Dow Jones Rises: Chip & Bank Stocks Lead Gains as Oil Falls on Eased Iran Tensions

Major U.S. stock indexes closed higher Thursday after two straight days of declines, while oil prices dropped as President Donald Trump eased threats of military action against Iran. The Dow Jones Industrial Average rose 0.6% nearly 300 points while the Nasdaq and S&P 500 each gained 0.3%.

Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 35% year-over-year profit increase in Q4, sending its U.S.-listed shares up 4.5%. Dutch chip-equipment maker ASML, a key supplier to TSMC, jumped 5.4%. The U.S. and Taiwan also struck a trade deal requiring $250 billion in semiconductor and tech investments in America, with tariffs on Taiwanese goods capped at 15%.

West Texas Intermediate crude futures fell 5% to below $59 a barrel after Trump signaled he may hold off on striking Iran. Meanwhile, the 10-year Treasury yield climbed to 4.17% after weekly jobless claims came in at 198,000, better than expectations of 215,000.

Bank earnings continued to weigh on financials, with JPMorgan Chase sliding 5% over two days and Citigroup, Bank of America, and Wells Fargo also posting declines. In contrast, BlackRock, Morgan Stanley, and Goldman Sachs surged 5.9%, 5.8%, and 4.6% after strong Q4 results.

Nvidia rebounded 2.1% after a prior dip, as the Trump administration imposed new security rules on exports of its H200 AI chips to China. Gold futures slipped 0.6% to $4,610 an ounce after hitting a record high, while silver set a fresh record at $93.75 before easing to $91.75. Bitcoin traded near $95,100, down from a $97,700 high, and the U.S. dollar index rose 0.3% to 99.38.

Record-breaking results from Taiwan Semiconductor Manufacturing Co. (TSMC) ignited a rally in technology shares Thursday, reinforcing investor confidence in the AI trade. The chipmaker posted quarterly profit of NT$505 billion ($16 billion) and revenue topping NT$1 trillion ($33.1 billion), both surpassing Wall Street forecasts. Its U.S.-listed shares climbed more than 5% in late trading.

The strong earnings underscored Wall Street’s appetite for proof of AI-driven expansion. Applied Materials and KLA Corp. surged 7% and 8%, respectively, after TSMC projected a 25% boost in spending on equipment and infrastructure this year. That outlook also lifted chip designers Nvidia, AMD, and Broadcom, signaling robust demand for AI hardware.

Investor sentiment toward AI has evolved. Where enthusiasm once centered on ambitious promises, markets now demand evidence of real financial returns. TSMC’s results provided that validation, suggesting the AI rally still has momentum backed by tangible earnings power.

The question of whether U.S. stocks can deliver another year of double-digit returns is dividing analysts. After a decade of strong gains fueled by a robust dollar and valuation expansion, some warn the S&P 500’s winning streak may falter especially if major rate cuts don’t materialize. Yet others argue the index still has room to run.

The driving force, according to Lori Calvasina of RBC Capital Markets, is corporate earnings growth. She projects the S&P 500 could reach 7,750 over the next 12 months, an increase of just over 11% from current levels. That outlook aligns with consensus expectations for earnings expansion, suggesting the market’s strength will be grounded in fundamentals rather than multiple expansion.

Calvasina emphasized that investors shouldn’t expect valuation multiples to rise or fall dramatically. Instead, she believes the market’s gains will be “earned” through solid earnings performance, reinforcing the idea that profits not policy shifts will determine whether stocks continue their upward trajectory in 2026.

The opening weeks of 2026 have been rough for major software names. Intuit, ServiceNow, Adobe, and Salesforce rank among the steepest losers in the S&P 500 so far this year. Intuit shares have dropped more than 15%, while ServiceNow, Adobe, and Salesforce are down about 14%, 13%, and 12%, respectively.

In sharp contrast, Sandisk has surged nearly 70% in just two weeks, pacing the benchmark index and highlighting the divergence between struggling software firms and booming data-storage stocks.

President Donald Trump’s persistent criticism of high interest rates has intensified into a direct clash with the Federal Reserve. Fed Chair Jerome Powell revealed that the Justice Department opened a criminal probe into whether he misled Congress about renovation costs at Fed headquarters, calling the investigation politically motivated and linked to the central bank’s refusal to follow Trump’s preferences on rate cuts.

The administration continues pressing the Fed to slash borrowing costs more aggressively, but policymakers remain cautious. While rates were trimmed last year to support a slowing labor market, officials worry that deeper cuts could reignite inflation. Analysts expect some easing in 2026, though not at the pace Trump demands.

Markets have shown limited reaction to the investigation, with inflation expectations edging higher but not spiking. That muted response has unsettled some observers. Former Fed Chair and Treasury Secretary Janet Yellen told CNBC she was “surprised the market isn’t more concerned,” highlighting the risks of political interference in monetary policy.

