Market Retreats From Highs Yet Finishes with Gains; Economic Data Fuels Rally

U.S. equity markets staged a partial pullback from intraday peaks on Thursday, yet managed to secure gains across the board. The selling pressure that emerged in the session’s final hours couldn’t offset the strong momentum built earlier, resulting in all three major benchmarks closing in positive territory and bouncing back from two consecutive down days.

The Dow Jones Industrial Average added 292.81 points, representing a 0.6 percent increase to reach 49,442.44. The Nasdaq Composite expanded by 58.27 points or 0.3 percent, landing at 23,530.02. The S&P 500 advanced 17.87 points or 0.3 percent to close at 6,944.47.

Taiwan Semiconductor Drives Momentum

The market’s early strength drew considerable support from Taiwan Semiconductor Manufacturing Company (TSM), which surged 4.4 percent following its earnings announcement. The chipmaker’s fourth quarter results exceeded expectations, revealing substantial profit increases alongside capital expenditure guidance that surpassed market forecasts. This announcement reignited optimism surrounding the artificial intelligence sector.

“Even with last week’s revenue guidance indicating a record quarter was likely, the specifics remain impressive,” noted Russ Mould, investment director at AJ Bell. “The sheer scale of capital commitments from TSMC demonstrates confidence that AI’s growth trajectory remains intact,” he explained. “The company’s 30% projected growth for 2026 reinforces this conviction.”

Labor Market Data Bolsters Confidence

Additional support materialized from employment figures released by the Labor Department. Initial jobless claims declined to 198,000 for the week ending January 10th, down 9,000 from the prior week’s revised count of 207,000. This decrease surprised analysts, who had anticipated claims would climb to 215,000 from the originally reported 208,000.

Sector Performance

Transportation stocks led gainers, with the NYSE Arca Airline Index jumping 2.6 percent. Semiconductor equities maintained their upward trajectory, as the Philadelphia Semiconductor Index climbed 1.8 percent. Financial institutions, networking companies, and utilities stocks similarly posted solid advances. Conversely, pharmaceutical, energy, and biotechnology sectors experienced declines.

International Markets Mixed

Across the Asia-Pacific region, performance proved uneven. The Nikkei 225 Index fell 0.4 percent while China’s Shanghai Composite declined 0.3 percent. However, South Korea’s Kospi climbed 1.6 percent. European markets displayed similar divergence, with France’s CAC 40 down 0.2 percent, Germany’s DAX up 0.3 percent, and the U.K.'s FTSE 100 gaining 0.5 percent.

Bond Market Pressured

Treasury prices retreated after advancing through the previous two sessions. The benchmark ten-year yield, which moves inversely to bond prices, rose 2.0 basis points to 4.160 percent, reflecting diminished demand for safe-haven assets.