diff --git a/src/compiler/diagnosticMessages.json b/src/compiler/diagnosticMessages.json
index a9dd5ddf857f2..9370fb2910a68 100644
--- a/src/compiler/diagnosticMessages.json
+++ b/src/compiler/diagnosticMessages.json
@@ -5614,6 +5614,14 @@
         "category": "Message",
         "code": 6416
     },
+    "Searching all ancestor node_modules directories for preferred extensions: {0}.": {
+        "category": "Message",
+        "code": 6417
+    },
+    "Searching all ancestor node_modules directories for fallback extensions: {0}.": {
+        "category": "Message",
+        "code": 6418
+    },
 
     "The expected type comes from property '{0}' which is declared here on type '{1}'": {
         "category": "Message",
diff --git a/src/compiler/moduleNameResolver.ts b/src/compiler/moduleNameResolver.ts
index 51dd0b76cf25c..a9ce9fd9273a7 100644
--- a/src/compiler/moduleNameResolver.ts
+++ b/src/compiler/moduleNameResolver.ts
@@ -2821,11 +2821,13 @@ function loadModuleFromNearestNodeModulesDirectoryWorker(extensions: Extensions,
     const secondaryExtensions = extensions & ~(Extensions.TypeScript | Extensions.Declaration);
     // (1)
     if (priorityExtensions) {
+        traceIfEnabled(state, Diagnostics.Searching_all_ancestor_node_modules_directories_for_preferred_extensions_Colon_0, formatExtensions(priorityExtensions));
         const result = lookup(priorityExtensions);
         if (result) return result;
     }
     // (2)
     if (secondaryExtensions && !typesScopeOnly) {
+        traceIfEnabled(state, Diagnostics.Searching_all_ancestor_node_modules_directories_for_fallback_extensions_Colon_0, formatExtensions(secondaryExtensions));
         return lookup(secondaryExtensions);
     }
 
diff --git a/tests/baselines/reference/bundlerConditionsExcludesNode.trace.json b/tests/baselines/reference/bundlerConditionsExcludesNode.trace.json
index 2285df0907657..0ee1b27bb10f9 100644
--- a/tests/baselines/reference/bundlerConditionsExcludesNode.trace.json
+++ b/tests/baselines/reference/bundlerConditionsExcludesNode.trace.json
@@ -4,6 +4,7 @@
     "Resolving in CJS mode with conditions 'import', 'types'.",
     "File '/package.json' does not exist.",
     "Loading module 'conditions' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/conditions/package.json'.",
     "Entering conditional exports.",
     "Saw non-matching condition 'node'.",
@@ -20,61 +21,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=false).trace.json b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=false).trace.json
index 1a650c9e78ae8..37673645d3691 100644
--- a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=false).trace.json
+++ b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=false).trace.json
@@ -112,66 +112,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=true).trace.json b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=true).trace.json
index 1a650c9e78ae8..37673645d3691 100644
--- a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=true).trace.json
+++ b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=false,noemit=true).trace.json
@@ -112,66 +112,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=false).trace.json b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=false).trace.json
index 1a650c9e78ae8..37673645d3691 100644
--- a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=false).trace.json
+++ b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=false).trace.json
@@ -112,66 +112,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=true).trace.json b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=true).trace.json
index 1a650c9e78ae8..37673645d3691 100644
--- a/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=true).trace.json
+++ b/tests/baselines/reference/bundlerImportTsExtensions(allowimportingtsextensions=true,noemit=true).trace.json
@@ -112,66 +112,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/bundlerNodeModules1.trace.json b/tests/baselines/reference/bundlerNodeModules1.trace.json
index 1037efb7cdd26..44a3174be668f 100644
--- a/tests/baselines/reference/bundlerNodeModules1.trace.json
+++ b/tests/baselines/reference/bundlerNodeModules1.trace.json
@@ -4,6 +4,7 @@
     "Resolving in CJS mode with conditions 'import', 'types'.",
     "File '/package.json' does not exist.",
     "Loading module 'dual' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/dual/package.json'.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -25,61 +26,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/bundlerRelative1.trace.json b/tests/baselines/reference/bundlerRelative1.trace.json
index 6f5e726ded490..d6428a257ba66 100644
--- a/tests/baselines/reference/bundlerRelative1.trace.json
+++ b/tests/baselines/reference/bundlerRelative1.trace.json
@@ -84,66 +84,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cacheResolutions.trace.json b/tests/baselines/reference/cacheResolutions.trace.json
index 97970e5e2d689..04b80f1808296 100644
--- a/tests/baselines/reference/cacheResolutions.trace.json
+++ b/tests/baselines/reference/cacheResolutions.trace.json
@@ -13,6 +13,7 @@
     "File '/tslib.ts' does not exist.",
     "File '/tslib.tsx' does not exist.",
     "File '/tslib.d.ts' does not exist.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -35,66 +36,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution1.trace.json b/tests/baselines/reference/cachedModuleResolution1.trace.json
index 74071874f0df2..ca24e6eb8f566 100644
--- a/tests/baselines/reference/cachedModuleResolution1.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution1.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/a/b/c/d/e/app.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
@@ -13,71 +14,84 @@
     "======== Resolving module 'foo' from '/a/b/c/lib.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Resolution for module 'foo' was found in cache from location '/a/b/c'.",
     "======== Module name 'foo' was successfully resolved to '/a/b/node_modules/foo.d.ts'. ========",
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution2.trace.json b/tests/baselines/reference/cachedModuleResolution2.trace.json
index fa4bc5c0686a8..3a51e89284a00 100644
--- a/tests/baselines/reference/cachedModuleResolution2.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution2.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/a/b/c/lib.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
     "File '/a/b/node_modules/foo.ts' does not exist.",
     "File '/a/b/node_modules/foo.tsx' does not exist.",
@@ -11,6 +12,7 @@
     "======== Resolving module 'foo' from '/a/b/c/d/e/app.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Resolution for module 'foo' was found in cache from location '/a/b/c'.",
@@ -18,66 +20,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution3.trace.json b/tests/baselines/reference/cachedModuleResolution3.trace.json
index 5de085a7eaf89..5d4637f3a847a 100644
--- a/tests/baselines/reference/cachedModuleResolution3.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution3.trace.json
@@ -21,66 +21,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution4.trace.json b/tests/baselines/reference/cachedModuleResolution4.trace.json
index 0954e526b0430..077850661bb3f 100644
--- a/tests/baselines/reference/cachedModuleResolution4.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution4.trace.json
@@ -21,66 +21,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution5.trace.json b/tests/baselines/reference/cachedModuleResolution5.trace.json
index 79b1126ca4697..58b255a096cda 100644
--- a/tests/baselines/reference/cachedModuleResolution5.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution5.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/a/b/c/d/e/app.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
@@ -13,71 +14,84 @@
     "======== Resolving module 'foo' from '/a/b/lib.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Resolution for module 'foo' was found in cache from location '/a/b'.",
     "======== Module name 'foo' was successfully resolved to '/a/b/node_modules/foo.d.ts'. ========",
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution6.trace.json b/tests/baselines/reference/cachedModuleResolution6.trace.json
index 852de964c0d88..7262c080862fd 100644
--- a/tests/baselines/reference/cachedModuleResolution6.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution6.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/a/b/c/d/e/app.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
@@ -9,6 +10,7 @@
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Loading module 'foo' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
@@ -19,71 +21,84 @@
     "======== Resolving module 'foo' from '/a/b/c/lib.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Resolution for module 'foo' was found in cache from location '/a/b/c'.",
     "======== Module name 'foo' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution7.trace.json b/tests/baselines/reference/cachedModuleResolution7.trace.json
index 1c7568d7fef16..b6dccf3cfbb2a 100644
--- a/tests/baselines/reference/cachedModuleResolution7.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution7.trace.json
@@ -2,11 +2,13 @@
     "======== Resolving module 'foo' from '/a/b/c/lib.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Loading module 'foo' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -15,6 +17,7 @@
     "======== Resolving module 'foo' from '/a/b/c/d/e/app.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Resolution for module 'foo' was found in cache from location '/a/b/c'.",
@@ -22,66 +25,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution8.trace.json b/tests/baselines/reference/cachedModuleResolution8.trace.json
index b41ac01f31e0d..f8bb55c5d1295 100644
--- a/tests/baselines/reference/cachedModuleResolution8.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution8.trace.json
@@ -19,6 +19,7 @@
     "File '/foo.ts' does not exist.",
     "File '/foo.tsx' does not exist.",
     "File '/foo.d.ts' does not exist.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
@@ -45,66 +46,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/cachedModuleResolution9.trace.json b/tests/baselines/reference/cachedModuleResolution9.trace.json
index da9b28842af2e..52715ad98ca19 100644
--- a/tests/baselines/reference/cachedModuleResolution9.trace.json
+++ b/tests/baselines/reference/cachedModuleResolution9.trace.json
@@ -13,6 +13,7 @@
     "File '/foo.ts' does not exist.",
     "File '/foo.tsx' does not exist.",
     "File '/foo.d.ts' does not exist.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -39,66 +40,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=bundler).trace.json b/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=bundler).trace.json
index ba1e94ea1a63d..bf05835c20931 100644
--- a/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=bundler).trace.json
+++ b/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=bundler).trace.json
@@ -4,6 +4,7 @@
     "Resolving in CJS mode with conditions 'import', 'types'.",
     "File '/package.json' does not exist.",
     "Loading module 'dep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/dep/package.json'.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -23,61 +24,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=node16).trace.json b/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=node16).trace.json
index e4c347208596f..5b5c8fd3267d6 100644
--- a/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=node16).trace.json
+++ b/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=node16).trace.json
@@ -6,6 +6,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist.",
     "Loading module 'dep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/dep/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -27,11 +28,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -39,11 +42,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -51,11 +56,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -63,11 +70,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -75,11 +84,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -87,11 +98,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=nodenext).trace.json b/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=nodenext).trace.json
index 50255d1f9e385..0f9751a01854b 100644
--- a/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=nodenext).trace.json
