US stocks open in the green: S&P 500 climbs 0.3%, Nasdaq up 0.5%

• Semiconductor stocks rallied following strong Q4 earnings from Taiwan Semiconductor and a $250 billion US-Taiwan trade agreement committing to expanded chip production capacity domestically
• Industrial leaders IBM and Honeywell rose 1.9% and 1.6% respectively, while Tesla gained over 1%, reflecting investor interest in automation and AI-driven sectors
• Morgan Stanley warned that AI adoption may proceed slower than expected and noted headwinds from elevated credit levels and affordability pressures that could limit consumer spending gains

Market Summary

Market Performance:

US stocks opened higher on Friday, January 16, 2026, attempting to close a volatile week positively. The S&P 500 gained 0.3%, the Dow Jones added approximately 100 points (0.2%), and the Nasdaq Composite outperformed with a 0.5% advance. Weekly performance remained mixed, with the S&P 500 near breakeven, the Nasdaq tracking a 0.2% decline, and the Dow posting a modest 0.1% weekly gain.

Sector Leadership:

Technology and industrial sectors drove gains. Tesla rose over 1%, supporting the Nasdaq's rally. Industrial leaders IBM and Honeywell gained 1.9% and 1.6% respectively, reflecting investor interest in automation and digital infrastructure beneficiaries.

Semiconductor Catalyst:

Semiconductor stocks surged Thursday following Taiwan Semiconductor Manufacturing's (TSMC) strong Q4 earnings, reinforcing confidence in AI-driven chip demand. A US-Taiwan trade agreement added momentum, with Taiwanese tech companies committing at least $250 billion in US production capacity investments—viewed as positive for domestic supply chains and long-term semiconductor growth.

Market Headwinds:

Volatility persisted throughout the week due to Washington-driven uncertainty, including geopolitical tensions involving Iran and Greenland, and concerns over Federal Reserve independence. These factors weighed on sentiment despite resilient corporate earnings and AI enthusiasm.

Forward Outlook:

Morgan Stanley Wealth Management cited earnings strength as a potential upside driver, noting robust expectations for productivity gains and margin expansion. However, analysts cautioned that AI adoption may proceed slower than anticipated, consumer spending could face pressure from elevated credit levels, and the Federal Reserve may pivot toward accommodating balance sheet growth rather than rate cuts in 2026.