Wall Street's major indexes opened higher on Thursday, with semiconductor stocks leading the charge following Taiwan Semiconductor Manufacturing Company's (TSMC) impressive quarterly results. The strong performance from the world's largest contract chipmaker sparked a broader rally across the technology sector, lifting market sentiment at the start of trading.

Market Performance at Opening

The three main US indexes showed positive momentum at the market open, with technology stocks driving the gains:

The Nasdaq Composite demonstrated the strongest performance among the three indexes, reflecting investor enthusiasm for technology and semiconductor stocks following TSMC's blockbuster quarterly results.

Semiconductor Sector Rally

TSMC's strong quarterly performance served as a catalyst for the broader semiconductor sector, with chipmakers experiencing significant gains at the market open. The Taiwan-based company's results provided positive signals about demand in the semiconductor industry, boosting investor confidence across related stocks. This sector-wide rally contributed substantially to the technology-heavy Nasdaq's outperformance compared to other major indexes.

Banking Sector Earnings

Investors also processed earnings reports from two major financial institutions, Morgan Stanley and Goldman Sachs, which marked the conclusion of the big banks' reporting season. The market's reaction to these financial results, combined with the semiconductor rally, shaped the overall trading sentiment at the opening bell. The completion of major bank earnings provided investors with a comprehensive view of the financial sector's recent performance.

Market Outlook

The positive opening reflected investor optimism driven by strong corporate earnings, particularly in the technology sector. TSMC's results highlighted the continued strength in semiconductor demand, while the conclusion of bank earnings season provided clarity on financial sector performance. The divergent performance among the three major indexes, with the Nasdaq significantly outpacing the Dow and S&P 500, underscored the market's focus on technology and growth stocks.

Indian investors looking to deepen their exposure to global markets in 2026 face a critical strategic decision: whether to invest broadly through ETFs or selectively through individual stocks. According to Tarun Singh, Founder and MD of Highbrow Securities, the current environment of geopolitical uncertainty, market volatility, and a strong US equity rally calls for a measured, layered investment approach.

Singh advocates against making binary decisions between exiting or aggressively chasing US stocks. Instead, he recommends Indian investors first build a stable core through low-cost US ETFs, then selectively add high-conviction stock or sector bets to enhance returns. This strategy balances diversification with opportunity, allowing investors to participate in long-term US growth themes like AI and innovation while managing risk more effectively.

Market Outlook and Performance Targets

Despite recent market gains, analysts remain optimistic about US market prospects for 2026. The S&P 500 is projected to reach around 7,600, driven by ongoing growth in artificial intelligence and strong company earnings. US markets started 2026 positively, with the Dow jumping 1,500 points, helping maintain momentum across most sectors.

Geopolitical Considerations and Sector Impact

Potential geopolitical developments, including possible US military operations in regions like Venezuela, could create short-term market volatility. Such operations might impact markets through:

• Changes in oil prices and investor flight to safer assets like the US dollar
• Limited overall effect due to Venezuela's modest 1.00% share of global oil supply
• Potential benefits for defense companies like Lockheed Martin and RTX through increased military spending expectations
• Mixed impact on energy companies, with refiners potentially benefiting from cheaper oil while producers face price pressure

Investment Strategy Recommendations

For 2026, Singh recommends adding to US portfolios on a selective basis rather than complete withdrawal. The approach should involve:

ETF Foundation Strategy:

• Broad US ETFs like VOO (S&P 500 tracker) offer low-cost diversification
• Sector-specific ETFs provide targeted exposure with fees under 0.10%
• Proven track record and minimal management requirements

Selective Stock Additions:

• Individual stocks like Nvidia in AI sector for higher return potential
• Requires active management and clear investment thesis
• Suitable for investors with global market understanding

Optimal Portfolio Construction

For Indian professionals with global market understanding, the recommended approach involves using ETFs as the main foundation while adding targeted stock picks to boost performance. This strategy allows investors to:

• Maintain stable core exposure through diversified ETFs
• Enhance returns through selective high-conviction positions
• Manage risk effectively during uncertain market conditions
• Participate in long-term growth themes while maintaining flexibility

The strategy emphasizes taking selective profits in overvalued areas while building positions carefully, supported by solid market fundamentals and favorable policy environment. Rather than complete portfolio restructuring, the focus remains on strategic enhancement through measured additions and tactical adjustments.