+++ b/tests/baselines/reference/conditionalExportsResolutionFallback(moduleresolution=nodenext).trace.json
@@ -6,6 +6,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist.",
     "Loading module 'dep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/dep/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -27,11 +28,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -39,11 +42,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -51,11 +56,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -63,11 +70,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -75,11 +84,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -87,11 +98,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/customConditions(resolvepackagejsonexports=false).trace.json b/tests/baselines/reference/customConditions(resolvepackagejsonexports=false).trace.json
index ecc7288a74c6d..3294495b4212c 100644
--- a/tests/baselines/reference/customConditions(resolvepackagejsonexports=false).trace.json
+++ b/tests/baselines/reference/customConditions(resolvepackagejsonexports=false).trace.json
@@ -4,6 +4,7 @@
     "Resolving in CJS mode with conditions 'import', 'types', 'webpack', ' browser'.",
     "File '/package.json' does not exist.",
     "Loading module 'lodash' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/lodash/package.json'.",
     "File '/node_modules/lodash.ts' does not exist.",
     "File '/node_modules/lodash.tsx' does not exist.",
@@ -23,61 +24,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/customConditions(resolvepackagejsonexports=true).trace.json b/tests/baselines/reference/customConditions(resolvepackagejsonexports=true).trace.json
index ef9eb90eb348c..4f461a4bf22e3 100644
--- a/tests/baselines/reference/customConditions(resolvepackagejsonexports=true).trace.json
+++ b/tests/baselines/reference/customConditions(resolvepackagejsonexports=true).trace.json
@@ -4,6 +4,7 @@
     "Resolving in CJS mode with conditions 'import', 'types', 'webpack', ' browser'.",
     "File '/package.json' does not exist.",
     "Loading module 'lodash' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/lodash/package.json'.",
     "Entering conditional exports.",
     "Saw non-matching condition 'browser'.",
@@ -20,61 +21,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage.trace.json b/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage.trace.json
index 069476612267d..a9f18b78bbc85 100644
--- a/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage.trace.json
+++ b/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo/use' from '/index.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo/use' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "'package.json' does not have a 'typesVersions' field.",
     "File '/node_modules/foo/use.ts' does not exist.",
@@ -12,6 +13,7 @@
     "======== Resolving module 'a' from '/index.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'a' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/a/package.json' does not exist.",
     "File '/node_modules/a.ts' does not exist.",
     "File '/node_modules/a.tsx' does not exist.",
@@ -32,6 +34,7 @@
     "======== Resolving module 'foo' from '/node_modules/a/index.d.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/a/node_modules/foo/package.json'.",
     "File '/node_modules/a/node_modules/foo.ts' does not exist.",
     "File '/node_modules/a/node_modules/foo.tsx' does not exist.",
@@ -48,61 +51,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage_scoped.trace.json b/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage_scoped.trace.json
index 201677de7bba3..8c738f89a0cf1 100644
--- a/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage_scoped.trace.json
+++ b/tests/baselines/reference/duplicatePackage_relativeImportWithinPackage_scoped.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@foo/bar/use' from '/index.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@foo/bar/use' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/@foo/bar/package.json'.",
     "'package.json' does not have a 'typesVersions' field.",
     "File '/node_modules/@foo/bar/use.ts' does not exist.",
@@ -12,6 +13,7 @@
     "======== Resolving module 'a' from '/index.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'a' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/a/package.json' does not exist.",
     "File '/node_modules/a.ts' does not exist.",
     "File '/node_modules/a.tsx' does not exist.",
@@ -32,6 +34,7 @@
     "======== Resolving module '@foo/bar' from '/node_modules/a/index.d.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@foo/bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/a/node_modules/@foo/bar/package.json'.",
     "File '/node_modules/a/node_modules/@foo/bar.ts' does not exist.",
     "File '/node_modules/a/node_modules/@foo/bar.tsx' does not exist.",
@@ -48,61 +51,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/globalAugmentationModuleResolution.trace.json b/tests/baselines/reference/globalAugmentationModuleResolution.trace.json
index f685c58a28fe0..cf42e4969b3e3 100644
--- a/tests/baselines/reference/globalAugmentationModuleResolution.trace.json
+++ b/tests/baselines/reference/globalAugmentationModuleResolution.trace.json
@@ -2,66 +2,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/importWithTrailingSlash.trace.json b/tests/baselines/reference/importWithTrailingSlash.trace.json
index b09abde028351..e3c604dcc8c89 100644
--- a/tests/baselines/reference/importWithTrailingSlash.trace.json
+++ b/tests/baselines/reference/importWithTrailingSlash.trace.json
@@ -26,66 +26,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/importWithTrailingSlash_noResolve.trace.json b/tests/baselines/reference/importWithTrailingSlash_noResolve.trace.json
index 9f743517170a1..cb15aeedde606 100644
--- a/tests/baselines/reference/importWithTrailingSlash_noResolve.trace.json
+++ b/tests/baselines/reference/importWithTrailingSlash_noResolve.trace.json
@@ -9,66 +9,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/jsdocInTypeScript.trace.json b/tests/baselines/reference/jsdocInTypeScript.trace.json
index 61dfa59d735e7..b33ab186dd325 100644
--- a/tests/baselines/reference/jsdocInTypeScript.trace.json
+++ b/tests/baselines/reference/jsdocInTypeScript.trace.json
@@ -2,143 +2,169 @@
     "======== Resolving module '@typescript/lib-es2015' from '__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/core' from '__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/core' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/collection' from '__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/collection' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/iterable' from '__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/iterable' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol' from '__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/symbol' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/generator' from '__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/generator' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/promise' from '__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/proxy' from '__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/proxy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/reflect' from '__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/reflect' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from '__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/symbol-wellknown' was not resolved. ========"
diff --git a/tests/baselines/reference/libTypeScriptOverrideSimple.trace.json b/tests/baselines/reference/libTypeScriptOverrideSimple.trace.json
index dccd65a67e734..a5a8e220cac6d 100644
--- a/tests/baselines/reference/libTypeScriptOverrideSimple.trace.json
+++ b/tests/baselines/reference/libTypeScriptOverrideSimple.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@typescript/lib-dom/package.json' does not exist.",
@@ -16,6 +17,7 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@typescript/lib-es5.ts' does not exist.",
@@ -24,6 +26,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/@typescript/lib-es5.js' does not exist.",
     "File '/node_modules/@typescript/lib-es5.jsx' does not exist.",
@@ -31,6 +34,7 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@typescript/lib-decorators.ts' does not exist.",
@@ -39,6 +43,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/@typescript/lib-decorators.js' does not exist.",
     "File '/node_modules/@typescript/lib-decorators.jsx' does not exist.",
@@ -46,26 +51,31 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@typescript/lib-scripthost.ts' does not exist.",
@@ -74,6 +84,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/@typescript/lib-scripthost.js' does not exist.",
     "File '/node_modules/@typescript/lib-scripthost.jsx' does not exist.",
diff --git a/tests/baselines/reference/libTypeScriptOverrideSimpleConfig.trace.json b/tests/baselines/reference/libTypeScriptOverrideSimpleConfig.trace.json
index 29f58a2672345..8edd966941288 100644
--- a/tests/baselines/reference/libTypeScriptOverrideSimpleConfig.trace.json
+++ b/tests/baselines/reference/libTypeScriptOverrideSimpleConfig.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@typescript/lib-dom' from '/somepath/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-dom/package.json' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-dom.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-dom.tsx' does not exist.",
@@ -14,6 +15,7 @@
     "======== Resolving module '@typescript/lib-es5' from '/somepath/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-es5.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-es5.tsx' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-es5.d.ts' does not exist.",
@@ -22,6 +24,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/somepath/node_modules/@typescript/lib-es5.js' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-es5.jsx' does not exist.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
@@ -29,6 +32,7 @@
     "======== Resolving module '@typescript/lib-decorators' from '/somepath/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-decorators.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-decorators.tsx' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-decorators.d.ts' does not exist.",
@@ -37,6 +41,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/somepath/node_modules/@typescript/lib-decorators.js' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-decorators.jsx' does not exist.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
@@ -44,26 +49,31 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/somepath/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/somepath/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/somepath/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/somepath/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/somepath/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.tsx' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.d.ts' does not exist.",
@@ -72,6 +82,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.js' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.jsx' does not exist.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/libTypeScriptSubfileResolving.trace.json b/tests/baselines/reference/libTypeScriptSubfileResolving.trace.json
index 410a43f9ae2ab..6b537d6bb7184 100644
--- a/tests/baselines/reference/libTypeScriptSubfileResolving.trace.json
+++ b/tests/baselines/reference/libTypeScriptSubfileResolving.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from '__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "File '/node_modules/@typescript/lib-dom/package.json' does not exist.",
@@ -13,6 +14,7 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@typescript/lib-es5.ts' does not exist.",
@@ -21,6 +23,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/@typescript/lib-es5.js' does not exist.",
     "File '/node_modules/@typescript/lib-es5.jsx' does not exist.",
@@ -28,6 +31,7 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@typescript/lib-decorators.ts' does not exist.",
@@ -36,6 +40,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/@typescript/lib-decorators.js' does not exist.",
     "File '/node_modules/@typescript/lib-decorators.jsx' does not exist.",
@@ -43,16 +48,19 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.",
@@ -67,16 +75,19 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@typescript/lib-scripthost.ts' does not exist.",
