U.S. stock futures edged higher Friday morning as investors prepared to close out a volatile but ultimately positive week on Wall Street. With markets set to be closed Monday for Martin Luther King Jr. Day, traders are positioning for an extended weekend that comes just days before the one-year anniversary of President Trump's second inauguration.

The week has been defined by two dominant themes: surprisingly strong bank earnings and a resurgent semiconductor sector, both of which have helped offset lingering concerns about Federal Reserve policy and geopolitical uncertainty.

Weekly Market Recap

Heading into Friday's session, the major indices were positioned for weekly gains:

  • Dow Jones Industrial Average: Rose 0.6% Thursday to close at 49,403, within striking distance of the 50,000 milestone
  • S&P 500: Added 0.26% Thursday, snapping a two-day losing streak and sitting about 100 points below the 7,000 level
  • Nasdaq Composite: Gained 0.25% as technology stocks found footing after early-week weakness
  • Russell 2000: Extended its winning streak against the S&P 500 to 10 sessions, matching a 35-year record

Bank Earnings Drive Confidence

The week's earnings reports from major financial institutions exceeded expectations broadly, reinforcing confidence in the economy and corporate profit growth:

Goldman Sachs delivered record equities trading revenue, with the investment bank's stock jumping 4.6% on Thursday.

Morgan Stanley reported strong wealth management results, sending shares up 5.8%.

PNC Financial beat estimates Friday morning and projected 11% revenue growth for 2026, pushing shares nearly 3% higher in early trade.

"The banking sector is telling us the economy remains on solid footing. Credit quality is holding up, loan demand is healthy, and capital markets activity is recovering. That's a constructive backdrop for risk assets."

— Equity strategist at a leading Wall Street firm

TSMC Ignites Chip Rally

Taiwan Semiconductor Manufacturing Company's blowout earnings report Thursday sparked a rally across the semiconductor complex that carried into Friday:

  • TSMC: Jumped 4.4% after reporting record revenue and raising 2026 capital spending guidance
  • Nvidia: Rose 2.1% as the AI chip leader benefited from TSMC's bullish demand commentary
  • Applied Materials: Surged 5.6% on equipment demand optimism
  • Broadcom, AMD, Micron: All posted gains exceeding 1%

TSMC's results validated the ongoing demand for AI infrastructure, alleviating concerns that the semiconductor rally might be running out of steam. The company's decision to increase capital expenditures signals confidence in sustained demand growth.

Commodities Mixed

The commodity complex showed divergent moves as traders reassessed geopolitical risks:

Oil: Crude prices fell more than 4% this week as traders reduced the risk premium associated with potential U.S. military action against Iran. President Trump's comments suggesting de-escalation drove the sharpest single-day decline since October.

Silver: Hit fresh record highs above $93 per ounce, continuing its remarkable 2026 rally as investors seek safe-haven assets.

Gold: Retreated slightly from record highs but remained well supported above $4,600.

What's Ahead

Several factors will shape market sentiment as trading resumes Tuesday:

Trump's second inaugural anniversary: January 20 marks one year since the president took office. While markets have generally performed well over the past year, volatility around trade policy and Fed independence has been a consistent theme.

China GDP: Beijing releases fourth-quarter economic data Monday, which could reshape global investor sentiment when markets reopen.

Earnings continue: Netflix reports Tuesday after the bell, followed by United Airlines Wednesday morning. About 35 S&P 500 companies report next week.

Fed blackout begins: Federal Reserve officials enter their pre-meeting quiet period ahead of the January 27-28 FOMC meeting, where rates are expected to remain unchanged.

The Bottom Line

Wall Street heads into the long weekend on a cautiously optimistic note. Bank earnings have exceeded expectations, the semiconductor sector remains supported by AI demand, and small caps are showing signs of sustainable leadership.

However, questions persist about Fed policy trajectory, trade relations, and whether current valuations can be sustained. The S&P 500's inability to breach 7,000 so far suggests some resistance at round numbers, while the Dow's approach to 50,000 could provide the next psychological battleground when markets reopen Tuesday.