HomeBusinessTrump turns to AI as tariffs loom, Netflix rises

Trump turns to AI as tariffs loom, Netflix rises

A look at the day ahead in the US and global markets by Mike Dolan

While maintaining a persistent, if uncertain, threat of new tariffs, US President Donald Trump this week quickly shifted his focus to technology and artificial intelligence, stoking the red-hot sector that is about to post its latest round of earnings.

Trump on Tuesday announced an investment of up to $500 billion in the private sector to fund artificial intelligence infrastructure, aiming to surpass rival countries in mission-critical technology.

The newly sworn-in president said ChatGPT maker OpenAI, SoftBank and Oracle are planning a joint venture called Stargate, which he said will build data centers and create more than 100,000 jobs in the United States.

Shares of Softbank rose more than 10% in Tokyo trading, while Oracle rose 9% outside hours ahead of Wednesday’s bell.

With technology buzzing again, streaming giant Netflix burst 14% higher in premarket trading on Wednesday after its latest earnings update revealed a record 18.9 million new subscribers during the holiday quarter and plans for price hikes.

The renewed focus on technology comes as the Nasdaq has marginally underperformed the broader S&P500 so far this year, with even Apple under a cloud on Tuesday despite solid gains in the Wall Street stock index. Apple’s withdrawal allowed AI chip darling Nvidia to regain the top spot as America’s most valuable company.

With some big industrial names at the top of the corporate agenda on Wednesday, and the top 10% of S&P500 companies pointing to total annual earnings growth of nearly 11% over the past quarter, stock futures rose sharply ahead of the open.

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The S&P500 closed above 6,000 points for the first time this year on Tuesday – less than 1% from record highs.

Despite the AI ​​tilt, Trump continued to rattle the tariff saber overnight — without necessarily providing much additional clarity on exactly where or when they would come.

Trump vowed to hit the “very, very bad” European Union with tariffs and said his administration was also discussing a punitive 10% tariff on Chinese imports – blaming the fentanyl trade from China to the US via Mexico and Canada.

However, currency swings around the threats appeared to have calmed down, with traders taking a wait-and-see approach and assuming that any movement would only occur after the countries in question responded to Trump’s key concerns.

The dollar index fell to its lowest level in two weeks, with the euro hitting its best level of the year so far, even as European Central Bank officials speaking in Davos backed more interest rate cuts this year.

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