@@ -85,6 +96,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/@typescript/lib-scripthost.js' does not exist.",
     "File '/node_modules/@typescript/lib-scripthost.jsx' does not exist.",
diff --git a/tests/baselines/reference/libTypeScriptSubfileResolvingConfig.trace.json b/tests/baselines/reference/libTypeScriptSubfileResolvingConfig.trace.json
index bd6dc81e5b141..042ae9b861666 100644
--- a/tests/baselines/reference/libTypeScriptSubfileResolvingConfig.trace.json
+++ b/tests/baselines/reference/libTypeScriptSubfileResolvingConfig.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from '/somepath/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-dom/package.json' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-dom/iterable.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-dom/iterable.tsx' does not exist.",
@@ -11,6 +12,7 @@
     "======== Resolving module '@typescript/lib-es5' from '/somepath/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-es5.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-es5.tsx' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-es5.d.ts' does not exist.",
@@ -19,6 +21,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/somepath/node_modules/@typescript/lib-es5.js' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-es5.jsx' does not exist.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
@@ -26,6 +29,7 @@
     "======== Resolving module '@typescript/lib-decorators' from '/somepath/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-decorators.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-decorators.tsx' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-decorators.d.ts' does not exist.",
@@ -34,6 +38,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/somepath/node_modules/@typescript/lib-decorators.js' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-decorators.jsx' does not exist.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
@@ -41,16 +46,19 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/somepath/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/somepath/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/somepath/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.",
     "File '/somepath/node_modules/@typescript/lib-dom.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-dom.tsx' does not exist.",
@@ -63,16 +71,19 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/somepath/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/somepath/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/somepath/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.ts' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.tsx' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.d.ts' does not exist.",
@@ -81,6 +92,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.js' does not exist.",
     "File '/somepath/node_modules/@typescript/lib-scripthost.jsx' does not exist.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/library-reference-1.trace.json b/tests/baselines/reference/library-reference-1.trace.json
index c3747d5910528..173d0c128fb8d 100644
--- a/tests/baselines/reference/library-reference-1.trace.json
+++ b/tests/baselines/reference/library-reference-1.trace.json
@@ -12,66 +12,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-10.trace.json b/tests/baselines/reference/library-reference-10.trace.json
index 2990ac326350a..605574ba9fb26 100644
--- a/tests/baselines/reference/library-reference-10.trace.json
+++ b/tests/baselines/reference/library-reference-10.trace.json
@@ -14,66 +14,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/foo/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/foo/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/foo/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/foo/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/foo/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/foo/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-11.trace.json b/tests/baselines/reference/library-reference-11.trace.json
index 9a95418fc187b..db45efcb8ec0c 100644
--- a/tests/baselines/reference/library-reference-11.trace.json
+++ b/tests/baselines/reference/library-reference-11.trace.json
@@ -3,6 +3,7 @@
     "Resolving with primary search path '/node_modules/@types'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/a/b'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/a/b/node_modules' does not exist, skipping all lookups in it.",
     "Found 'package.json' at '/a/node_modules/jquery/package.json'.",
     "File '/a/node_modules/jquery.d.ts' does not exist.",
@@ -14,49 +15,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-12.trace.json b/tests/baselines/reference/library-reference-12.trace.json
index cd54f2e0ca40d..713d17764d985 100644
--- a/tests/baselines/reference/library-reference-12.trace.json
+++ b/tests/baselines/reference/library-reference-12.trace.json
@@ -3,6 +3,7 @@
     "Resolving with primary search path '/node_modules/@types'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/a/b'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/a/b/node_modules' does not exist, skipping all lookups in it.",
     "Found 'package.json' at '/a/node_modules/jquery/package.json'.",
     "File '/a/node_modules/jquery.d.ts' does not exist.",
@@ -15,49 +16,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-13.trace.json b/tests/baselines/reference/library-reference-13.trace.json
index 1f39d755e656d..9038d8c571259 100644
--- a/tests/baselines/reference/library-reference-13.trace.json
+++ b/tests/baselines/reference/library-reference-13.trace.json
@@ -9,66 +9,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/a/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/a/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/a/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/a/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/a/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/a/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-14.trace.json b/tests/baselines/reference/library-reference-14.trace.json
index 1f39d755e656d..9038d8c571259 100644
--- a/tests/baselines/reference/library-reference-14.trace.json
+++ b/tests/baselines/reference/library-reference-14.trace.json
@@ -9,66 +9,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/a/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/a/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/a/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/a/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/a/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/a/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-15.trace.json b/tests/baselines/reference/library-reference-15.trace.json
index 9321a8af2abbb..9c68e594ceb18 100644
--- a/tests/baselines/reference/library-reference-15.trace.json
+++ b/tests/baselines/reference/library-reference-15.trace.json
@@ -9,66 +9,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/a/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/a/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/a/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/a/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/a/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/a/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-2.trace.json b/tests/baselines/reference/library-reference-2.trace.json
index 999e763eed2e7..efcd611af477b 100644
--- a/tests/baselines/reference/library-reference-2.trace.json
+++ b/tests/baselines/reference/library-reference-2.trace.json
@@ -21,66 +21,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/test/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/test/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/test/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/test/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/test/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/test/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-3.trace.json b/tests/baselines/reference/library-reference-3.trace.json
index e544bf8b087b0..f4d640e4aadc9 100644
--- a/tests/baselines/reference/library-reference-3.trace.json
+++ b/tests/baselines/reference/library-reference-3.trace.json
@@ -4,6 +4,7 @@
     "Directory '/src/node_modules/@types' does not exist, skipping all lookups in it.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/src'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/src/node_modules/jquery/package.json' does not exist.",
     "File '/src/node_modules/jquery.d.ts' does not exist.",
     "File '/src/node_modules/jquery/index.d.ts' exists - use it as a name resolution result.",
@@ -12,61 +13,73 @@
     "======== Resolving module '@typescript/lib-es5' from '/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-4.trace.json b/tests/baselines/reference/library-reference-4.trace.json
index eed9a547c21ae..34f5fc3cff2ad 100644
--- a/tests/baselines/reference/library-reference-4.trace.json
+++ b/tests/baselines/reference/library-reference-4.trace.json
@@ -3,6 +3,7 @@
     "Resolving with primary search path '/src'.",
     "File '/src/foo.d.ts' does not exist.",
     "Looking up in 'node_modules' folder, initial location '/src'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/foo/package.json' does not exist.",
     "File '/node_modules/foo.d.ts' does not exist.",
@@ -13,6 +14,7 @@
     "Resolving with primary search path '/src'.",
     "File '/src/bar.d.ts' does not exist.",
     "Looking up in 'node_modules' folder, initial location '/src'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/bar/package.json' does not exist.",
     "File '/node_modules/bar.d.ts' does not exist.",
@@ -23,6 +25,7 @@
     "Resolving with primary search path '/src'.",
     "File '/src/alpha.d.ts' does not exist.",
     "Looking up in 'node_modules' folder, initial location '/node_modules/foo'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/node_modules/foo/node_modules/alpha/package.json' does not exist.",
     "File '/node_modules/foo/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/index.d.ts' exists - use it as a name resolution result.",
@@ -32,6 +35,7 @@
     "Resolving with primary search path '/src'.",
     "File '/src/alpha.d.ts' does not exist.",
     "Looking up in 'node_modules' folder, initial location '/node_modules/bar'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/node_modules/bar/node_modules/alpha/package.json' does not exist.",
     "File '/node_modules/bar/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/bar/node_modules/alpha/index.d.ts' exists - use it as a name resolution result.",
@@ -40,6 +44,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'test/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
@@ -47,12 +52,14 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'test/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
@@ -60,12 +67,14 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'test/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
@@ -73,12 +82,14 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'test/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
@@ -86,12 +97,14 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'test/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
@@ -99,12 +112,14 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'test/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
@@ -112,6 +127,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'test/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-5.trace.json b/tests/baselines/reference/library-reference-5.trace.json
index d39aa5d8ddc37..9f234c4182618 100644
--- a/tests/baselines/reference/library-reference-5.trace.json
+++ b/tests/baselines/reference/library-reference-5.trace.json
@@ -3,6 +3,7 @@
     "Resolving with primary search path 'types'.",
     "Directory 'types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/src'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/foo/package.json' does not exist.",
     "File '/node_modules/foo.d.ts' does not exist.",
@@ -13,6 +14,7 @@
     "Resolving with primary search path 'types'.",
     "Directory 'types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/src'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/bar/package.json' does not exist.",
     "File '/node_modules/bar.d.ts' does not exist.",
@@ -23,6 +25,7 @@
     "Resolving with primary search path 'types'.",
