Wall Street's main indexes rose Thursday, boosted by a strong quarterly update from TSMC that reinforced investor optimism around AI and extended a rally in chip stocks.

TSMC, the world's biggest producer of advanced chips, raised its full-year revenue forecast on a bullish outlook for spending on artificial intelligence.

U.S.-listed shares of the company fell 1.1% in choppy trading after rising more than 2% before the opening bell.

Shares of some major U.S. chipmakers also advanced, building on gains from Wednesday when ASML's solid quarterly results and a $40 billion data center deal by BlackRock and a Nvidia-backed group fueled optimism around AI.

Nvidia rose 1.2%, Micron Technology added 2.7% and Broadcom gained 1.3%. The S&P 500 tech sector rose 0.5%.

"AI, the demand and the euphoria around it has been fueled by the megacap and the hyperscaler spending for it," said Joe Mazzola, head trading & derivative strategist at Charles Schwab.

"Now we're in kind of that second season ... where investors are maybe moving away just from investing in the chip makers and the hyperscalers and looking for some adjacent plays."

The AI-driven momentum and optimism around U.S. rate cuts have helped markets in recent months. AI-related tech stocks were among the biggest boosts to markets this week.

Robust earnings from major U.S. banks also grabbed attention this week, offering fresh signs of economic resilience at a time when official macroeconomic reports remain delayed due to an ongoing government shutdown.

At 10:40 a.m. EST, the Dow Jones Industrial Average rose 21 points, or 0.05%, to 46,513, the S&P 500 gained 13.25 points, or 0.20%, to 6,728.25, and the Nasdaq Composite gained 140.25 points, or 0.56%, to 22,837.88.

The S&P 500 communication services advanced 0.7%, while financials declined 0.9%.

Meanwhile, China accused the U.S. of stoking panic over its rare earth controls and rejected a White House call to roll back the curbs.

Top U.S. officials on Wednesday blasted China's major expansion of rare earth export controls as a threat to global supply chains, stressing that Washington did not want to escalate the conflict.

President Donald Trump's threat to cancel the U.S.-China meet and impose an additional 100% tariffs on Chinese goods capped investors' risk appetite last week.

U.S. Treasury Secretary Scott Bessent emphasized that Trump is ready to meet Chinese President Xi Jinping in South Korea later this month.

Data showed the Philadelphia Fed Business index for October declined 12.8, compared with a rise of 8.5 estimated by the economists polled by Reuters.

Fed Governor Christopher Waller said he supported an additional interest rate cut in October due to mixed readings on the state of the job market.

Among other moves, Salesforce rose 7.1% as the company said it expects revenue of more than $60 billion in 2030, above Wall Street estimates.

Hewlett Packard Enterprise slumped 8.6% after it forecast annual profit and revenue below Wall Street expectations.

J.B. Hunt shares jumped 17.7% after a higher third-quarter profit.

Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE and by a 1.17-to-1 ratio on the Nasdaq.

The S&P 500 posted 27 new 52-week highs and five new lows, while the Nasdaq Composite recorded 85 new highs and 33 new lows.