Notably, the Dow was driven by a nearly 2% rise in Procter & Gamble's stock price.

The rise in the stock market was mainly driven by the strong performance of tech companies. Netflix's stock surged over 9% on news that its paid subscriber count surpassed 300 million and its fourth-quarter earnings exceeded market expectations. Netflix boosted its revenue with popular content like 'Squid Game' and the Jake Paul vs. Mike Tyson boxing match. Oracle and NVIDIA also rose more than 6% and 4%, respectively, reflecting expectations for expanded AI investment.

President Trump's policies also had a positive impact. On the 21st, Trump announced an AI infrastructure investment project called 'Stargate,' with participation from OpenAI, Oracle, and SoftBank, planning to invest at least $500 billion (about 719 trillion won) in AI infrastructure in the US.

Keith Lerner, co-chief investment officer at Truist, said, "A solid economy, easing inflation, stable interest rates, and Trump's tariff easing policies provided a positive backdrop for the stock market," adding, "AI and technology have become major themes in this bull market."

Preference for High-Risk Assets in Bull Market

As the S&P 500 index hit an all-time high, investors are turning to high-risk assets. In particular, products that can maximize short-term returns, such as leverage ETFs, are gaining attention.

According to market research firm CFRA, 2024 was a record year for ETF fund inflows. About 40% of new ETFs listed in the US this year used derivatives as their main investment strategy. This is double the 20% in 2014. Previously, passive index-based ETF products tracking the S&P 500 index dominated, but increasingly complex and diverse strategy products are being launched.

Todd Sohn, head of ETFs at Strategas, analyzed, "ETF demand is shifting from simple passive products to complex strategy products," adding, "ETF issuers are striving to provide investors with strategies that were previously difficult to access."

Hyein Lee hey@hankyung.com