     "Directory 'types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/node_modules/foo'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/node_modules/foo/node_modules/alpha/package.json' does not exist.",
     "File '/node_modules/foo/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/foo/node_modules/alpha/index.d.ts' exists - use it as a name resolution result.",
@@ -32,6 +35,7 @@
     "Resolving with primary search path 'types'.",
     "Directory 'types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/node_modules/bar'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/node_modules/bar/node_modules/alpha/package.json' does not exist.",
     "File '/node_modules/bar/node_modules/alpha.d.ts' does not exist.",
     "File '/node_modules/bar/node_modules/alpha/index.d.ts' exists - use it as a name resolution result.",
@@ -40,43 +44,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-6.trace.json b/tests/baselines/reference/library-reference-6.trace.json
index 9f7e0cfde0955..b6882d645ef2d 100644
--- a/tests/baselines/reference/library-reference-6.trace.json
+++ b/tests/baselines/reference/library-reference-6.trace.json
@@ -11,41 +11,53 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-7.trace.json b/tests/baselines/reference/library-reference-7.trace.json
index 07f923ec648d2..4ce6c684d7e3f 100644
--- a/tests/baselines/reference/library-reference-7.trace.json
+++ b/tests/baselines/reference/library-reference-7.trace.json
@@ -3,6 +3,7 @@
     "Resolving with primary search path '/node_modules/@types'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/src'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/src/node_modules/jquery/package.json' does not exist.",
     "File '/src/node_modules/jquery.d.ts' does not exist.",
     "File '/src/node_modules/jquery/index.d.ts' exists - use it as a name resolution result.",
@@ -11,49 +12,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/library-reference-8.trace.json b/tests/baselines/reference/library-reference-8.trace.json
index 993bb39cfe912..4eb78e10cb940 100644
--- a/tests/baselines/reference/library-reference-8.trace.json
+++ b/tests/baselines/reference/library-reference-8.trace.json
@@ -36,66 +36,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/test/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/test/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/test/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/test/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/test/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/test/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/test/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/library-reference-scoped-packages.trace.json b/tests/baselines/reference/library-reference-scoped-packages.trace.json
index af7b60af894c1..f85def0581a35 100644
--- a/tests/baselines/reference/library-reference-scoped-packages.trace.json
+++ b/tests/baselines/reference/library-reference-scoped-packages.trace.json
@@ -3,6 +3,7 @@
     "Resolving with primary search path 'types'.",
     "Directory 'types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Scoped package detected, looking in 'beep__boop'",
     "File '/node_modules/@types/beep__boop/package.json' does not exist.",
     "File '/node_modules/@types/beep__boop.d.ts' does not exist.",
@@ -12,59 +13,71 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/maxNodeModuleJsDepthDefaultsToZero.trace.json b/tests/baselines/reference/maxNodeModuleJsDepthDefaultsToZero.trace.json
index a725fd1fe1c1c..a11d237333838 100644
--- a/tests/baselines/reference/maxNodeModuleJsDepthDefaultsToZero.trace.json
+++ b/tests/baselines/reference/maxNodeModuleJsDepthDefaultsToZero.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'shortid' from '/index.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'shortid' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/shortid/package.json' does not exist.",
     "File '/node_modules/shortid.ts' does not exist.",
     "File '/node_modules/shortid.tsx' does not exist.",
@@ -11,6 +12,7 @@
     "File '/node_modules/shortid/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'shortid' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/shortid/package.json' does not exist according to earlier cached lookups.",
     "File '/node_modules/shortid.js' does not exist.",
     "File '/node_modules/shortid.jsx' does not exist.",
@@ -20,43 +22,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionAsTypeReferenceDirective.trace.json b/tests/baselines/reference/moduleResolutionAsTypeReferenceDirective.trace.json
index cc043bc9092ea..e1d0c8913b873 100644
--- a/tests/baselines/reference/moduleResolutionAsTypeReferenceDirective.trace.json
+++ b/tests/baselines/reference/moduleResolutionAsTypeReferenceDirective.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'phaser' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'phaser' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "File '/typings/phaser.d.ts' does not exist.",
     "Found 'package.json' at '/typings/phaser/package.json'.",
@@ -23,49 +24,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveAmbient.trace.json b/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveAmbient.trace.json
index cc043bc9092ea..e1d0c8913b873 100644
--- a/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveAmbient.trace.json
+++ b/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveAmbient.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'phaser' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'phaser' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "File '/typings/phaser.d.ts' does not exist.",
     "Found 'package.json' at '/typings/phaser/package.json'.",
@@ -23,49 +24,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveScoped.trace.json b/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveScoped.trace.json
index df6e9cdad93bb..ed79e4de039ff 100644
--- a/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveScoped.trace.json
+++ b/tests/baselines/reference/moduleResolutionAsTypeReferenceDirectiveScoped.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@scoped/typescache' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@scoped/typescache' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'scoped__typescache'",
     "File '/a/types/@scoped/typescache.d.ts' does not exist.",
@@ -12,16 +13,19 @@
     "======== Resolving module '@mangled/typescache' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@mangled/typescache' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'mangled__typescache'",
     "Scoped package detected, looking in 'mangled__typescache'",
     "File '/a/node_modules/@types/mangled__typescache.d.ts' does not exist.",
     "Loading module '@mangled/typescache' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@mangled/typescache' was not resolved. ========",
     "======== Resolving module '@scoped/nodemodulescache' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@scoped/nodemodulescache' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'scoped__nodemodulescache'",
     "File '/a/types/@scoped/nodemodulescache.d.ts' does not exist.",
@@ -33,16 +37,19 @@
     "======== Resolving module '@mangled/nodemodulescache' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@mangled/nodemodulescache' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'mangled__nodemodulescache'",
     "Scoped package detected, looking in 'mangled__nodemodulescache'",
     "File '/a/node_modules/@types/mangled__nodemodulescache.d.ts' does not exist.",
     "Loading module '@mangled/nodemodulescache' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@mangled/nodemodulescache' was not resolved. ========",
     "======== Resolving module '@scoped/attypescache' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@scoped/attypescache' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'scoped__attypescache'",
     "File '/a/types/@scoped/attypescache.d.ts' does not exist.",
@@ -50,11 +57,13 @@
     "Scoped package detected, looking in 'scoped__attypescache'",
     "File '/a/node_modules/@types/scoped__attypescache.d.ts' does not exist.",
     "Loading module '@scoped/attypescache' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@scoped/attypescache' was not resolved. ========",
     "======== Resolving module '@mangled/attypescache' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@mangled/attypescache' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'mangled__attypescache'",
     "Scoped package detected, looking in 'mangled__attypescache'",
@@ -73,49 +82,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.trace.json b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.trace.json
index 05d2502fe0596..50672d6b77528 100644
--- a/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.trace.json
+++ b/tests/baselines/reference/moduleResolutionPackageIdWithRelativeAndAbsolutePath.trace.json
@@ -11,6 +11,7 @@
     "File '/project/anotherLib.d.ts' does not exist.",
     "Directory '/project/anotherLib' does not exist, skipping all lookups in it.",
     "Loading module 'anotherLib' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/src/node_modules' does not exist, skipping all lookups in it.",
     "File '/project/node_modules/anotherLib/package.json' does not exist.",
     "File '/project/node_modules/anotherLib.ts' does not exist.",
@@ -40,6 +41,7 @@
     "Resolving module name 'troublesome-lib/lib/Compactable' relative to base url '/project' - '/project/troublesome-lib/lib/Compactable'.",
     "Loading module as file / folder, candidate module location '/project/troublesome-lib/lib/Compactable', target file types: TypeScript, Declaration.",
     "Loading module 'troublesome-lib/lib/Compactable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/node_modules/anotherLib/node_modules' does not exist, skipping all lookups in it.",
     "Found 'package.json' at '/project/node_modules/troublesome-lib/package.json'.",
     "'package.json' does not have a 'typesVersions' field.",
@@ -64,6 +66,7 @@
     "Resolving module name 'troublesome-lib/lib/Option' relative to base url '/project' - '/project/troublesome-lib/lib/Option'.",
     "Loading module as file / folder, candidate module location '/project/troublesome-lib/lib/Option', target file types: TypeScript, Declaration.",
     "Loading module 'troublesome-lib/lib/Option' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/shared/lib/node_modules' does not exist, skipping all lookups in it.",
     "Found 'package.json' at '/shared/node_modules/troublesome-lib/package.json'.",
     "'package.json' does not have a 'typesVersions' field.",
@@ -75,61 +78,73 @@
     "======== Resolving module '@typescript/lib-es5' from '/project/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/project/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/project/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/project/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/project/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/project/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/project/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions.trace.json
index 77284485f497e..7aded4319a40f 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions.trace.json
@@ -21,66 +21,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions_notSupported.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions_notSupported.trace.json
index 937ad6efdb622..aa12506a25598 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions_notSupported.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions_notSupported.trace.json
@@ -29,66 +29,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions_notSupported2.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions_notSupported2.trace.json
index e84a278aa2c82..129d2c0a35ea9 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions_notSupported2.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions_notSupported2.trace.json
@@ -13,66 +13,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions_notSupported3.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions_notSupported3.trace.json
index e84a278aa2c82..129d2c0a35ea9 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions_notSupported3.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions_notSupported3.trace.json
@@ -13,66 +13,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions_unexpected.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions_unexpected.trace.json
