Thursday offered markets a rare respite from nonstop geopolitical upheaval. Yet the week's headlines still reflected larger global dynamics.
Case in point: Taiwan's $250 billion investment in chip production in the U.S., which is as much a strategic move as a commercial one. The agreement will see the U.S. lower tariffs on Taiwanese imports to 15% from 20% and remove them altogether on other products, such as generic pharmaceuticals and aircraft components.
Taiwan Semiconductor Manufacturing Co. has already purchased land and could expand in Arizona as part of this deal, Commerce Secretary Howard Lutnick told CNBC's Brian Sullivan in an interview Thursday. The firm is also considering additional investments in the U.S. beyond current plans, TSMC Chief Financial Officer Wendell Huang told CNBC's Emily Tan on Thursday.
The world's leading contract chipmaker also announced blowout earnings on Thursday. TSMC also said it's raising its expected capital expenditure for 2026, indicating that demand for artificial intelligence remains high this year.
This wave of optimism helped power stock markets higher. Semiconductor and AI-related stocks such as Nvidia , Advanced Micro Devices and Applied Materials advanced in the U.S., while European producers of chip-making equipment, such as ASML and ASM International , also climbed.
In Europe, stocks are poised to end the week on a record high. A rally in technology shares has lifted the sector to levels not seen since 2000, while fresh data showing Germany's economy expanding in 2025 for the first time in two years also boosted sentiment.
Oil prices, meanwhile, slid after U.S. President Donald Trump said he could hold off on attacking Iran, easing a major source of near-term risk.
But tensions remain elsewhere. Several NATO nations announced they've deployed troops to Greenland as part of a joint exercise to bolster Arctic security. These movements follow strained transatlantic discussions over U.S. proposals to acquire the semi-autonomous Danish territory — a suggestion that has unsettled European partners and raised fundamental questions about the alliance.
— CNBC's Kif Leswing and Leonie Kidd contributed to this report.