March Nasdaq 100 E-Mini futures (NQH26) are trending up +0.59% this morning, signaling that a tech rally fueled by strong earnings from Taiwan Semiconductor Manufacturing Co., which revived optimism around AI, looks set to continue.
Also aiding sentiment, shares of memory chipmakers rallied in pre-market trading, led by a more than +6% gain in Micron Technology (MU) after the company disclosed in a regulatory filing that director Teyin Liu bought about $7.8 million worth of shares this week. SanDisk (SNDK) climbed over +5% and Western Digital (WDC) rose more than +4%.
In yesterday’s trading session, Wall Street’s major indices ended in the green. U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) climbed over +4% after the world’s biggest contract chipmaker posted a record Q4 profit, projected faster-than-expected 2026 revenue growth, and provided blockbuster capital expenditure guidance for this year. Also, chip stocks rallied following TSMC’s results and guidance, with KLA Corp. (KLAC) jumping more than +7% to lead gainers in the S&P 500 and Nasdaq 100, and Applied Materials (AMAT) rising over +5%. In addition, BlackRock (BLK) advanced more than +5% after the world’s largest asset manager reported stronger-than-expected Q4 results. On the bearish side, Coinbase Global (COIN) slumped over -6% after the Senate Banking Committee delayed a hearing on a key cryptocurrency bill on Wednesday following Coinbase’s withdrawal of support.
The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week unexpectedly fell by -9K to a 6-week low of 198K, compared with the 215K expected. Also, the U.S. Philly Fed manufacturing index rose to a 4-month high of 12.6 in January, stronger than expectations of -1.6. In addition, the U.S. January Empire State manufacturing index rose to 7.70, stronger than expectations of 0.80. Finally, the U.S. import price index unexpectedly rose +0.4% m/m in November, stronger than expectations of -0.1% m/m.
“If earnings continue to beat expectations and economic data remains supportive, the likely path remains advance, backfill, then advance again,” said Kenny Polcari at SlateStone Wealth.
Chicago Fed President Austan Goolsbee said on Thursday that the central bank’s primary focus should be curbing inflation, as the labor market shows signs of stabilizing. “We’ve been five years fighting to get inflation on a path back to 2% and we made some progress, but we need that, and if we get that, I think rates can come down,” Goolsbee said. Also, Atlanta Fed President Raphael Bostic said, “We need to make sure that we stay in a restrictive stance, because inflation is still too high, and those high prices are weighing on so many Americans.” In addition, Kansas City Fed President Jeff Schmid said interest rates should remain at levels that continue to exert some pressure on the economy, allowing inflation to cool further. Finally, San Francisco Fed President Mary Daly said she believes monetary policy is “in a good place” as risks to both sides of the central bank’s dual mandate remain.
Meanwhile, U.S. rate futures have priced in a 95.0% probability of no rate change and a 5.0% chance of a 25 basis point rate cut at the January FOMC meeting.
On the trade front, the U.S. and Taiwan reached a long-sought trade deal on Thursday that would cut tariffs on goods from the island to 15% and see Taiwanese semiconductor firms boost investment in U.S. operations by $500 billion.
Today, investors will focus on U.S. Industrial Production and Manufacturing Production data, set to be released in a couple of hours. Economists expect Industrial Production to rise +0.1% m/m and Manufacturing Production to drop -0.2% m/m in December, compared to the November figures of +0.2% m/m and unchanged m/m, respectively.
Market participants will also be anticipating speeches from Boston Fed President Susan Collins, Fed Vice Chair for Supervision Michelle Bowman, and Fed Vice Chair Philip Jefferson.
On the earnings front, notable companies like PNC Financial (PNC), State Street (STT), and M&T Bank (MTB) are slated to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +8.4% increase in quarterly earnings for Q4 compared to the previous year.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.18%, down -0.07%.
The Euro Stoxx 50 Index is down -0.27% this morning, taking a breather after strong gains in the previous session. Mining stocks led the declines on Friday after gold prices retreated as demand for safe-haven assets waned amid fading fears of imminent U.S. military action in Iran. At the same time, defense stocks climbed as concerns mounted across the continent over President Trump’s repeated stance that the U.S. needs Greenland for security reasons. Healthcare stocks also advanced, led by a more than +5% gain in Novo Nordisk (NOVOB.C.DX) after the U.K.’s health regulator approved a higher dose of the company’s Wegovy for obesity patients. Despite Friday’s pullback, the benchmark index is on track to end the week higher. Meanwhile, BlackRock’s Helen Jewell said Europe’s record-setting equity rally still has room to run, citing a solid outlook for corporate earnings and forecasting regional stocks to rise another 8% to 9% this year. On the economic front, final data confirmed on Friday that Germany’s annual inflation rate eased to 1.8% in December, while the Italian annual inflation rate picked up slightly to 1.2% last month. In other corporate news, Kloeckner & Co. SE (KCO.D.DX) jumped over +27% after Worthington Steel agreed to acquire the steel processor in a deal valued at about $2.4 billion.
