U.S. stocks hit fresh record highs Tuesday as investors looked past geopolitical tensions and focused on renewed strength in tech and artificial intelligence.
The S&P 500 rose 0.62% to a record 6,944.82, while the Dow Jones Industrial Average jumped 485 points, or 0.99%, to close above 49,000 for the first time at 49,462.08. The Nasdaq Composite gained 0.65% to end at 23,547.17.
Big tech and AI-related stocks led the rally, with Amazon rising more than 3%, Micron Technology surging about 10%, and Palantir Technologies climbing over 3%. Semiconductor shares have started the year strongly, driven by continued enthusiasm for AI.
Markets showed little reaction to developments in Venezuela, as investors viewed the country’s limited role in global oil supply as unlikely to disrupt markets. Energy stocks rallied earlier in the week, though some gains faded as investors took profits.
Defense stocks could see upside this year as the U.S. continues to expand military operations, according to Morgan Stanley.
Analyst Kristine Liwag said rising geopolitical tensions and recent U.S. actions in Venezuela and Iran are making defense contractors’ products increasingly critical. Despite this, major U.S. defense firms still trade at about a 30% discount to the S&P 500, suggesting attractive valuations.
Morgan Stanley named Northrop Grumman its top pick, citing its strong capabilities, 33% gain over the past year, and a 1.5% dividend yield. Other favored defense stocks include RTX, L3Harris Technologies, and General Dynamics.
Analysts also pointed to increased Pentagon spending on technologies such as 3D printing and drones, with further budget growth expected in 2026. Still, Liwag noted that defense companies will need to adapt as warfare evolves, particularly with greater adoption of artificial intelligence and emerging technologies.
Chinese stocks climbed sharply, with the CSI 300 rising 1.6% to its highest level in four years and the Shanghai Composite gaining 1.5% to its strongest close since 2015. Materials and technology stocks led the advance.
Markets were lifted by strong manufacturing data, upbeat comments from President Xi Jinping, and continued enthusiasm for artificial intelligence. Investors are growing confident that the momentum that made Chinese equities global standouts last year will carry into 2026, supported by Beijing’s backing of key industries and efforts to stabilize the struggling property sector.
YADEA (01585.HK) is expected to record a net profit not less than RMB2.9 billion for the year ended 31 December 2025, representing an increase of at least 1.28x from a net profit of RMB1.27 billion for the same period in 2024, as announced by YADEA.
Capital A Bhd said Bursa Securities has rejected its request for more time to distribute AirAsia X Bhd shares, though Capital A still plans to proceed alongside AAX’s upcoming private placement. Bursa separately granted AAX an extension until Jan 19 to complete its placement, acquisition of AirAsia Aviation Group, and subscription options.
Tune Group, linked to Tony Fernandes, sold a nearly 15% stake in AAX to Nuodingyan Travel Service for RM1.80 per share, reducing Capital A–related holdings below the takeover threshold.
Theta Edge Bhd saw Lembaga Tabung Haji exit its entire 27.28% stake at a premium, with Stealth Solutions becoming the largest shareholder.
HSS Engineers Bhd said its associate is being sued by MEX II sukuk holders over alleged breaches in approving construction payments.
IGB Bhd proposed a one-for-two bonus issue, targeted for 1Q 2026.
Mega Fortris Bhd scrapped plans for a Macau plant, opting to expand production in Shah Alam.
Master Tec Group Bhd saw its Tenaga Nasional contract increased to RM142.4 million.
ICT Zone Asia Bhd secured a RM27.8 million ICT leasing order for a government agency.
Destini Bhd appointed former MRT Corp CEO Shahril Mokhtar as group managing director.
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