January 26, 2025: Markets Hit Records as Tech Surge and Trump's "Stargate" Fuel Rally—AI Infrastructure Takes Center Stage

The S&P 500's 1.74% weekly gain pushed it to all-time highs, while the NASDAQ rode a powerful semiconductor rally (+3.3% sector-wide) amid President Trump's massive AI infrastructure announcement. Here's what it means for your portfolio positioning heading into February.

Key Developments

  • S&P 500 reached new heights (up 1.74% vs. 1.2% expected), marking the best start to a presidential term since Reagan's in 1985
  • Earnings season showing exceptional strength with 80% of reports beating EPS estimates
  • TSX posted 2.09% YTD gains despite energy sector pressure from U.S. policy concerns

Sector Breakdown

Technology Leaders:

  • Semiconductor stocks (VanEck SMH ETF +3.3%)
  • AI infrastructure plays (Nvidia +3.4%, Oracle +12%)
  • Cloud computing names (Microsoft, Amazon posting gains)
  • Notable performer: Netflix (+12.5%)

Notable Laggards:

  • Energy stocks (TSX energy sector down on Trump policy concerns)
  • Traditional industrials
  • Small-cap stocks showing weakness

Strategic Playbook

For Short-Term Traders

  • Consider momentum plays in semiconductor stocks ahead of additional "Stargate" initiative details
  • Watch for technical breakouts in AI-adjacent names, particularly in cybersecurity and cloud infrastructure
  • Monitor mining equities on TSX showing consistent strength (Agnico Eagle +1.17%, Barrick Gold +1.89%)

For Long-Term Investors

  • Consider increasing allocation to broad technology ETFs to capture $500B AI infrastructure spending
  • Look for quality Canadian tech names (Shopify, Constellation Software) trading at reasonable valuations
  • Position for potential beneficiaries of the "Stargate" initiative, particularly in AI infrastructure

Forward Outlook

Catalysts to Watch

  • Remaining Q4 earnings reports (84% of S&P 500 still to report)
  • Federal Reserve rate decision and commentary on projected 2025 cuts
  • Details on "Stargate" initiative implementation timeline and partnerships with OpenAI, SoftBank, MGX, Oracle

Risk Radar

  • Potential trade tensions impact on TSX components
  • Tech sector valuations stretching historical norms
  • Geopolitical risks from new tariff policies
  • Treasury yield movements affecting market sentiment

Sources

  1. Federal Reserve Economic Data
  2. S&P Global Market Intelligence
  3. Toronto Stock Exchange (TSX) Reports
  4. Presidential Economic Advisory Board
  5. Trading Economics
  6. Investopedia Markets News
  7. TipRanks Market Analysis

Past performance does not guarantee future results. All data verified from official market reports and financial sources as of January 26, 2025.