S&P 500 Hits Record High as Trump Pushes Rate Cuts, Lower Oil; GE Aerospace Soars

Dow Jumps, S&P 500 Sets Record as Trump Targets Rate Cuts and Oil Prices

The S&P 500 rose 0.23% on Thursday, reaching a new intraday record for the second straight session, while the Dow Jones Industrial Average jumped 371 points, or 0.8%. The Nasdaq Composite lagged, slipping 0.18%, as Nvidia, Tesla, and Amazon pulled back. A combination of President Donald Trump’s calls for immediate interest rate cuts and lower oil prices, along with resilient corporate earnings, bolstered the market.

However, labor market data released earlier in the day tempered optimism. Initial jobless claims edged up to 223,000 for the week ending January 18, slightly above expectations of 221,000. Continuing claims surged to nearly 1.9 million, their highest level in over three years, signaling that while layoffs remain low, unemployed workers are taking longer to find new jobs.

Which Sectors Drove the Rally?

Healthcare and industrials led the way, gaining 1.02% and 0.98%, respectively, on strong earnings and policy optimism. Financials and energy also advanced, each rising 0.49%. Energy stocks held steady despite oil prices dipping after Trump’s remarks urging Saudi Arabia to reduce crude costs.

Defensive plays, such as consumer staples and real estate, edged higher as traders balanced risk exposure. The technology sector was the main laggard, down 0.43%, weighed by notable declines in large-cap tech names like Nvidia and Amazon.

Earnings Impact: Who Soared and Who Sunk?

American Airlines tumbled over 8% following weaker-than-expected first-quarter guidance, projecting an adjusted loss of $0.20 to $0.40 per share. Similarly, Electronic Arts plunged 17% after lowering its net bookings forecast, citing underwhelming performance from its key gaming franchises.

In contrast, GE Aerospace surged nearly 7% after reporting a strong earnings beat, with adjusted earnings of $1.32 per share surpassing estimates of $1.04. Union Pacific gained almost 5% after delivering better-than-expected earnings despite slightly missing revenue forecasts.

Other notable movers included Alaska Air, which climbed more than 4% on strong fourth-quarter earnings, and Guidewire Software, which jumped 9.9% after a bullish initiation by Goldman Sachs highlighting its growth potential in cloud adoption.

What Should Traders Watch Next?

While the market continues to cheer fiscal stimulus and deregulation hopes, labor market trends bear close scrutiny. The increase in continuing jobless claims could point to broader economic softening, which may influence Federal Reserve policy.

Upcoming earnings from key tech and financial firms, coupled with inflation data and oil price volatility, will also play a pivotal role in shaping sentiment. Traders should remain alert to any developments that could shift the current bullish tone in equity markets.

More Information in our Economic Calendar.