The index gained only 0.30% on Wednesday. Among the tech names, Netflix jumped around 10% on the back of strong earnings and traded at $999 a share – just short of the $1000 psychological mark. It’s probably a matter of time before Netflix claims the $1000 level provided that the company’s recent gains were driven by the strategic move to stream live events and has potential to fuel organic growth. Other than that, Nvidia, Oracle and OpenAI investor Microsoft – the names of the companies that are cited in the so-called Stargate project – gained. Nvidia extended gains by almost 4.5%, Microsoft gained more than 4% while Oracle jumped up to 10% but gave back a part of these gains to end the day with an almost 7% gain.

But Trump’s Best Buddy Elon Musk, probably irritated by the growing closeness between Donald Trump and OpenAI’s Sam Altman – his nemesis - wrote an X post saying that these companies don’t have the money to invest in Trump’s AI project. The post sparked concerns about Musk’s relationship with the White House, leading Tesla shares to drop 2%. The saga serves as a reminder that the next four years will be a constant watch of who’s aligned with whom, who’s feuding, who’s making waves, and who holds the power to steer things in their favor. I, for one, can’t wait."

Elsewhere, there was good from P&G’s latest quarterly report. The company revealed that its organic sales exceeded expectations. But what attracted investors’ attention is that the company’s Q4 sales growth came from higher volumes and not from price hikes, as the company didn’t raise the price of its products for the first time since 2019 according to Bloomberg. The latter gives an encouraging insight regarding the US inflation dynamics. Unfortunately, that doesn’t erase the risk of rising inflationary pressures on Donald Trump’s pro-growth policies, his tax cut and mass deportation plans and the tariffs – which are all potential inflation-boosters. Indeed, ‘US Republicans are in talks over raising the cap for state and local tax deductions’. And tax deductions are obviously bad for public finances. As such, the US 10-year yield is back to 4.60% after a decline to 4.53% earlier this week, while the US futures are slightly negative at the time of writing.

In Europe, the Stoxx 600 advanced to a fresh record high yesterday, on hope that the tariffs that the US would impose on Europe would be softer than the threats. So far, the Stoxx 600 gained around 4%, and outperformed the S&P500 – which posted around 3.60% since the beginning of the year. This is all very much in line with the expectation of convergence between the stocks of two continents due to the big valuation gap and on the expectation that the ECB will be more supportive of the economies than the Fed in the coming months.

In China, market sentiment is mixed. The relief over Donald Trump not announcing new tariffs on China during his inauguration didn’t last long. He said yesterday that he would impose 10% tariff on Chinese imports. Consequently, the Chinese equities were down yesterday and they are having hard time recovering on Chinese government’s freshly announced measures to boost sentiment. These measures include an increase to the amount of stocks that pension funds and insurers could buy, and encourages the listed firms to increase their share repurchases. Alas, the CSI 300 has erased most of its gains since this morning, and the shooting star pattern of today hints that sentiment remains bearish for Chinese equities.

In the FX, the US dollar rebounded yesterday on the back of higher US growth and potentially higher US inflation expectations. The EURUSD bounced lower after testing the 50-DMA. The European Central Bank (ECB) doves remain in charge of the market and cap the upside potential of the euro against the greenback. Across the Channel, Cable is also under pressure this morning as Rachel Reeves is being seriously challenged on her Budget in Davos. She said that she said that she was ‘absolutely relaxed’ about wealth creation. How lucky! The truth is investors are not as relaxed and they are losing confidence in Reeves’ growth-boosting plans. The sterling outlook remains negative, also backed by the expectation of two – and maybe more – rate cuts for this year.

Finally, crude oil is down for the sixth straight day on the back of Trump policy plans and a surprise 1 mio barrel build in US inventories last week. US crude is preparing to test a major support area, $75.20/75.40 range, that includes the 200-DMA and the major 38.2% Fibonacci retracement on the December to January rebound. A move below this zone will suggest a medium-term bearish reversal and hint at the possibility of deeper price pullback toward the $73.80 mark, the 50% retracement level.