U.S. Stocks Close Higher Again; Nasdaq Rises 1.3 P.c.

U.S. stocks closed on a firm note on Wednesday as investors reacted positively to some upbeat earnings updates and corporate news, and on continued optimism about a few interest rate cuts by the Federal Reserve this year.

Worries about tariff threats lingered but investors largely shrugged off concerns and kept picking up stocks.

The major averages all closed on a strong note, with the tech-laden Nasdaq recording a more pronounced gain thanks to buoyant earnings and sales guidance by Netflix, and Trump’s AI initiative.

The Dow closed up 130.92 points or 0.3 percent, at 44,156.73. The S&P 500 gained 37.13 points or 0.61 percent, settling at 6,086.37, while the Nasdaq climbed 252.56 points or 1.28 percent, to 20,009.34.

Trump’s announcement of a $500 billion private-sector AI infrastructure investment plan from a venture involving Oracle, Open AI and Softbank set the stage for tech stocks’s strong performance.

Oracle Corp shares surged nearly 7 percent, NVIDIA climbed about 4.2 percent, Microsoft gained nearly 4 percent and Meta Platforms closed up by about 2.7 percent.

Netflix soared nearly 10 percent, after the company reported an addition of 19 million subscribers in the fourth quarter, the biggest ever subscriber gains in any quarter. Netflix’s bottom line came in at $1.869 billion, or $4.27 per share in the fourth quarter, compared with $938 million, or $2.11 per share, last year.

Among other prominent gainers in the session, Amazon, Eli Lilly, Procter & Gamble, Salesforce, Cisco Systems, American Express, Analog Devices and Nike advanced 1 to 2 percent.

Pfizer, Booking Holdings, Morgan Stanley, Merck, Chevron Corporation, Bank of America, Johnson & Johnson, Tesla and Exxon Mobil Corporation closed notably lower.

In overseas trading, Asian stocks ended mixed on Wednesday, with Chinese and Hong Kong markets falling sharply after U.S. President Donald Trump threatened tariffs on the EU and China to address trade imbalances and combat fentanyl trafficking.

European stocks closed broadly higher on Wednesday, and several markets in the region posted record highs, reacting to some upbeat earnings updates and on optimism about interest rate cuts by the Federal Reserve and a few other central banks, including the ECB, this year.

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Musk clashes with OpenAI CEO Sam Altman over Trump-supported Stargate AI data center project

STARGATE

Elon Musk is clashing with OpenAI CEO Sam Altman over the Stargate artificial intelligence infrastructure project touted by President Donald Trump, the latest in a feud between the two tech billionaires that started on OpenAI’s board and is now testing Musk’s influence with the new president.

Trump on Tuesday had talked up a joint venture investing up to $500 billion through a new partnership formed by OpenAI, the maker of ChatGPT, alongside Oracle and SoftBank.

The new entity, Stargate, is already starting to build out data centers and the electricity generation needed for the further development of fast-evolving AI technology.

Trump declared it “a resounding declaration of confidence in America’s potential” under his new administration, with an initial private investment of $100 billion that could reach five times that sum.

But Musk, a close Trump adviser who helped bankroll his campaign and now leads a government cost-cutting initiative, questioned the value of the investment hours later.

“(T)his is great for the country. i realize what is great for the country isn’t always what’s optimal for your companies, but in your new role i hope you’ll mostly put (America) first,” Altman wrote, using a U.S. flag emoji to represent America.

Behind the feud
The public clash over Stargate is part of a years-long dispute between Musk and Altman that began with a boardroom rivalry over who should run OpenAI, which both men helped found.

Musk, an early OpenAI investor and board member, sued the artificial intelligence company last year alleging it had betrayed its founding aims as a nonprofit research lab benefiting the public good rather than pursuing profits.

Musk has since escalated the dispute, adding new claims and asking for a court order that would stop OpenAI’s plans to convert itself into a for-profit business more fully. A hearing is set for February in a California federal court.

