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
- Federal Reserve Economic Data
- S&P Global Market Intelligence
- Toronto Stock Exchange (TSX) Reports
- Presidential Economic Advisory Board
- Trading Economics
- Investopedia Markets News
- 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.