US stock markets edged higher on Wednesday, achieving a significant milestone as the S&P 500 index breached the 7,000-point mark for the very first time. This historic move underscores sustained investor optimism fueled by artificial intelligence advancements, resilient earnings prospects from Big Tech companies, and growing expectations of eventual monetary easing by the Federal Reserve.
Record-Breaking Rally Accelerates
The benchmark S&P 500 index rose by 0.3 percent, extending gains after its latest record close. The Dow Jones Industrial Average advanced by 114 points, or 0.2 percent, while the Nasdaq Composite climbed 0.5 percent in early trading, according to AP reports.
The pace of the S&P 500's ascent has accelerated dramatically in recent years. It took nearly three years for the index to rise from 4,000 to 5,000 points, but only about nine months to move from 5,000 to 6,000, a level reached in November 2024. The swift push past 7,000 points reflects mounting confidence in US corporate earnings and the economy's ability to withstand tighter financial conditions.
Technology Stocks Lead the Charge
Gains on Wednesday were spearheaded by heavyweight technology stocks after Dutch chip equipment maker ASML issued a 2026 revenue forecast that exceeded market expectations. This announcement reinforced confidence in sustained demand linked to artificial intelligence developments.
ASML's customers have become more optimistic about the medium-term outlook, driven largely by expectations for the sustainability of AI-related demand, according to chief executive Christophe Fouquet. This helped ease concerns that the AI rally could be approaching bubble territory.
Nvidia, widely seen as the bellwether of the AI boom, rose 1.2 percent, making it the single biggest contributor to the S&P 500's advance. ASML's US-listed shares remained little changed during the session.
Mixed Earnings Reactions
Elsewhere in the market, stock movements were mixed following fresh earnings updates. Starbucks jumped 4.9 percent after quarterly revenue beat expectations, aided in part by strong demand for a viral promotional cup, even though profits for the end of 2025 missed estimates.
In contrast, Amphenol slid 14.9 percent despite reporting stronger-than-expected profit and revenue growth. Elevated expectations weighed on the stock after a sharp rally earlier this year.
Analysts noted that companies remain under pressure to deliver robust earnings growth following the market's record-setting run, with stock prices becoming increasingly vulnerable to any disappointment.
Currency and Bond Market Movements
In currency markets, the US dollar stabilized, rising about 0.3 percent against both the British pound and Japanese yen. This came a day after a broader dollar index fell to its weakest level since early 2022.
The dollar has generally weakened since President Donald Trump returned to the White House last year, with losses accelerating after renewed tariff threats against parts of Europe earlier this month. These risks, combined with concerns over US government debt, have periodically prompted global investors to reduce exposure to US assets—a trend often referred to as Sell America.
In the bond market, Treasury yields remained steady ahead of the Federal Reserve's interest rate decision later in the day. The 10-year yield held at 4.24 percent. The Fed is widely expected to keep rates unchanged, balancing persistent inflation against growth risks.
Commodities and Global Markets
Commodities remained firm as investors sought safe havens. Gold added another 3.5 percent to reach $5,258.50 an ounce, after crossing the $5,000 mark for the first time earlier this week.
Overseas markets presented a mixed picture. European indices slipped, while Asian stocks posted strong gains. South Korea's Kospi rose 1.7 percent to a fresh record, supported by a sharp jump in SK Hynix shares. Meanwhile, Hong Kong's Hang Seng rallied 2.6 percent during the trading session.
