Market Volatility Continues as Investors Weigh Earnings and Economic Data
The US stock market experienced a rollercoaster ride on Thursday, with major indexes struggling to maintain momentum following the previous day’s surge. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all hovered around the flatline in early trading, as investors digested a fresh batch of earnings reports and economic data.
Earnings Season Heats Up
Bank of America’s fourth-quarter profit more than doubled, driven by a resurgence in Wall Street dealmaking. The bank’s shares edged higher in early trading. Morgan Stanley also reported a surge in quarterly profit, sending its stock upward. However, UnitedHealth’s fourth-quarter revenue fell short of estimates, weighed down by weakness in its health insurance unit, causing its stock to slide.
Retail Sales Disappoint
Retail sales for December grew by 0.4%, missing expectations of 0.6%. The monthly gain slowed from November’s 0.7% increase. Weekly jobless claims rose more than expected to 217,000, versus the prior week’s upwardly revised 203,000.
Taiwan Semiconductor Boosts AI Hardware Demand
Taiwan Semiconductor Manufacturing Co. reported a 57% rise in net profit, hitting a quarterly record. The chip supplier’s upbeat sales outlook boosted optimism for AI hardware demand this year, sending its shares up over 5%. Nvidia stock also gained 1% on the news.
Federal Reserve Rate Cut Expectations
Traders have increased bets that the Federal Reserve will lower rates before July, reversing the previous trend sparked by the stronger-than-expected December jobs report. Goldman Sachs analysts now forecast two 25bp cuts this year in June and December, followed by another cut in June 2026.
Market Performance
The S&P 500 rose more than 0.1%, while the Nasdaq Composite increased about 0.3%. The Dow Jones Industrial Average hovered near the flatline. Investors remain cautious, seeking a continuation of Thursday’s performance when stocks rallied on the back of better-than-expected inflation data and strong quarterly bank earnings.
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