index deceace40adac..62ff4959a53bf 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions_unexpected.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions_unexpected.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'normalize.css' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'normalize.css' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/normalize.css/package.json'.",
     "File name '/node_modules/normalize.css' has a '.css' extension - stripping it.",
     "File '/node_modules/normalize.d.css.ts' does not exist.",
@@ -27,6 +28,7 @@
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "File name '/node_modules/@types/normalize.css' has a '.css' extension - stripping it.",
     "Loading module 'normalize.css' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/normalize.css/package.json' exists according to earlier cached lookups.",
     "File name '/node_modules/normalize.css' has a '.css' extension - stripping it.",
     "File '/node_modules/normalize.css.js' does not exist.",
@@ -45,61 +47,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions_unexpected2.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions_unexpected2.trace.json
index f8e5102249fb4..0637cf411458e 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions_unexpected2.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions_unexpected2.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "File '/node_modules/foo.ts' does not exist.",
     "File '/node_modules/foo.tsx' does not exist.",
@@ -25,6 +26,7 @@
     "File '/node_modules/foo/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'foo' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/foo.js' does not exist.",
     "File '/node_modules/foo.jsx' does not exist.",
@@ -35,61 +37,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions_withAmbientPresent.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions_withAmbientPresent.trace.json
index 0a11a5a11ab95..3bb4d35e0a2dc 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions_withAmbientPresent.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions_withAmbientPresent.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'js' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'js' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/js/package.json' does not exist.",
     "File '/node_modules/js.ts' does not exist.",
     "File '/node_modules/js.tsx' does not exist.",
@@ -11,6 +12,7 @@
     "File '/node_modules/js/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'js' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/js/package.json' does not exist according to earlier cached lookups.",
     "File '/node_modules/js.js' does not exist.",
     "File '/node_modules/js.jsx' does not exist.",
@@ -20,61 +22,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithExtensions_withPaths.trace.json b/tests/baselines/reference/moduleResolutionWithExtensions_withPaths.trace.json
index 5b6cc5c41421b..f576bfff8635a 100644
--- a/tests/baselines/reference/moduleResolutionWithExtensions_withPaths.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithExtensions_withPaths.trace.json
@@ -44,120 +44,154 @@
     "======== Resolving module '@typescript/lib-es2015' from '/__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/core' from '/__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/core' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/collection' from '/__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/collection' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/iterable' from '/__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/iterable' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol' from '/__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/symbol' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/generator' from '/__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/generator' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/promise' from '/__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/proxy' from '/__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/proxy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/reflect' from '/__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/reflect' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from '/__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es2015/symbol-wellknown' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom/iterable' from '/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom/iterable' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithRequire.trace.json b/tests/baselines/reference/moduleResolutionWithRequire.trace.json
index f685c58a28fe0..cf42e4969b3e3 100644
--- a/tests/baselines/reference/moduleResolutionWithRequire.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithRequire.trace.json
@@ -2,66 +2,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithRequireAndImport.trace.json b/tests/baselines/reference/moduleResolutionWithRequireAndImport.trace.json
index b18090fe3e596..096342d15a8a2 100644
--- a/tests/baselines/reference/moduleResolutionWithRequireAndImport.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithRequireAndImport.trace.json
@@ -7,66 +7,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_empty.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_empty.trace.json
index 11d36a84d7d32..8f7f02beaea36 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_empty.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_empty.trace.json
@@ -7,49 +7,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_notSpecified.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_notSpecified.trace.json
index 11d36a84d7d32..8f7f02beaea36 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_notSpecified.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_notSpecified.trace.json
@@ -7,49 +7,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one.trace.json
index 2abf749f69569..8946291f8d030 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one.trace.json
@@ -7,49 +7,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_oneBlank.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_oneBlank.trace.json
index 11d36a84d7d32..8f7f02beaea36 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_oneBlank.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_oneBlank.trace.json
@@ -7,49 +7,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_oneNotFound.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_oneNotFound.trace.json
index c8fc896d8664d..3d5a40fb3f02c 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_oneNotFound.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_oneNotFound.trace.json
@@ -14,49 +14,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one_dirModuleWithIndex.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one_dirModuleWithIndex.trace.json
index c7310c7a911a6..6fd66a048fdcc 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one_dirModuleWithIndex.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one_dirModuleWithIndex.trace.json
@@ -11,49 +11,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule.trace.json
index 891f98efe2c8b..963e9da2855f1 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'some-library' from '/index.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'some-library' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/some-library/package.json' does not exist.",
     "File '/node_modules/some-library.ios.ts' does not exist.",
     "File '/node_modules/some-library.ios.tsx' does not exist.",
@@ -14,43 +15,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModulePath.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModulePath.trace.json
index 931e461526e61..a2b9fe5bb60a0 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModulePath.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModulePath.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'some-library/foo' from '/index.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'some-library/foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/some-library/package.json' does not exist.",
     "File '/node_modules/some-library/foo.ios.ts' does not exist.",
     "File '/node_modules/some-library/foo.ios.tsx' does not exist.",
@@ -11,43 +12,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule_withPaths.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule_withPaths.trace.json
index 682b0edb87171..7ef2a6e23a1d2 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule_withPaths.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalModule_withPaths.trace.json
@@ -45,43 +45,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalTSModule.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalTSModule.trace.json
index 7ae16e498293a..0290900258f6e 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalTSModule.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one_externalTSModule.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'some-library' from '/test.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'some-library' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/some-library/package.json' does not exist.",
     "File '/node_modules/some-library.ios.ts' does not exist.",
     "File '/node_modules/some-library.ios.tsx' does not exist.",
@@ -12,43 +13,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsModule.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsModule.trace.json
index 6bfb0e608a2db..d0821b52bead3 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsModule.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsModule.trace.json
@@ -17,49 +17,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsonModule.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsonModule.trace.json
index cb2069cdfec37..469f7a6c46361 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsonModule.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_one_jsonModule.trace.json
@@ -15,49 +15,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank1.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank1.trace.json
index 71e3560aad505..c61525f6f021a 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank1.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank1.trace.json
@@ -7,49 +7,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank2.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank2.trace.json
index 86a1fd3a1aa0c..b2211dfd75609 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank2.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank2.trace.json
@@ -8,49 +8,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank3.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank3.trace.json
index 73f9fab684bcf..86eb088322240 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank3.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank3.trace.json
@@ -9,49 +9,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank4.trace.json b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank4.trace.json
index 1abd0250e3f8d..355c103ae4fa9 100644
--- a/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank4.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSuffixes_threeLastIsBlank4.trace.json
@@ -24,49 +24,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolutionWithSymlinks.trace.json b/tests/baselines/reference/moduleResolutionWithSymlinks.trace.json
index 7c3fef21dc22f..9b9570b958288 100644
--- a/tests/baselines/reference/moduleResolutionWithSymlinks.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSymlinks.trace.json
@@ -20,6 +20,7 @@
     "======== Resolving module 'library-a' from '/src/library-b/index.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'library-a' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/src/library-b/node_modules/library-a/package.json' does not exist.",
     "File '/src/library-b/node_modules/library-a.ts' does not exist.",
     "File '/src/library-b/node_modules/library-a.tsx' does not exist.",
@@ -30,66 +31,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithSymlinks_notInNodeModules.trace.json b/tests/baselines/reference/moduleResolutionWithSymlinks_notInNodeModules.trace.json
index 10e5ab292a019..ec59557b23985 100644
--- a/tests/baselines/reference/moduleResolutionWithSymlinks_notInNodeModules.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSymlinks_notInNodeModules.trace.json
@@ -12,66 +12,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithSymlinks_preserveSymlinks.trace.json b/tests/baselines/reference/moduleResolutionWithSymlinks_preserveSymlinks.trace.json
