Stocks rebounded Thursday, snapping two consecutive days of losses, as semiconductor and financial sector names bounced off their losses from earlier in the week.
The Dow Jones Industrial Average (NYSE: DIA) rallied nearly 300 points to end the session at 49,442.44 on Thursday, while the broader market S&P 500 Index (NYSE: SPY) rose about 0.3% to settle at 6,944.47. The tech-heavy Nasdaq Composite (NASDAQ: QQQ) also added 0.25% to close at 23,530.02.
Boosting the semiconductor sector, Taiwan Semiconductor Manufacturing (NYSE: TSM) delivered a record fourth-quarter earnings on Thursday and said it expects to increase capital spending this year to between $52 billion and $56 billion -- signaling increased confidence in artificial intelligence datacenter demand. TSMC is a major supplier for Nvidia (NASDAQ: NVDA) and Apple (NASDAQ: AAPL).
"Our conviction in the multiyear AI mega-trend remains strong, and we believe the demand for semiconductor[s] will continue to be very fundamental," said CEO C.C. Wei in a statement, assuaging some concerns over a potential AI bubble.
Nvidia shares also rose on Thursday after President Donald Trump said late Wednesday that his administration will approve sale of its H200 chip in China, but will require the federal government to take 25% of sales. Trump said in remarks that the H200's performance is already exceeded by two generations of Nvidia production chips, highlighting the company's Blackwell and Rubin AI semiconductors.
Adding to that momentum, RBC Capital Markets analyst Srini Pajjuri initiated coverage on Nvidia to Outperform, citing the unprecedented increase in AI spending from hyperscalers. The analyst's price target of $240 also implies a more than 31% potential upside from Nvidia's close on Wednesday.
"We expect any hyperscaler capex spending slowdown to be gradual and believe that valuation is already discounting a potential slowdown to an extent (5-yr avg P/E 50x prior to AI boom vs current 24x). We see limited threat to NVDA's full-stack AI dominance despite the recent progress by ASICs/AMD. Next-gen Rubin system is in production which should help sustain the performance lead while Groq acquisition offers roadmap optionality," Pajjuri wrote in a Wednesday note to clients.
"We have higher conviction in NVDA's order book vs that of peers, and view the balance sheet strength as an added advantage given the tight supply chain," he added.
Financial heavyweights were also making headlines on Thursday, with Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and BlackRock (NYSE: BLK) each delivering better-than-expected quarterly earnings. Goldman said its fourth-quarter profit was driven by its equities trading, asset and wealth management business raking in nearly $900 million more in revenue than expected. Morgan Stanley also saw strong revenue gains from its wealth management business, benefitting from "multi-year investments," according to CEO Ted Pick.
Moreover, BlackRock posted a record $14 trillion of assets under management in its fourth quarter, with its exchange-traded fund business now having $5.5 trillion in assets overall.
"Around the world, clients are looking to do more across BlackRock," CEO Larry Fink said in a statement. "Our pipeline of business has broadened across products and regions, spanning public and private markets mandates, technology and data, and client channels."