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Wall Street rallied on Wednesday with the benchmark S&P 500 scaling record intraday levels, as Netflix surged after smashing expectations for subscriber growth, while chip stocks gained on ASML’s strong earnings.

The S&P 500 hit an intraday all-time high for the third time in less than a week, fueling a bull-market run it confirmed on Friday after closing at a record. The blue-chip Dow had also surpassed the 38,000-point mark for the first time on Monday.

The tech-laden Nasdaq is around 4% away from breaching its all-time high hit in November 2021.

Shares of Netflix rose 12.9% to a two-year high after the firm’s largest-ever fourth-quarter subscriber growth indicated it had won streaming wars with its password-sharing crackdown and a strong content slate.

The communication services sector housing the stock led sectoral gains with a 1.6% rise.

Netflix subscribers jump despite price hikes

“The Netflix number caught everybody by surprise, and my expectation was that the subscriber growth for all the streaming services will continue to contract and that was a bit of an anomaly,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.

Keeping investor euphoria in check, AT&T shed 2% after forecasting annual profit below expectations, while DuPont De Nemours slid 13.4% after forecasting a fourth-quarter loss, compared with a year-ago profit.

With the S&P 500 trading around 20 times forward 12-month earnings, compared with its long-term average of 16 times, the results of the “Magnificent 7” group of companies will be in focus to determine whether their valuations are justified.

Megacaps such as Microsoft, Amazon.com and Meta Platforms rose between 0.5% and 1.7%, as U.S. Treasury yields fell. Tesla rose 0.1% ahead of its fourth-quarter results later in the day.

Chip stocks including Nvidia, Advanced Micro Devices and Intel gained between 1.1% and 3.4% after European chip-making equipment maker ASML Holding beat fourth-quarter earnings estimates and posted record-high quarterly orders.

At 9:49 a.m. ET, the Dow Jones Industrial Average was up 89.52 points, or 0.24%, at 37,994.97, the S&P 500 was up 22.07 points, or 0.45%, at 4,886.67, and the Nasdaq Composite was up 103.43 points, or 0.67%, at 15,529.37.

On the data front, a survey showed business activity picked up in January and inflation appeared to abate, suggesting that the economy kicked off 2024 on a strong note.

Netflix to stream WWE Raw in $5bn bet on live events

A resilient U.S. economy and uncertainty over the timing of interest rate cuts have led investors to reassess their bets.

Traders now see an 87% chance of a rate cut in May, according to CME Group’s FedWatch Tool. They were earlier expecting a rate cut in as early as March.

Among others, cloud firms Cloudflare, Snowflake and ServiceNow rose more than 1.3% each on the back of German software firm SAP’s strong annual revenue growth forecast.

U.S.-shares of Alibaba, Bilibili and Li Auto added between 1.6% and 3.0% after China’s central bank announced a deep cut to bank reserves.

Advancing issues outnumbered decliners by a 4.50-to-1 ratio on the NYSE and a 2.56-to-1 ratio on the Nasdaq.

The S&P index recorded 55 new 52-week highs and no new lows, while the Nasdaq recorded 78 new highs and 21 new lows.

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