index bcb921208a1e8..1aa36f616ad85 100644
--- a/tests/baselines/reference/moduleResolutionWithSymlinks_preserveSymlinks.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSymlinks_preserveSymlinks.trace.json
@@ -4,6 +4,7 @@
     "Directory 'node_modules/@types' does not exist, skipping all lookups in it.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Looking up in 'node_modules' folder, initial location '/app'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/app/node_modules/linked/package.json' does not exist.",
     "File '/app/node_modules/linked.d.ts' does not exist.",
     "File '/app/node_modules/linked/index.d.ts' exists - use it as a name resolution result.",
@@ -11,6 +12,7 @@
     "======== Resolving module 'real' from '/app/node_modules/linked/index.d.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'real' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/app/node_modules/linked/node_modules' does not exist, skipping all lookups in it.",
     "File '/app/node_modules/real/package.json' does not exist.",
     "File '/app/node_modules/real.ts' does not exist.",
@@ -23,6 +25,7 @@
     "======== Resolving module 'linked' from '/app/app.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'linked' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/app/node_modules/linked/package.json' does not exist according to earlier cached lookups.",
     "File '/app/node_modules/linked.ts' does not exist.",
     "File '/app/node_modules/linked.tsx' does not exist.",
@@ -34,6 +37,7 @@
     "======== Resolving module 'linked2' from '/app/app.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'linked2' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/app/node_modules/linked2/package.json' does not exist.",
     "File '/app/node_modules/linked2.ts' does not exist.",
     "File '/app/node_modules/linked2.tsx' does not exist.",
@@ -45,6 +49,7 @@
     "======== Resolving module 'real' from '/app/node_modules/linked2/index.d.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'real' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/app/node_modules/linked2/node_modules' does not exist, skipping all lookups in it.",
     "File '/app/node_modules/real/package.json' does not exist according to earlier cached lookups.",
     "File '/app/node_modules/real.ts' does not exist.",
@@ -57,66 +62,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolutionWithSymlinks_referenceTypes.trace.json b/tests/baselines/reference/moduleResolutionWithSymlinks_referenceTypes.trace.json
index d887b7e5b6b34..69ed73adb8117 100644
--- a/tests/baselines/reference/moduleResolutionWithSymlinks_referenceTypes.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSymlinks_referenceTypes.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving type reference directive 'library-a', containing file '/app.ts', root directory ''. ========",
     "Root directory cannot be determined, skipping primary search paths.",
     "Looking up in 'node_modules' folder, initial location '/'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/node_modules/library-a.d.ts' does not exist.",
     "File '/node_modules/@types/library-a/package.json' does not exist.",
     "File '/node_modules/@types/library-a.d.ts' does not exist.",
@@ -11,6 +12,7 @@
     "======== Resolving type reference directive 'library-b', containing file '/app.ts', root directory ''. ========",
     "Root directory cannot be determined, skipping primary search paths.",
     "Looking up in 'node_modules' folder, initial location '/'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/node_modules/library-b.d.ts' does not exist.",
     "File '/node_modules/@types/library-b/package.json' does not exist.",
     "File '/node_modules/@types/library-b.d.ts' does not exist.",
@@ -20,6 +22,7 @@
     "======== Resolving type reference directive 'library-a', containing file '/node_modules/@types/library-b/index.d.ts', root directory ''. ========",
     "Root directory cannot be determined, skipping primary search paths.",
     "Looking up in 'node_modules' folder, initial location '/node_modules/@types/library-b'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "File '/node_modules/@types/library-b/node_modules/library-a.d.ts' does not exist.",
     "File '/node_modules/@types/library-b/node_modules/@types/library-a/package.json' does not exist.",
     "File '/node_modules/@types/library-b/node_modules/@types/library-a.d.ts' does not exist.",
@@ -29,6 +32,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -38,6 +42,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -46,6 +51,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -55,6 +61,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -63,6 +70,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -72,6 +80,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -80,6 +89,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -89,6 +99,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -97,6 +108,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -106,6 +118,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -114,6 +127,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -123,6 +137,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/moduleResolutionWithSymlinks_withOutDir.trace.json b/tests/baselines/reference/moduleResolutionWithSymlinks_withOutDir.trace.json
index 7c3fef21dc22f..9b9570b958288 100644
--- a/tests/baselines/reference/moduleResolutionWithSymlinks_withOutDir.trace.json
+++ b/tests/baselines/reference/moduleResolutionWithSymlinks_withOutDir.trace.json
@@ -20,6 +20,7 @@
     "======== Resolving module 'library-a' from '/src/library-b/index.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'library-a' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/src/library-b/node_modules/library-a/package.json' does not exist.",
     "File '/src/library-b/node_modules/library-a.ts' does not exist.",
     "File '/src/library-b/node_modules/library-a.tsx' does not exist.",
@@ -30,66 +31,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot.trace.json b/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot.trace.json
index 063c1d0871bf7..4c937b915f3c9 100644
--- a/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot.trace.json
+++ b/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo/bar' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo/bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/bar/package.json'.",
     "File '/node_modules/foo/bar.ts' does not exist.",
     "File '/node_modules/foo/bar.tsx' does not exist.",
@@ -15,61 +16,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot_fakeScopedPackage.trace.json b/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot_fakeScopedPackage.trace.json
index 41516758eabdb..ad6d46e347494 100644
--- a/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot_fakeScopedPackage.trace.json
+++ b/tests/baselines/reference/moduleResolution_packageJson_notAtPackageRoot_fakeScopedPackage.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo/@bar' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo/@bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/@bar/package.json'.",
     "File '/node_modules/foo/@bar.ts' does not exist.",
     "File '/node_modules/foo/@bar.tsx' does not exist.",
@@ -15,61 +16,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolution_packageJson_scopedPackage.trace.json b/tests/baselines/reference/moduleResolution_packageJson_scopedPackage.trace.json
index 3324da7c000a2..98488231e2f3e 100644
--- a/tests/baselines/reference/moduleResolution_packageJson_scopedPackage.trace.json
+++ b/tests/baselines/reference/moduleResolution_packageJson_scopedPackage.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@foo/bar' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@foo/bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/@foo/bar/package.json'.",
     "File '/node_modules/@foo/bar.ts' does not exist.",
     "File '/node_modules/@foo/bar.tsx' does not exist.",
@@ -15,61 +16,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot.trace.json b/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot.trace.json
index 1c2d13c596599..ae8303a222431 100644
--- a/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot.trace.json
+++ b/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo/bar' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo/bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/bar/package.json' does not exist.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "'package.json' does not have a 'typesVersions' field.",
@@ -25,6 +26,7 @@
     "File '/node_modules/foo/bar/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'foo/bar' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/foo/bar/package.json' does not exist according to earlier cached lookups.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/foo/bar.js' does not exist.",
@@ -36,61 +38,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_fakeScopedPackage.trace.json b/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_fakeScopedPackage.trace.json
index fd7d8be2e1472..9ba0dd6a27849 100644
--- a/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_fakeScopedPackage.trace.json
+++ b/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_fakeScopedPackage.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo/@bar' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo/@bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/@bar/package.json' does not exist.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "'package.json' does not have a 'typesVersions' field.",
@@ -25,6 +26,7 @@
     "File '/node_modules/foo/@bar/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'foo/@bar' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/foo/@bar/package.json' does not exist according to earlier cached lookups.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/foo/@bar.js' does not exist.",
@@ -36,61 +38,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_mainFieldInSubDirectory.trace.json b/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_mainFieldInSubDirectory.trace.json
index 1bfa9a9d9b275..3663b11ca0b2e 100644
--- a/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_mainFieldInSubDirectory.trace.json
+++ b/tests/baselines/reference/moduleResolution_packageJson_yesAtPackageRoot_mainFieldInSubDirectory.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/index.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "File '/node_modules/foo.ts' does not exist.",
     "File '/node_modules/foo.tsx' does not exist.",
@@ -21,61 +22,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=bundler).trace.json b/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=bundler).trace.json
index 81fb7c180ff12..5bf02cfed9cce 100644
--- a/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=bundler).trace.json
+++ b/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=bundler).trace.json
@@ -4,6 +4,7 @@
     "Resolving in CJS mode with conditions 'import', 'types'.",
     "File '/package.json' does not exist.",
     "Loading module '@restart/hooks/useMergedRefs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/@restart/hooks/useMergedRefs/package.json'.",
     "Found 'package.json' at '/node_modules/@restart/hooks/package.json'.",
     "File '/node_modules/@restart/hooks/useMergedRefs.ts' does not exist.",
@@ -18,61 +19,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=node16).trace.json b/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=node16).trace.json
index c6cfa71aa698a..4783b1088ac37 100644
--- a/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=node16).trace.json
+++ b/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=node16).trace.json
@@ -7,6 +7,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module '@restart/hooks/useMergedRefs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/@restart/hooks/useMergedRefs/package.json'.",
     "File '/node_modules/@restart/hooks/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/@restart/hooks/useMergedRefs.ts' does not exist.",
@@ -23,11 +24,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -35,11 +38,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -47,11 +52,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -59,11 +66,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -71,11 +80,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -83,11 +94,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=nodenext).trace.json b/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=nodenext).trace.json
