Stock Market Rises as TSMC Boosts AI Hopes and Bank Stocks Rally

Jan 16, 2026, 2:25 AM

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US stocks rose on Thursday, marking a recovery from back-to-back losses, as the strong outlook from chipmaker TSMC boosted hopes for artificial intelligence (AI) investments. The tech-heavy Nasdaq Composite (^IXIC) edged up nearly 0.3%, while the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) gained 0.3% and about 0.6%, respectively, bouncing back from two consecutive days of losses for the Wall Street indexes.

TSMC, the world's largest contract chipmaker, reported a remarkable 35% jump in fourth-quarter profit, largely attributed to the ongoing AI boom. The company announced plans to ramp up its investment to $56 billion by 2026, signaling confidence in sustained spending by major tech firms on AI infrastructure. Following this announcement, shares in TSMC surged, contributing to a rally in chip-related stocks, including ASML and Nvidia, which also saw a recovery, ending the day up over 2%.

The positive sentiment in the market marked a reversal from the previous day when tech stocks had led the decline, prompting a rotation out of megacap stocks into value names. Investors were also encouraged by a fresh batch of earnings reports from major banks. Goldman Sachs and Morgan Stanley reported significant profit increases, benefiting from a surge in deal-making activity. Additionally, BlackRock announced a record $14 trillion in assets, with its earnings exceeding expectations, leading to a surge in shares for all three firms.

In the commodities market, oil prices for Brent crude and West Texas Intermediate crude fell by approximately 4% amid indications that the US might be stepping back from a military response in Iran. President Trump stated that he had been informed that authorities in Iran would cease actions against protesters, which contributed to the decline in oil prices.

Overall, the stock market's performance on Thursday reflects a combination of strong corporate earnings, particularly in the tech and finance sectors, and a positive outlook for future investments in AI technology. As investors continue to assess the implications of these developments, the market appears to be stabilizing after recent fluctuations.

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