Martin Gamble on US markets: US stocks hit record highs, Netflix slumps

US markets continued their march upwards led by renewed enthusiasm for AI stocks and supported by growing optimism over a peaceful solution in the Middle East.

The S&P 500 breached 7,000 points for the first time with new all-time highs also seen in the Nasdaq Composite and Russell 2000 indices.

The S&P 500 has now gained 10% in just over 11 trading days, breaking the prior record for the fastest recovery from a near 10% drop which happened during the dotcom era.

Economic data was supportive with producer prices rising 0.5% compared with the 1.1% forecast by economists. Excluding food and energy prices, core producer prices were up 0.1% against 0.5% expected.

An index of AI-related stocks comprising 25 of the largest technology companies gained more than 23% to a new high.

Oracle had its best weekly gain in 20-years, surging nearly 30% after announcing an expansion of its multi-cloud networking partnership with Amazon Web Services.

Industrial supplies distributer Fastenal fell nearly 10% after the company warned of rising input costs related to rising oil prices.

Elsewhere, United Airlines CEO floated the idea of a merger with American Airlines, to create the largest airline in the world, controlling around a third of US traffic. United shares fell while American shares gained around 7%.

Investors switch off as Netflix guidance disappoints

Streaming giant Netflix saw a 10% fall in pre-market trading as guidance for the current quarter, issued alongside its numbers for the first three months of 2026, fell short of expectations.

The company expects to post second-quarter earnings of $0.78 versus the $0.84 which analysts had pencilled in. Co-founder and chair Reed Hastings also announced he is stepping down as chair of the business from June.

Results for the quarterly period to 30 March were better-than-anticipated – boosted by higher membership prices and increased advertising revenue (a big area of focus for the business).

The decision to walk away from a takeover of Warner Bros has largely been well received by investors but, assuming rival bidder Paramount Skydance’s own deal goes through this could represent an increased competitive threat to the business.

This explains initiatives like a move into ‘vertical video’, along the lines of the short-form content on platforms like TikTok and YouTube, and expansion in other areas like sports and gaming.

US bank earnings get mixed reception despite strong trading

First-quarter investment bank earnings beat market expectations across the board, although you might not have guessed it from the muted share price reactions this week.

Citigroup emerged as a winner with the shares gaining 6% to around $132, a new 12-month and decade high, after notching up its best quarterly revenue in 10-years.

Heightened market volatility proved a boon for its trading desk and other investment banks including the US’s largest bank, JPMorgan and Bank of America, with both booking record trading revenues.

Continued strength in mergers and acquisitions boosted the value of total global deals to $1.39 trillion according to Dealogic data, helping drive a 28% rise in investment banking revenues at JPMorgan and a 48% increase at Goldman Sachs.

Net interest income – the difference between what banks earn on loans and pay out on deposits – was more of a mixed bag. JPMorgan and Bank of America grew net interest income by 10% to 11% while Wells Fargo’s 5% growth missed consensus expectations.

Despite noting a resilient US economy bank CEOs struck a caution tone on the future with JPMorgan’s Jamie Dimon warning of mounting global economic risks.

Johnson & Johnson impresses as it upgrades outlook

Healthcare giant Johnson & Johnson topped consensus analysts’ earnings expectations and raised its full year outlook driven by strong demand for its cancer drug Darzalex and psoriasis treatment Tremfya.

The performance was even more impressive in the light of a steep 60% year-over-year drop in sales of blockbuster immunology drug Stelara, due to patent expiry.

Stelara, which treats psoriasis, Crohn's disease and other autoimmune conditions, generated more than $10 billion of annual sales at its peak, now faces competition from cheaper copycat makers.

J&J raised 2026 revenue guidance to $110.8 billion at the midpoint of the range, slightly above analysts’ estimates and adjusted earnings per share to $11.55, roughly in line with current market forecasts.

Some analysts suggested the raise was conservative, opening the door to further upward tweaks later in the year.

The shares closed around 1% higher on 14 April before drifting back, reflecting a 50% gain over the last year compared with a 33% increase in the S&P 500 index.