CNBC Daily Open: Trump’s demands push S&P to new record

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Trump’s Davos address
U.S. President Donald Trump addressed the World Economic Forum in Davos, Switzerland, virtually on Thursday. In his speech, Trump said he would “demand that interest rates drop immediately,” ask Saudi Arabia and OPEC to “bring down the cost of oil,” and called the European Union’s trade relationship with the U.S. very unfair.

Record close for S&P
The S&P 500 closed at a fresh high on Thursday as investors liked what they heard from Trump regarding rate cuts. All major U.S. benchmarks are on a four-day winning streak. Europe’s regional Stoxx 600 index added 0.44%. Puma shares slumped around 23% after it missed full-year 2024 profit expectations and revealed plans on Wednesday to cut cost.

Crypto order signed by Trump
Cryptocurrency advocates got another boost from Trump on Thursday after he signed an executive order to promote the advancement of cryptocurrencies in the U.S. Most of the order focuses on establishing technology and rules around crypto. One of the critical pieces is the creation of a working group to consider a national digital asset stockpile.

Boeing projects huge loss
Boeing said Thursday that it likely lost about $4 billion in the fourth quarter, or a loss of $5.46 per share. Revenue will probably come in at $15.2 billion, lower than LSEG estimates. Boeing has not posted an annual profit since 2018. The aircraft maker began 2024 with a midair accident and ended it with a crippling labor strike and layoffs.

[PRO] Back to Apple soon?
Apple’s shares are headed for their fourth straight losing week and are down nearly 11% so far in January, while stocks more directly tied to artificial intelligence, such as Nvidia and Oracle, have rallied. But it’s still the early days of AI. Here’s why investors could flock back to Apple in the middle of the year, wrote a Goldman Sachs analyst.

Markets are supposed to run on numbers: past performance, projections of profits, return on equity. But words are equally powerful in their capacity to move markets, as Trump’s virtual address to the World Economic Forum on Thursday demonstrated.

The price of U.S. crude and the global benchmark Brent dropped on Trump saying he’d “ask Saudi Arabia and OPEC to bring down the cost of oil.”

And after Trump said he would “demand that interest rates drop immediately,” the 2-year Treasury yield, which tends to track short-term interest rates, edged lower, while stocks ticked up.

In fact, the S&P 500 added 0.53% to close at a record closing high of 6,118.71. Its last all-time closing high was 6,090.27 in early December. The Dow Jones Industrial Average rose 0.92% and the Nasdaq Composite gained 0.22%. It was the fourth consecutive session in the green for all three indexes.

But unlike numbers — which are factual (most of the time, anyway) — words can be capricious.

“Trump’s Davos speech contained some ostensibly positive lines (he called for OPEC to lower oil prices, demanded central banks lower interest rates, and reiterated prior pledges to slash taxes and regulation) but there was very little either incremental or within his control,” Adam Crisafulli, founder of Vital Knowledge, said in a note.

That doesn’t mean Trump won’t carry through his declarations. It’s unwise, however, to bank on comments ungrounded by concrete action.

On the other hand, there are some words that have the heft of policy behind them and should be taken seriously by investors.

The U.S. Federal Reserve meets next week. While the chance of a rate cut then is near zero, according to CMEGroup’s FedWatch Tool, what Chair Jerome Powell says at his press conference is “likely to cause market volatility,” according to James Demmert, chief investment officer at Main Street Research.

Learning what to listen to, then, could be as important for investors as deciphering numbers.

— CNBC’s Alex Harring and Jesse Pound contributed to this report.