Stock Market Rises as TSMC Fuels AI Optimism and Banks Rally

Jan 18, 2026, 2:24 AM

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US stocks rose on Thursday, marking a recovery from back-to-back losses as chip linchpin TSMC's strong outlook boosted AI hopes and bank stocks rallied following upbeat earnings reports from two Wall Street heavyweights.

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. This rebound comes after two consecutive days of losses for the major Wall Street indexes.

TSMC (TSM), the world's largest contract chipmaker, reported a remarkable 35% jump in fourth-quarter profit, largely attributed to the ongoing AI boom. The company, a key supplier to tech giants Nvidia (NVDA) and Apple (AAPL), announced plans to ramp up investment to $56 billion by 2026, signaling confidence in sustained Big Tech spending on AI infrastructure. Following this announcement, shares in TSMC surged, igniting a rally in chip-related stocks, including ASML (ASML). Nvidia also rebounded from a decline earlier in the week, 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, contributing to a weeks-long rotation out of megacaps into value names.

In addition to the tech sector's boost, investors were also encouraged by a fresh batch of earnings reports from major banks. Goldman Sachs (GS) and Morgan Stanley (MS) both reported significant profit surges, capitalizing on a dealmaking boom to close out the year. BlackRock (BLK) also reported record earnings, capping 2025 with $14 trillion in assets, further contributing to the positive momentum in the financial sector. Shares of these firms saw substantial increases as a result of their strong performance.

Meanwhile, oil prices experienced a decline, with Brent crude and West Texas Intermediate crude sinking by approximately 4% each. This drop was attributed to indications that the US is stepping back from a military response in Iran, as President Trump stated that authorities there would cease actions against protesters.

In the commodities market, silver (SI=F) saw a decrease but managed to pare losses by afternoon trading, following a recent explosive rally that had pushed the metal's total market value above $5 trillion.

Overall, the stock market's performance on Thursday reflects a renewed investor confidence, driven by strong corporate earnings and optimistic forecasts in the tech sector, particularly regarding AI advancements.

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