U.S. equity futures pointed higher Thursday as semiconductor stocks surged following strong earnings from Taiwan Semiconductor Manufacturing. The advance suggested a potential rebound after recent losses, while investors assessed bank earnings, easing oil prices, and labor market data.
Traders work on the floor of the New York Stock Exchange as U.S. stock futures point to a higher open on Thursday.
Futures Indicate Firmer Open Across Major Indexes
Stock index futures showed mixed but generally positive momentum before the opening bell. S&P 500 futures climbed about 0.4%, while Nasdaq-100 futures advanced close to 1%. Dow Jones Industrial Average futures remained little changed.
The move followed two consecutive losing sessions for major benchmarks. Wednesday’s decline marked the sharpest drop this year for both the S&P 500 and Nasdaq Composite, pressured by weakness in megacap technology and bank shares.
Despite index losses, market breadth remained constructive. The Russell 2000 small-cap index extended gains and reached another record, reinforcing evidence of ongoing sector rotation beneath headline performance.
Taiwan Semiconductor Earnings Ignite Chip Sector Rally
Semiconductor shares outperformed after Taiwan Semiconductor Manufacturing reported stronger-than-expected quarterly results. The world’s largest advanced chip producer posted a 35% jump in profit, driven by continued artificial intelligence demand.
U.S.-listed shares of Taiwan Semiconductor rose more than 5% in premarket trading. The company also issued an upbeat outlook for the first quarter and full-year 2026 while increasing its dividend by 20%.
Taiwan Semiconductor Manufacturing reported a record quarter, lifting global chip stocks in early trading. (Source: news.northeastern.edu)
Chipmakers tied closely to Taiwan Semiconductor moved higher in response. Nvidia, Advanced Micro Devices, and Broadcom posted modest gains, while chip-equipment firms Lam Research, Applied Materials, and KLA recorded stronger advances.
Several traders referenced the earnings reaction on social media, noting renewed momentum across semiconductor supply chains. Posts focused on capital spending increases and expanding U.S. manufacturing capacity plans.
Tariffs and Export Signals Provide Policy Clarity
The semiconductor rally unfolded alongside updated trade policy guidance from the White House. President Donald Trump signed a proclamation imposing a 25% tariff on certain imported chips, with exemptions for U.S. supply chain buildouts.
The administration also confirmed approval for Nvidia’s H200 chip sales to China, with the U.S. government receiving a 25% share of revenue. Officials emphasized that newer chip generations already exceed H200 performance.
Demand for artificial intelligence chips continues to drive capital spending across the semiconductor supply chain. (Source: Tradingview)
Earlier reports suggesting Chinese customs restrictions on Nvidia shipments had unsettled markets. Clarification on exemptions and approvals helped stabilize sentiment across AI-focused semiconductor names.
Bank Earnings Mixed as Sector Faces Pressure
Large U.S. banks continued reporting quarterly earnings, producing uneven stock reactions. Morgan Stanley exceeded expectations on earnings and revenue, supported by strong wealth management results, lifting shares modestly.
Morgan Stanley and Goldman Sachs reported their quarterly earnings as investors assessed the outlook for the banking sector.Â
Goldman Sachs also posted better-than-expected earnings, though revenue fell short of forecasts. Its shares slipped slightly in early trading, extending a cautious tone across financial stocks.
Other banking giants faced pressure earlier this week. JPMorgan, Wells Fargo, Bank of America, and Citigroup declined following mixed reactions to investment banking and lending updates, despite overall profit growth.
Oil Prices Fall as Geopolitical Risks Ease
Oil prices declined sharply, providing broader market support. Brent crude and West Texas Intermediate futures fell more than 4% after President Trump signaled restraint toward military action against Iran.
Earlier gains in oil had reflected concerns about potential supply disruptions tied to U.S.-Iran tensions. The subsequent pullback reduced inflation concerns and supported equity sentiment across multiple sectors.
Energy stocks remained elevated following recent strength, while lower crude prices eased pressure on transportation and industrial companies sensitive to fuel costs.
Economic Data Reinforces Labor Market Strength
Fresh U.S. economic data pointed to continued labor market resilience. Weekly jobless claims fell to 198,000, well below economists’ expectations of 215,000 for the period ending January 10.
The four-week moving average declined to its lowest level in nearly two years. Manufacturing data from the New York and Philadelphia Federal Reserve districts also exceeded forecasts, signaling improving regional activity.
Treasury yields rose following the data release, while traders continued pricing at least two interest rate cuts by year-end. Federal Reserve officials were scheduled to speak later Thursday.
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Market Rotation Persists Beneath Index Volatility
While megacap technology and bank shares faced pressure, broader market participation remained firm. Materials, industrials, energy, and real estate indexes recently reached multi-month or record highs.
Small-cap stocks continued to attract inflows, with the Russell 2000 outperforming larger peers. Equal-weight S&P 500 measures also set new records, reflecting diversified leadership.
Investors remained focused on earnings momentum and sector positioning as fourth-quarter reporting gained pace. Semiconductor strength, easing energy prices, and resilient economic data shaped expectations for the trading session ahead.