The world’s richest man, whose companies include Tesla, SpaceX and X, last year started his own rival AI company, xAI, that is building its own big data center in Memphis, Tennessee. Musk says it faces unfair competition from OpenAI and its close business partner Microsoft, which has supplied the huge computing resources needed to build AI systems such as ChatGPT.

When did Stargate start?
Tech news outlet The Information first reported on an OpenAI data center project called Stargate in March 2024, indicating that it’s been in the works long before Trump announced it.

Another company — Crusoe Energy Systems — announced in July it was building a large and “specially designed AI data center” at the northwest edge of Abilene, Texas at a site run by energy technology company Lancium. Crusoe and Lancium said in a joint statement at the time that the project was “supported by a multibillion-dollar investment” but didn’t disclose its backers.

AI technology requires huge amounts of electricity to build and operate and both companies said the project would be powered with renewable sources such as nearby solar farms, in a way that Lancium CEO Michael McNamara said would “deliver the maximum amount of green energy at the lowest possible cost.” Crusoe said it would own and develop the facility.

It’s not clear how and when that project became the first phase of the Stargate investment revealed by Trump. Abilene Mayor Weldon Hurt said construction began about nine months ago but “we didn’t know it was going to be quite this big. We thought it was going to be about a third of this size.”

Oracle co-founder Larry Ellison said Tuesday that the Abilene project is the first of about 10 data center buildings currently being built and that number could expand to 20.

Hurt told The Associated Press that the region surrounding Abilene, a city of about 130,000 people, benefits from a wealth of energy sources, including oil, gas, solar and some of the “largest wind farms in the world,” though Trump signaled opposition to wind power this week by temporarily halting approval of wind projects on federal lands.

“We have the capability to produce the energy for this market so it really means a lot for a town like Abilene,” Hurt said. “To have this opportunity here in west-central Texas, to have something like this to make Abilene substantial, we’re just excited about it.”

Where is Microsoft?
Missing from Trump’s press conference Tuesday was Microsoft, which has long supported OpenAI with billions of dollars in investments and enabling its data centers to be used to build the models behind ChatGPT and other generative AI tools.

Microsoft is also a technology partner in the Stargate project, along with chipmakers Nvidia and Arm, but put out a statement noting that its OpenAI partnership will “evolve” in a way that enables OpenAI “to build additional capacity, primarily for research and training of models.”

Asked about Musk’s comments about the Stargate deal Wednesday during a CNBC interview at the World Economic Forum in Davos, Switzerland, Microsoft CEO Satya Nadella pivoted to his company’s own $80 billion plan to build out its global AI infrastructure, of which $50 billion is being spent in the U.S.

“Look, all I know is, I’m good for my $80 billion,” said Nadella, laughing.

 

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Ramaswamy leaves Trump administration after one day

Trump 2.0 has only just started, and it has already had its first political casualty.

Back in November, then president-elect Donald Trump tapped Vivek Ramaswamy along with tech tycoon Elon Musk to lead a new agency focused on cutting federal spending and reducing government bureaucracy.

The Department of Government Efficiency, dubbed ‘DOGE,’ will operate outside traditional government structures with a mandate to identify and eliminate excessive regulation and spending.

The name references a cryptocurrency meme associated with Musk, who has pledged to target $2 trillion in federal budget cuts.

But much like his run for president was short-lived, so was Ramaswamy’s time at DOGE. 1 day to be precise.

On Monday, Trump spokesperson Anna Kelly confirmed his exit and suggested the billionaire is preparing to pursue political office in Ohio. The timing aligns with the 2026 Ohio gubernatorial race, as current Governor Mike DeWine will be term-limited and unable to seek reelection.

“Vivek Ramaswamy helped create DOGE,” Kelly told Fox News. “He intends to run for elected office soon, which requires him to remain outside of DOGE, based on the structure that we announced today. We thank him immensely for his contributions over the last 2 months and expect him to play a vital role in making America great again.”

 

https://tinyurl.com/3d9aaktt

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