Trump declares ‘America is back!’ as US markets touch record highs
Renewed AI-hype helped the S&P 500 break through the 7,000 mark for the first time ever on Wednesday, while the dollar clawed back some ground after a bruising few weeks.
Equities soon pared their gains, falling below the 7,000 benchmark a few hours after the opening bell, and the S&P 500 had swung back into the red at the UK market close.
Still, the 7,000 benchmark was a cause of celebration for some. “The S&P 500 just hit 7000 for the FIRST TIME EVER. AMERICA IS BACK!!!,” President Donald Trump posted on the Truth Social platform.
Early gains were boosted by hopes that the latest set of Big Tech earnings, due after the closing bell, would prove that the AI boom still had further to run.
Sentiment was improved by a positive set of results yesterday from Dutch chipmaker ASML and US data storage provider Seagate Technologies, both of which indicated rising demand for AI.
“Results like these are helping to put worries to bed about the AI boom faltering any time soon,” Susannah Streeter, chief investment strategist at Wealth Club said.
“Tech is once again setting the tone as investors bet on the AI boom continuing, fuelling the prospects for listed companies.”
Big Tech stocks have trailed the wider S&P 500 so far this year, but analysts said their quarterly results could prove a catalyst for a recovery – or further weakness. Microsoft, Meta, and Tesla will all report on Wednesday while Apple will release its latest quarterly update on Thursday.
“The options market is pricing in a big reaction for tech stocks on the back of these earnings reports,” Kathleen Brooks, research director at XTB said. “This suggests that one misstep by the Magnificent 7 could see their shares fall further behind.”
Investors will also have the US Federal Reserve’s latest interest rate decision to digest, the first since Trump’s unprecedented decision to launch a criminal investigation into Jerome Powell.
While rates will likely be left on hold again, traders still think that the Fed may still cut rates twice this year, giving the rally some extra fuel.
Dollar recovery
The dollar, meanwhile, posted a late recovery after the dollar index – which measures the greenback against a basket of global currencies – fell to its lowest level in four years earlier in the day.
At UK market close on Wednesday, the dollar index was trading 0.3 per cent higher at 96.50, having dropped to a low of 95.85 earlier in the day – its lowest reading since February 2022.
The currency has faced intense selling pressure in 2026 due to the President’s erratic foreign interventions and economic management, and recorded its largest one-day drop since April on Tuesday. after the President said he was not concerned by its weakness.
“I think the value of the dollar – look at the business we’re doing. The dollar’s doing great,” he told reporters on a trip to Iowa.
Initially, traders dumped the greenback again on Wednesday, but comments from Scott Bessent, the Treasury Secretary, offered the currency some support later in the day.
In an interview with CNBC, Bessent insisted that the US was still pursuing a “strong dollar policy”. He also ruled out intervening to support the Japanese yen, a move which would have weakened the greenback still further.