US stocks opened higher on Thursday evening, Beijing time. The chip sector led the gains, as strong earnings from Taiwan Semiconductor Manufacturing (TSM) revived market confidence in the resilience of AI demand. Brent crude oil fell below $65, with the pullback in oil prices providing support to the market. Investors continued to assess earnings reports from major banks.

The Dow Jones Industrial Average rose by 100.80 points, or 0.21%, to [points not provided in original text]; the Nasdaq Composite climbed 205.01 points, or 0.87%, to 23,676.76; and the S&P 500 increased by 44.70 points, or 0.65%, to 6,971.30. Taiwan Semiconductor Manufacturing (TSM) advanced 3.8%, after the company once again delivered a record quarterly performance, reporting a 35% profit increase. TSM's earnings report rekindled investor confidence in the resilience of artificial intelligence (AI) demand. Boosted by TSM's results, chip stocks including Micron Technology, NVIDIA, and AMD saw broad gains on Thursday. Suppliers to TSM, Applied Materials and Lam Research, also moved higher. The "Magnificent Seven" tech stocks were all in positive territory, albeit with relatively more modest increases. US President Trump signed a proclamation on Wednesday imposing a 25% tariff on certain chip products, including NVIDIA's H200 and AMD's MI325X. However, the proclamation also emphasized that "these tariffs will not apply if the chips are imported to support the construction of the US technology supply chain." In other words, this 25% tariff will not apply to chips imported for the US technology supply chain, or those used to enhance domestic manufacturing capacity for semiconductor-derived products. Gary Tan, a portfolio manager at Allspring Global Investments, stated, "TSM's guidance approach suggests there is still room for upward revisions to market consensus expectations and supports a more constructive outlook." Kyle Rodda, an analyst at Capital.com, commented, "A sector rotation is underway on Wall Street, which is ultimately weighing on index performance, but also indicates that the market's internal structure remains quite robust overall." An example of improved market "breadth" is that the S&P 500 Equal Weight Index, which calculates the index using equal weighting to remove the influence of overly large mega-cap stocks, has climbed 3.6% year-to-date in January, while the S&P 500 index itself has risen only 1.1%. The small-cap Russell 2000 index has gained nearly 7% this month. Jim Reid, a strategist at Deutsche Bank, noted, "We have seen a more pronounced rotation pattern since the start of the year, with the Russell 2000 small-cap index hitting a new record and outperforming the S&P 500 for the ninth consecutive trading day." Morgan Stanley reported better-than-expected fourth-quarter results. Goldman Sachs' stock edged lower, despite its profit exceeding expectations for the most recent quarter. The pullback in oil prices also provided support to the market, with both Brent crude and the near-month West Texas Intermediate (WTI) contract falling nearly 3%. Geopolitical risks affected investor sentiment this week. They initially led to rising oil prices, as heightened tensions between the US and Iran, a major OPEC member, intensified concerns about supply disruptions. Subsequently, oil prices retreated after President Trump indicated he might not attack Iran. Trump administration officials also met with the foreign ministers of Denmark and Greenland on Wednesday, as Trump continued his push for US control over Greenland. A Danish official stated that Denmark and Trump had a "fundamental disagreement" over the kingdom's ownership of Greenland, a disagreement that was not resolved during the meeting. On the economic data front Thursday, US initial jobless claims fell last week, while manufacturing outlooks in both the New York and Philadelphia regions far exceeded expectations. Data from the US Labor Department showed that seasonally adjusted initial jobless claims totaled 198,000 for the week ending January 10th, a decrease of 9,000 from the previous week and lower than the Dow Jones estimate of 215,000. The four-week moving average fell to 205,000, its lowest level since January 20th, 2024. According to the New York Fed, the Empire State Manufacturing Index for January was 7.7, up 11 points from December and better than the expectation of 1.0. The Philadelphia Fed Manufacturing Index came in at 12.6, up from the previous month's -8.8 and significantly better than the expected -4.5. Stocks in Focus Optical communication concept stocks such as Lumentum, Coherent, and Astera Labs moved higher. SanDisk's stock price rose after brokerage Bernstein adjusted its price target from $300 to $580. Memory concept stocks including Micron Technology and Western Digital saw broad gains pre-market. Boston Scientific will acquire Penumbra for $14.5 billion. Morgan Stanley's Q4 net revenue exceeded expectations. Music streaming platform Spotify announced subscription price increases in the US and other regions. Bank of America anticipates strong Q4 order growth for GE Vernova and expects adjusted EBITDA to significantly surpass expectations. The FDA is set to make a decision on Eli Lilly's weight-loss drug on April 10th. Goldman Sachs is optimistic that Biogen's Leqembi and its R&D pipeline will support structural changes leading to increased revenue and profits. KeyBanc downgraded Rocket Lab from "Overweight" to "Sector Weight." Nokia was selected to operate New Zealand's Connexa network, and Morgan Stanley upgraded its rating to "Overweight." Taiwan Semiconductor Manufacturing's (TSM) Q4 results and its 2026 outlook both exceeded expectations.