Germany’s CPI and Italy’s CPI data were released today.
The German December CPI was unchanged m/m and rose +1.8% y/y, in line with expectations.
The Italian December CPI rose +0.2% m/m and +1.2% y/y, in line with expectations.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.26%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.32%.
China’s Shanghai Composite Index closed lower today as the early-year rally lost steam after regulators tightened margin financing rules and pledged to crack down on excessive speculation. China’s securities regulator pledged on Friday to “comprehensively” strengthen market monitoring and “resolutely” prevent sharp fluctuations. Earlier this week, exchanges in Shanghai, Shenzhen, and Beijing said they would raise the minimum margin requirement for new borrowings to 100% from 80%, effective January 19th. In addition, Bloomberg reported that China is eliminating a key advantage enjoyed by high-frequency traders by removing servers dedicated to those firms from local exchanges’ data centers. The move is the latest sign that officials are focused on creating a more level playing field for investors and safeguarding market stability. Non-ferrous metal stocks underperformed on Friday. At the same time, semiconductor stocks climbed, extending yesterday’s gains after TSMC reported a record quarterly profit and provided blockbuster capital expenditure guidance for 2026. The benchmark index notched a weekly loss, snapping a four-week winning streak. Meanwhile, the People’s Bank of China announced on Thursday cuts to certain sector-specific interest rates to give the economy an early boost, and signaled that it has room to cut interest rates and banks’ reserve requirements. Nomura analysts said the measures represent the right approach to tackle rapidly weakening domestic economic momentum and show that Beijing is growing increasingly concerned about domestic growth dynamics. They expect a single round of policy rate and reserve requirement ratio cuts in 2026, likely in the second quarter.
Japan’s Nikkei 225 Stock Index closed lower today as investors continued to lock in profits after a rally fueled by hopes of additional fiscal stimulus. Pharmaceutical and retail stocks led the declines on Friday. Still, the benchmark index posted a strong weekly gain, buoyed by reports that Prime Minister Sanae Takaichi may dissolve parliament this month and call a snap election in February. The Liberal Democratic Party’s secretary general confirmed the reports on Wednesday. Meanwhile, Reuters reported on Friday that some Bank of Japan officials see room to raise interest rates earlier than markets anticipate, with April viewed as a distinct possibility, as a weakening yen risks adding to already broadening inflationary pressures. The yen slid to its weakest level against the dollar since July 2024 this week, following news that Takaichi will call a snap election to shore up her grip on power. The Japanese currency rose 0.3% against the dollar on Friday after Finance Minister Satsuki Katayama said Tokyo would not rule out any options to counter excessive foreign exchange volatility, including coordinated intervention with the U.S. “I have repeatedly stated that we are prepared to take decisive action, including all available options,” Katayama said. In other news, foreign investors snapped up a net 1.14 trillion yen ($7.20 billion) worth of Japanese stocks in the week ended January 10th, marking their largest weekly net purchase since October 25th, according to Ministry of Finance data. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -0.73% to 30.03.
Pre-Market U.S. Stock Movers
Chip stocks are moving higher in pre-market trading, with Advanced Micro Devices (AMD) rising over +2% and Marvell Technology (MRVL) gaining more than +1%.
Micron Technology (MU) climbed over +6% in pre-market trading after the company disclosed in a regulatory filing that director Teyin Liu bought about $7.8 million worth of shares this week.
Honeywell International (HON) rose more than +1% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a price target of $255.
J.B. Hunt Transport Services (JBHT) slid over -4% in pre-market trading after the transportation and logistics company reported weaker-than-expected Q4 revenue.
HP Inc. (HPQ) fell more than -2% in pre-market trading after Barclays downgraded the stock to Underweight from Equal Weight with a price target of $18.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - January 16th
PNC Financial (PNC), State Street (STT), M&T Bank (MTB), Regions Financial (RF), BOK Financial (BOKF).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
