A broad bounce after two down days
U.S. equities climbed Thursday as investors rotated back into risk after back-to-back declines earlier in the week.
- The Nasdaq led the move higher, rising close to 1%.
- The S&P 500 gained roughly 0.7%.
- The Dow added around 0.8%, helped by strength in financials.
The tone shifted fast: tech went from “drag” to “driver,” and banks went from “headline risk” to “earnings relief.”
TSMC sends the AI signal loud and clear
The biggest mood booster came from chip bellwether TSMC, which posted a 35% jump in fourth-quarter profit and beat expectations—another reminder that AI-related demand is still doing the heavy lifting across semis.
What stood out most for investors:
- Record quarter + strong guidance: Reinforced demand strength heading into 2026.
- Advanced chip mix is rising: 7nm and smaller chips made up 77% of wafer revenue in the quarter.
- Big spending plan for 2026: Capital expenditure guidance of $52B–$56B signaled confidence that AI buildouts aren’t slowing.
- HPC is the engine: High-performance computing (AI + 5G) represented 55% of sales, vs. 32% from smartphones.
That combination helped lift the broader “AI supply chain” trade, pulling chip-linked names higher and helping mega-cap tech regain its footing.
Banks catch a bid as earnings beat expectations
Financials also helped power the rebound after a rough patch earlier in the week. A fresh slate of earnings landed better than investors feared, giving bank stocks a spark.
Key takeaways from the reports:
- Goldman Sachs and Morgan Stanley showed strength tied to dealmaking and trading.
- BlackRock posted results supported by a massive asset base and solid performance.
- The market read-through: the financial system is still earning, even with policy noise in the background.
It wasn’t “everything is perfect”—but it was enough to push money back into the sector.
Oil drops hard as risk premium fades
While stocks climbed, oil moved the other way. Crude fell sharply as traders reassessed the odds of near-term escalation in the Middle East.
- Brent and WTI both slid roughly 4% in the morning trade.
- The move suggested risk premium was coming out, fast.
- Energy stocks didn’t lead the market—semis + banks did.
Silver cools off after a blistering run
Precious metals also eased, with silver pulling back after an explosive stretch that had pushed it into record territory.
Drivers behind the pullback:
- Less immediate fear trade as geopolitical risk cooled.
- Some profit-taking after a rapid, crowded move.
- A market that’s now trying to decide whether metals are in a new regime or just coming off a blow-off top.
What investors are watching next
The near-term roadmap is straightforward:
- More earnings from major sectors (financials, tech, consumer).
- Jobless claims and macro prints that could shift rate expectations.
- Whether the AI trade stays in control, or fades back into rotation.
WSA Take
TSMC just reminded the market who the real “AI bottleneck” is: advanced manufacturing capacity. When the world’s most important chip supplier prints a record quarter and signals even bigger spending ahead, it’s a green light for the AI bull cycle—not just for chips, but for everything downstream that rides on compute: cloud, software, robotics, automation, and the infrastructure buildout that powers it all.
Read our recent coverage on TSMC Delivering Record Quarter.
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Disclaimer
WallStAccess does not work with or receive compensation from any companies mentioned. This content is for informational and educational purposes only and should not be considered financial advice. Always conduct independent research before investing.