index a222251279bb0..d9c9fffa999c4 100644
--- a/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=nodenext).trace.json
+++ b/tests/baselines/reference/nestedPackageJsonRedirect(moduleresolution=nodenext).trace.json
@@ -7,6 +7,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module '@restart/hooks/useMergedRefs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/@restart/hooks/useMergedRefs/package.json'.",
     "File '/node_modules/@restart/hooks/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/@restart/hooks/useMergedRefs.ts' does not exist.",
@@ -23,11 +24,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -35,11 +38,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -47,11 +52,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -59,11 +66,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -71,11 +80,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -83,11 +94,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/node10IsNode_node.trace.json b/tests/baselines/reference/node10IsNode_node.trace.json
index aced83c3fecc4..2fa3932cc415a 100644
--- a/tests/baselines/reference/node10IsNode_node.trace.json
+++ b/tests/baselines/reference/node10IsNode_node.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'fancy-lib' from '/main.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'fancy-lib' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/fancy-lib/package.json'.",
     "File '/node_modules/fancy-lib.ts' does not exist.",
     "File '/node_modules/fancy-lib.tsx' does not exist.",
@@ -21,61 +22,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/node10IsNode_node10.trace.json b/tests/baselines/reference/node10IsNode_node10.trace.json
index aced83c3fecc4..2fa3932cc415a 100644
--- a/tests/baselines/reference/node10IsNode_node10.trace.json
+++ b/tests/baselines/reference/node10IsNode_node10.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'fancy-lib' from '/main.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module 'fancy-lib' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/fancy-lib/package.json'.",
     "File '/node_modules/fancy-lib.ts' does not exist.",
     "File '/node_modules/fancy-lib.tsx' does not exist.",
@@ -21,61 +22,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/nodeColonModuleResolution.trace.json b/tests/baselines/reference/nodeColonModuleResolution.trace.json
index be7ef45752c4c..cfffe6b261a7c 100644
--- a/tests/baselines/reference/nodeColonModuleResolution.trace.json
+++ b/tests/baselines/reference/nodeColonModuleResolution.trace.json
@@ -7,66 +7,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/nodeColonModuleResolution2.trace.json b/tests/baselines/reference/nodeColonModuleResolution2.trace.json
index 1d7602c8f6f93..08083bc9c8440 100644
--- a/tests/baselines/reference/nodeColonModuleResolution2.trace.json
+++ b/tests/baselines/reference/nodeColonModuleResolution2.trace.json
@@ -17,6 +17,7 @@
     "======== Resolving module '@typescript/lib-es5' from '/a/b/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -24,12 +25,14 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/a/b/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -37,12 +40,14 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/a/b/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -50,12 +55,14 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/a/b/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -63,12 +70,14 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/a/b/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -76,12 +85,14 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/a/b/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
@@ -89,6 +100,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/nodeModulesAtTypesPriority.trace.json b/tests/baselines/reference/nodeModulesAtTypesPriority.trace.json
index 0a22cd594f263..9923e08b0548d 100644
--- a/tests/baselines/reference/nodeModulesAtTypesPriority.trace.json
+++ b/tests/baselines/reference/nodeModulesAtTypesPriority.trace.json
@@ -22,6 +22,7 @@
     "File '/packages/package.json' does not exist according to earlier cached lookups.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'react' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/packages/a/node_modules/react/package.json' does not exist.",
     "File '/packages/a/node_modules/react.ts' does not exist.",
     "File '/packages/a/node_modules/react.tsx' does not exist.",
@@ -46,6 +47,7 @@
     "File '/packages/package.json' does not exist according to earlier cached lookups.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'redux' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/packages/a/node_modules/redux/package.json' does not exist according to earlier cached lookups.",
     "File '/packages/a/node_modules/redux.ts' does not exist.",
     "File '/packages/a/node_modules/redux.tsx' does not exist.",
@@ -74,11 +76,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -86,11 +90,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -98,10 +104,12 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -109,11 +117,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -121,10 +131,12 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -132,11 +144,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=node16).trace.json b/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=node16).trace.json
index 4df525451373a..7281b63ae3917 100644
--- a/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=node16).trace.json
+++ b/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=node16).trace.json
@@ -8,6 +8,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist.",
     "Loading module 'exports-and-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -16,6 +17,7 @@
     "File '/node_modules/exports-and-types-versions/dist/foo.d.ts' does not exist.",
     "Export specifier './foo' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -27,9 +29,11 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/nope' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "======== Module name 'exports-and-types-versions/nope' was not resolved. ========",
@@ -38,6 +42,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types'.",
@@ -52,6 +57,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types@>=4'.",
@@ -66,12 +72,14 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-nah' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
     "Exiting conditional exports.",
     "Export specifier './versioned-nah' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
@@ -83,6 +91,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'just-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/just-types-versions/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' field with version-specific path mappings.",
     "'package.json' has a 'typesVersions' entry '*' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'foo'.",
@@ -96,6 +105,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -104,6 +114,7 @@
     "File '/node_modules/exports-and-types-versions/dist/foo.d.ts' does not exist.",
     "Export specifier './foo' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -111,6 +122,7 @@
     "Resolution of non-relative name failed; trying with modern Node resolution features disabled to see if npm library needs configuration update.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' field with version-specific path mappings.",
     "'package.json' has a 'typesVersions' entry '*' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'foo'.",
@@ -124,9 +136,11 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/nope' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "======== Module name 'exports-and-types-versions/nope' was not resolved. ========",
@@ -135,6 +149,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types'.",
@@ -149,6 +164,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types@>=4'.",
@@ -163,12 +179,14 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-nah' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
     "Exiting conditional exports.",
     "Export specifier './versioned-nah' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
@@ -180,6 +198,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'just-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/just-types-versions/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '*' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'foo'.",
     "Module name 'foo', matched pattern 'foo'.",
@@ -192,11 +211,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -204,11 +225,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -216,11 +239,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -228,11 +253,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -240,11 +267,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -252,11 +281,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=nodenext).trace.json b/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=nodenext).trace.json
index 8e3bbd7e2b857..b02491625550f 100644
--- a/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=nodenext).trace.json
+++ b/tests/baselines/reference/nodeModulesExportsBlocksTypesVersions(module=nodenext).trace.json
@@ -8,6 +8,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist.",
     "Loading module 'exports-and-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -16,6 +17,7 @@
     "File '/node_modules/exports-and-types-versions/dist/foo.d.ts' does not exist.",
     "Export specifier './foo' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -27,9 +29,11 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/nope' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "======== Module name 'exports-and-types-versions/nope' was not resolved. ========",
@@ -38,6 +42,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types'.",
@@ -52,6 +57,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types@>=4'.",
@@ -66,12 +72,14 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-nah' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
     "Exiting conditional exports.",
     "Export specifier './versioned-nah' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
@@ -83,6 +91,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'just-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/just-types-versions/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' field with version-specific path mappings.",
     "'package.json' has a 'typesVersions' entry '*' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'foo'.",
@@ -96,6 +105,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -104,6 +114,7 @@
     "File '/node_modules/exports-and-types-versions/dist/foo.d.ts' does not exist.",
     "Export specifier './foo' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './foo' with target './dist/foo.js'.",
     "File name '/node_modules/exports-and-types-versions/dist/foo.js' has a '.js' extension - stripping it.",
@@ -111,6 +122,7 @@
     "Resolution of non-relative name failed; trying with modern Node resolution features disabled to see if npm library needs configuration update.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' field with version-specific path mappings.",
     "'package.json' has a 'typesVersions' entry '*' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'foo'.",
@@ -124,9 +136,11 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/nope' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Export specifier './nope' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "======== Module name 'exports-and-types-versions/nope' was not resolved. ========",
@@ -135,6 +149,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types'.",
@@ -149,6 +164,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-yep' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'types@>=4'.",
@@ -163,12 +179,14 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'exports-and-types-versions/versioned-nah' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
     "Exiting conditional exports.",
     "Export specifier './versioned-nah' does not exist in package.json scope at path '/node_modules/exports-and-types-versions'.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/exports-and-types-versions/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Saw non-matching condition 'types@<4'.",