The S&P 500 is enjoying gains today, but health care names are lagging behind. The sector slipped 1.1% in recent trading even as the broader benchmark rose 0.7%.

Eli Lilly and Boston Scientific were the biggest drags, falling about 5% and 4.5%, respectively, making them the top decliners in the S&P 500 Thursday. Lilly’s drop followed a Reuters report that the FDA delayed its decision on the company’s weight-loss pill. Boston Scientific shares slid after announcing a $14.5 billion acquisition of medical-device maker Penumbra.

Many Americans struggled with money choices last year, from splurging on items they couldn’t afford to neglecting retirement savings. A Credit Karma survey of more than 1,000 people revealed the most common regrets: not saving enough (38%), impulse spending (28%), failing to save for retirement (14%), and overspending due to social or relationship pressure (14%).

Impulse buying, peer pressure, and skipped retirement contributions were the biggest pitfalls. As 2026 begins, financial experts stress the importance of building consistent savings habits, resisting unnecessary purchases, and prioritizing long-term retirement planning to avoid repeating these mistakes.

Semiconductor shares rallied Thursday after Taiwan Semiconductor Manufacturing Co. (TSMC) posted stronger-than-expected results, reinforcing confidence in rising AI hardware demand. The world’s largest contract chipmaker reported record fourth-quarter revenue of NT$1.05 trillion ($33.73 billion) and profits of $3.14 per ADR, both surpassing Wall Street forecasts.

TSMC’s U.S.-listed shares jumped more than 6% to a record high, while supplier ASML gained 6%. The upbeat results also lifted Nvidia, AMD, Micron Technology, and Broadcom, underscoring investor optimism that AI-driven growth continues to fuel momentum across the semiconductor sector.

Expectations for Federal Reserve rate cuts this year are fading as economists point to resilient economic data. J.P. Morgan Chief Economist Michael Feroli is among those forecasting no cuts in 2026, arguing that strong GDP growth and retail sales suggest current rates aren’t overly restrictive.

Jerome Powell’s term as Fed Chair ends in May, though he may remain as a governor. Feroli told CNBC that the case for near-term easing is “pretty weak,” citing robust consumer spending as evidence. His outlook contrasts with market participants, who are still pricing in two quarter-point cuts according to CME Group’s FedWatch tool.

Vail Resorts (MTN) stock dropped nearly 4% in premarket trading Thursday after reporting a steep 20% year-over-year decline in skier visits across its North American resorts through Jan. 4. The company also noted dining revenue fell 15.9%, ski school revenue dropped 14.9%, and lift revenue slipped 1.8%.

CEO Rob Katz attributed the downturn to one of the worst early-season snowfalls in the western U.S. in more than three decades. Snowfall at its western resorts was about 50% below the 30-year average, while the Rockies saw nearly 60% less snow than usual. Katz said full-year Resort Reported EBITDA is now expected to come in just below the low end of prior guidance of $842 million to $898 million.

Vail Resorts shares have already lost close to 25% of their value over the past year, underscoring the financial strain from poor weather conditions and reduced guest spending.

The Federal Reserve’s Beige Book released Wednesday paints a stark picture of economic divergence. While high-income Americans are spending freely on luxury goods, travel, and experiences, lower- and middle-income households are tightening budgets switching to generics, reducing protein consumption, and scaling back on trips.

Covering data from mid-November through early January, the report shows overall economic activity improved in December compared to November, but inflation remained stubbornly high and hiring stayed sluggish. Rising costs continue to squeeze lower-income consumers whose wages aren’t keeping pace with price increases.

Fed officials noted that spending strength was concentrated among wealthier households, with retail establishments serving higher-end customers reporting increased sales. In contrast, price sensitivity among lower-income groups is limiting demand for nonessential goods and services, underscoring the uneven impact of inflation across income brackets.

Venezuela sits on 303 billion barrels of proven oil reserves more than Saudi Arabia and nearly 17% of the global total. Yet its daily output has collapsed to under 1 million barrels, less than 1% of global supply and far below the 3.5 million barrels it pumped in the late 1990s and early 2000s.

The decline stems from years of political mismanagement, international sanctions, and the technical challenges of extracting Venezuela’s extra-heavy crude, which is closer to asphalt than gasoline. Production has fallen more than 70% since its peak, underscoring that vast reserves don’t automatically translate into market-ready supply.

The Dow Jones and other major indexes rebounded after two days of losses, powered by strong chip and bank stocks. TSMC’s record earnings and a new U.S.-Taiwan trade deal fueled semiconductor gains, while financials showed mixed results with JPMorgan sliding but Goldman Sachs and Morgan Stanley rallying. Oil prices dropped as Trump eased Iran tensions, Treasury yields ticked higher on strong jobless claims data, and commodities like gold and silver pulled back from records. Overall, the session highlighted tech strength, geopolitical relief in energy, and selective resilience in financials.