Stocks gained on Thursday after chip manufacturer TSMC’s latest results reassured investors that the AI cycle is accelerating, and bank earnings came in strong.

The Dow Jones Industrial Average (^DJI) led the gains with Industrials, Materials, and Energy as the outperforming sectors. The S&P 500 (^GSPC) also rose almost 0.3%.

The tech-heavy Nasdaq Composite (^IXIC) increased nearly 0.3% as several semiconductor stocks jumped following TSMC’s latest quarterly results.

Bank earnings from Goldman Sachs (GS) and Morgan Stanley (MS) came in strong, sending the sector higher.

The metals complex took a breather on Thursday following a monster rally. Meanwhile, oil prices fell 4% as the threat of US military action against Iran eased following President Trump’s latest remarks over how Tehran is handling anti-government protests.

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Oil prices fell 4% on Thursday as the threat of US military action against Iran eased following President Trump’s latest remarks over how Tehran is handling anti-government protests.

International pricing benchmark Brent crude (BZ=F) settled at $63.79 per barrel, while West Texas Intermediate (CL=F) dropped to $59.19 per barrel.

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Transition investing — investments in sectors crucial to the AI revolution — is the “perfect” hedge for investors worried that the AI boom might be a bubble, according to equity strategists at Bank of America.

Fears that AI — which BofA called a “fundamental revolution that is about to change everything” — are falling, the strategists wrote. However, “concentrated capital in AI-linked names heightens vulnerability to factor drawdowns, policy shifts, rate shocks, and power-supply constraints.”

Transition investing, BofA said, offers “a way to invest in AI, without investing directly with AI.”

The investment strategy centers around sectors such as transition metals and defense that, while systemically important to the AI buildout, remain strong on their own under growing demand dynamics.

On the infrastructure side of the AI boom, power generation and the industrial metals — copper, aluminum, silver, and others — needed to construct and provide electricity to the growing array of data centers make investments in those sectors strong directional bets on AI, BofA said.

Security resilience, powered by the defense sector, is also seeing growing demand as nations expand their defense budgets and more attention is paid to next-generation combat systems, the strategists said.

“Transition strategies like defense, infrastructure, and transition metals are all critical to the AI revolution,” the strategists wrote. “However, share prices in these sectors offer relative resilience against AI-driven swings, anchored by policy, geopolitics, and supply chain fundamentals.”

BofA also noted that the defense, infrastructure, and transition metals sectors have maintained a market correlation to AI of less than 50%.

Some of BofA’s recommended equities include BAE Systems (BAESF), Vulcan Materials (VMC), Tencent Holdings (TCEHY), Elm Company (7203.SR), CMOC Group (3993.HK), and HD Hyundai Electric (267260.KS).

Moody’s analysts published a report on Thursday about what would occur in the event of an AI bubble bursting. Though the credit rating agency said it’s unclear whether the market is in a bubble, analysts wrote that if a hypothetical burst occurs and AI-related companies lose 40% of their value, it would have “far-ranging credit consequences.”

“An equity downturn would erode household wealth, weakening the credit quality of companies in sectors providing nonessential goods and services,” analysts said.

“Private credit, an emerging source of AI financing, would also come under pressure, while the ripple effects could extend to pension funds, insurers, and banks, particularly regional lenders with exposure to tech-related real estate.”

The analysts said a market drawdown could be spurred by a failure for companies to create meaningful productivity gains from AI, a miss by an AI bellwether such as Nvidia, or a broader economic slowdown. They noted that such a downturn would slow AI adoption but not halt it.

Moody’s said Big Tech firms such as Microsoft (MSFT) and Alphabet (GOOG, GOOGL) would see limited impacts due to their diversified business models and creditworthiness.

Chip stocks jumped in early trading on Thursday as Nvidia’s (NVDA) chip manufacturer TSMC (TSM) gave financial forecasts that signaled strong demand for AI and its CEO dismissed bubble fears.

“Our conviction in the multiyear AI megatrend remains strong, and we believe the demand for semiconductor[s] will continue to be very fundamental,” said C.C. Wei.

Nvidia stock rose 3% to erase the previous day’s loss, while rival chipmakers AMD (AMD) and Broadcom (AVGO) shares jumped 3% and 2%, respectively. Shares in Micron (MU), which supplies memory for Nvidia’s AI systems, as well as those in chip architecture designer Arm (ARM) advanced more than 3%.

Read about TSMC’s results and Wei’s commentary on the AI market here.

Shares in financial services giant State Street (STT) rallied Thursday morning, picking up more than 1% on news that the firm is readying a collection of cryptocurrency and tokenized products for its clients.

The bank will shortly begin offering money market, ETF, and cash products, including tokenized deposits and stablecoins, according to Bloomberg.

The move comes as State Street recently began working with the digital assets strategy hedge fund Galaxy Digital to launch a tokenized private liquidity fund for client investments.

State Street also joins a growing cohort of financial institutions offering crypto exposure or crypto-related products to clients. BNY Mellon (BK) has launched a tokenized deposit service, and asset managers, including JPMorgan Chase (JPM) and Fidelity Investments, have launched tokenized money market funds, Bloomberg reported.

Salesforce (CRM) has seen its shares shed 10% since the beginning of the year as the company has attempted to fight off investor fears that AI will cut into the industry-leading CRM provider and other software giants.

