Small Caps, Chips Lead Stock Market; JPMorgan, Goldman Delta, Taiwan Semiconductor In Focus: Weekly Review

• Taiwan Semiconductor topped estimates with Q4 EPS up 43% and sales up 28% to $33.73 billion, guiding to $35.2 billion revenue for Q1 (up 36%), lifting AMD, Nvidia, and semiconductor equipment suppliers to record highs
• Major banks showed split results: JPMorgan, Wells Fargo, Citigroup, and Bank of America fell on disappointing earnings, while Goldman Sachs, Morgan Stanley, and BlackRock beat forecasts and hit record highs
• President Trump's proposed 10% cap on credit card interest rates and support for the Credit Card Competition Act triggered sell-offs in American Express, Capital One, Visa, and Mastercard

Weekly Market Summary: Small Caps and Chips Lead Mixed Trading

Market Performance

Major indexes posted narrow losses for the week, though the S&P 500 and Dow Jones hit record highs before retreating. The small-cap Russell 2000 was the clear winner, rising strongly to new highs, while the Nasdaq fell modestly. December core CPI inflation came in lighter than expected at 2.6%, matching March 2021 lows.

Key Earnings Highlights

Taiwan Semiconductor (TSMC): Delivered strong Q4 results with 43% EPS growth and 28% revenue increase to $33.73 billion. Q1 guidance of $35.2 billion (up 36%) boosted semiconductor stocks including AMD, Nvidia, Applied Materials, ASML, and KLA.

Banking Sector: Results were mixed. JPMorgan, Wells Fargo, Citigroup, and Bank of America fell after earnings, though most beat estimates. Goldman Sachs and Morgan Stanley jumped on strong results, hitting record highs.

Delta Air Lines: Q4 EPS fell 16% but topped estimates; revenue rose 1% to $14.61 billion but missed expectations. The carrier announced plans to purchase 30 Boeing 787-10 aircraft with deliveries starting in 2031.

Sector Developments

Healthcare: Biotech and medtech stocks swung on J.P. Morgan Healthcare Conference preannouncements, with Alnylam, Sarepta, and Apellis declining while Beam Therapeutics and BioAge Labs surged. Boston Scientific announced a $14.5 billion acquisition of Penumbra.

Retail: Apparel retailers disappointed. Abercrombie plunged 17% on lowered guidance; American Eagle and Urban Outfitters also declined despite positive holiday sales.

Policy Impact: Trump proposed a 10% credit card interest rate cap, sending American Express and Capital One lower.