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US stocks opened higher on Thursday as investors rallied for a recovery from back-to-back losses on a strong outlook from chip giant TSMC, signaling strength for the AI trade.

The tech-heavy Nasdaq Composite (^IXIC) picked up around 0.8% to lead the way higher, while the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) gained 0.7% and 0.3%, respectively, following a second straight day of losses for the Wall Street indexes.

In commodities, oil prices on Brent crude and West Texas Intermediate crude fell by roughly 4% each through Thursday morning as Trump signaled a slowdown on potential military action in Iran. President Trump said Wednesday that he had been assured security forces would stop killing protesters.

Moving in tandem with oil, store-of-value leaders gold (GC=F) and silver (SI=F) also fell on a cooling geopolitical environment and an announcement from the White House that President Trump will not be implementing tariffs on critical mineral imports.

Rare earth and critical minerals stocks traded on mixed footing in premarket trading on Thursday morning after President Trump said he would seek to negotiate trade agreements with foreign nations on the minerals instead of imposing tariffs.

Shares in USA Rare Earth (USAR) and MP Materials (MP) fell by roughly 3% and 1.8%, while shares in Lithium Americas Corp. (LAC) shed 0.5%. Trilogy Metals Inc. (TMQ), which operates mining sites in Alaska, rallied by 3.2%.

In a proclamation Wednesday night, President Trump said the Department of Commerce and the Office of the US Trade Representative shall “jointly pursue negotiation of agreements … to address the threatened impairment of the national security with respect to imports of [processed critical minerals and derivative products] from any country.”

The president also said Secretary of Commerce Howard Lutnick and Trade Representative Jameson Greer should consider implementing price floors for trading in critical minerals, alongside other restrictive measures.

While holding off on implementing a tariff scheme in the meantime, Trump noted that “it may be appropriate to impose import restrictions, such as tariffs, if satisfactory agreements are not reached in a timely manner.”

The US, Trump said, was “100 percent net-import reliant for 12 critical minerals, and 50 percent or greater net-import reliant for a further 29 critical minerals” in 2024.” And even where the US does have mining capacity for certain minerals, the country, “lacks the domestic processing capacity to avoid downstream net-import reliance.”

The Department of Defense has taken equity stakes in both MP Materials and Trilogy Metals, while the Department of Energy has invested in Lithium Americas.

US weekly jobless claims unexpectedly fell last week to their lowest level since November, as seasonal volatility seemingly continued to grip the labor market measure.

Jobless claims have remained volatile on a week-to-week basis since the Thanksgiving holiday — and really since the end of the government shutdown.

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Goldman Sachs (GS) vaulted past its own equity trading revenue highs, setting a new Wall Street record and far exceeding expectations in its fourth quarter earnings.

The global investment bank’s equity trading desk posted revenue of $4.31 billion for the fourth quarter, coming in 25% higher than the same quarter last year and breaking the bank’s own record set in the second quarter of 2025.

Analysts had expected $3.65 billion in equity trading revenues, according to Bloomberg consensus estimates. Shares in Goldman Sachs initially jumped by around 1% in premarket trading before reversing around 1.7%.

Elsewhere at Goldman Sachs, led by CEO David Solomon, the bank’s fixed income, currencies, and commodities trading desk posted revenue of $3.11 billion, up 12.5% from a year ago and exceeding analyst expectations.

Investment banking fees rose 25% from a year ago to $2.58 billion but missed analyst expectations of $2.66 billion, according to Reuters.

Intel (INTC) got its second upgrade this week on Thursday as Citi (C) analysts raised their rating on the stock to Neutral from Sell.

Analyst Atif Malik said that supply tightness in TSMC’s (TSM) packaging business would be a tailwind for the US chipmaker.

Packaging refers to when a finished chip is wired up and placed into a protective shell so it can be used in computers and electronics. Intel’s advanced packaging business has recently attracted interest from Big Tech hyperscalers for their custom AI chips, KeyBanc analyst John Vinh said this week in his own note upgrading Intel shares.

Citi’s Malik also said he believes Intel will get front-end foundry customers as yields on its 18A-P and 14A manufacturing processes improve. In other words, he thinks companies will eventually, actually pay Intel to manufacture their chips rather than just package them, which is far more lucrative.

Meanwhile, Intel got a nod from its revered competitor, TSMC, which leads the chip manufacturing industry and produces leading edge chips for Nvidia.

Asked whether the US government investment in Intel and the chipmaker’s partnership with Nvidia was a competitive concern for TSMC, CEO C.C. Wei said he wasn’t worried during a call with analysts early Thursday morning.

But, he said: “We have a competitor — no doubt about it — that’s a formidable competitor.”

“But first, it takes time; two, we don’t underestimate their progress.”

Such acknowledgement from industry leader TSMC indicates how far Intel’s struggling manufacturing business has come, as the company’s turnaround is still questioned by many on Wall Street. The stock rose fractionally Thursday and is up 154% over the past year.

Penumbra (PEN) stock rose 13% before the bell following the news that Boston Scientific (BSX) would purchase the medical device company for $14.5 billion in order to expand its vascular pipeline.

Boston Scientific (BSX) shares fell 2% following the announcement.

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