@@ -180,6 +198,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'just-types-versions/foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/just-types-versions/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '*' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'foo'.",
     "Module name 'foo', matched pattern 'foo'.",
@@ -192,11 +211,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -204,11 +225,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -216,11 +239,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -228,11 +253,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -240,11 +267,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -252,11 +281,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/nodeModulesPackageImports(module=node16).trace.json b/tests/baselines/reference/nodeModulesPackageImports(module=node16).trace.json
index db2c501945340..b539d8237d6d1 100644
--- a/tests/baselines/reference/nodeModulesPackageImports(module=node16).trace.json
+++ b/tests/baselines/reference/nodeModulesPackageImports(module=node16).trace.json
@@ -86,11 +86,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -99,11 +101,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -112,11 +116,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -125,11 +131,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -138,11 +146,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -151,11 +161,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/nodeModulesPackageImports(module=nodenext).trace.json b/tests/baselines/reference/nodeModulesPackageImports(module=nodenext).trace.json
index fdb7217d1f2f7..68d78eba7a9aa 100644
--- a/tests/baselines/reference/nodeModulesPackageImports(module=nodenext).trace.json
+++ b/tests/baselines/reference/nodeModulesPackageImports(module=nodenext).trace.json
@@ -86,11 +86,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -99,11 +101,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -112,11 +116,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -125,11 +131,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -138,11 +146,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -151,11 +161,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=node16).trace.json b/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=node16).trace.json
index d58bf4cbae106..c1de7709b5df0 100644
--- a/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=node16).trace.json
+++ b/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=node16).trace.json
@@ -5,6 +5,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/cjs/index.cjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/conformance/node/node_modules/inner/package.json'.",
     "Using 'exports' subpath './cjs/*.cjs' with target './index.cjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.cjs' has a '.cjs' extension - stripping it.",
@@ -17,6 +18,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/mjs/index.mjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './mjs/*.mjs' with target './index.mjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.mjs' has a '.mjs' extension - stripping it.",
@@ -29,6 +31,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/js/index.js' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './js/*.js' with target './index.js'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.js' has a '.js' extension - stripping it.",
@@ -123,6 +126,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/cjs/index.cjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './cjs/*.cjs' with target './index.cjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.cjs' has a '.cjs' extension - stripping it.",
@@ -135,6 +139,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/mjs/index.mjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './mjs/*.mjs' with target './index.mjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.mjs' has a '.mjs' extension - stripping it.",
@@ -147,6 +152,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/js/index.js' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './js/*.js' with target './index.js'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.js' has a '.js' extension - stripping it.",
@@ -187,11 +193,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -200,11 +208,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -213,11 +223,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -226,11 +238,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -239,11 +253,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -252,11 +268,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=nodenext).trace.json b/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=nodenext).trace.json
index db060cf8c9ef6..4b1f02b476d56 100644
--- a/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=nodenext).trace.json
+++ b/tests/baselines/reference/nodeModulesPackagePatternExportsTrailers(module=nodenext).trace.json
@@ -5,6 +5,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/cjs/index.cjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/conformance/node/node_modules/inner/package.json'.",
     "Using 'exports' subpath './cjs/*.cjs' with target './index.cjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.cjs' has a '.cjs' extension - stripping it.",
@@ -17,6 +18,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/mjs/index.mjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './mjs/*.mjs' with target './index.mjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.mjs' has a '.mjs' extension - stripping it.",
@@ -29,6 +31,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/js/index.js' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './js/*.js' with target './index.js'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.js' has a '.js' extension - stripping it.",
@@ -123,6 +126,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/cjs/index.cjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './cjs/*.cjs' with target './index.cjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.cjs' has a '.cjs' extension - stripping it.",
@@ -135,6 +139,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/mjs/index.mjs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './mjs/*.mjs' with target './index.mjs'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.mjs' has a '.mjs' extension - stripping it.",
@@ -147,6 +152,7 @@
     "Resolving in CJS mode with conditions 'require', 'types', 'node'.",
     "File 'tests/cases/conformance/node/package.json' exists according to earlier cached lookups.",
     "Loading module 'inner/js/index.js' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/node/node_modules/inner/package.json' exists according to earlier cached lookups.",
     "Using 'exports' subpath './js/*.js' with target './index.js'.",
     "File name 'tests/cases/conformance/node/node_modules/inner/index.js' has a '.js' extension - stripping it.",
@@ -187,11 +193,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -200,11 +208,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -213,11 +223,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -226,11 +238,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -239,11 +253,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -252,11 +268,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/nodeNextModuleResolution1.trace.json b/tests/baselines/reference/nodeNextModuleResolution1.trace.json
index 9927ef6c30d11..199e7e87a7e7a 100644
--- a/tests/baselines/reference/nodeNextModuleResolution1.trace.json
+++ b/tests/baselines/reference/nodeNextModuleResolution1.trace.json
@@ -8,12 +8,14 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/a/b/c/d/e/package.json' exists according to earlier cached lookups.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/node_modules/@types' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
@@ -25,11 +27,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -38,11 +42,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -51,11 +57,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -64,11 +72,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -77,11 +87,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -90,11 +102,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/nodeNextModuleResolution2.trace.json b/tests/baselines/reference/nodeNextModuleResolution2.trace.json
index 79fe344e8e784..72e312487da2e 100644
--- a/tests/baselines/reference/nodeNextModuleResolution2.trace.json
+++ b/tests/baselines/reference/nodeNextModuleResolution2.trace.json
@@ -10,6 +10,7 @@
     "File '/a/package.json' does not exist.",
     "File '/package.json' does not exist.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/a/b/c/d/e/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/d/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/a/b/c/node_modules' does not exist, skipping all lookups in it.",
@@ -24,11 +25,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -37,11 +40,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -50,11 +55,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -63,11 +70,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -76,11 +85,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -89,11 +100,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/packageJsonMain.trace.json b/tests/baselines/reference/packageJsonMain.trace.json
index eaad998f4424e..8ac45c49ea5a2 100644
--- a/tests/baselines/reference/packageJsonMain.trace.json
+++ b/tests/baselines/reference/packageJsonMain.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "File '/node_modules/foo.ts' does not exist.",
     "File '/node_modules/foo.tsx' does not exist.",
@@ -21,6 +22,7 @@
     "File '/node_modules/foo/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'foo' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/foo.js' does not exist.",
     "File '/node_modules/foo.jsx' does not exist.",
@@ -33,6 +35,7 @@
     "======== Resolving module 'bar' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/bar/package.json'.",
     "File '/node_modules/bar.ts' does not exist.",
     "File '/node_modules/bar.tsx' does not exist.",
@@ -57,6 +60,7 @@
     "File '/node_modules/bar/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'bar' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/bar/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/bar.js' does not exist.",
     "File '/node_modules/bar.jsx' does not exist.",
@@ -67,6 +71,7 @@
     "======== Resolving module 'baz' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'baz' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/baz/package.json'.",
     "File '/node_modules/baz.ts' does not exist.",
     "File '/node_modules/baz.tsx' does not exist.",
@@ -88,6 +93,7 @@
     "File '/node_modules/baz/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'baz' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/baz/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/baz.js' does not exist.",
     "File '/node_modules/baz.jsx' does not exist.",
@@ -102,43 +108,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/packageJsonMain_isNonRecursive.trace.json b/tests/baselines/reference/packageJsonMain_isNonRecursive.trace.json
index 90b9dd0fb39eb..ebe7b5838b828 100644
--- a/tests/baselines/reference/packageJsonMain_isNonRecursive.trace.json
+++ b/tests/baselines/reference/packageJsonMain_isNonRecursive.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'foo' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "File '/node_modules/foo.ts' does not exist.",
     "File '/node_modules/foo.tsx' does not exist.",
@@ -23,6 +24,7 @@
     "File '/node_modules/foo/index.d.ts' does not exist.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Loading module 'foo' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/foo.js' does not exist.",
     "File '/node_modules/foo.jsx' does not exist.",
@@ -39,43 +41,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution1_amd.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution1_amd.trace.json
index ab4974241f733..363eb11f29b70 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution1_amd.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution1_amd.trace.json
@@ -2,66 +2,78 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution1_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution1_node.trace.json
index ab4974241f733..363eb11f29b70 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution1_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution1_node.trace.json
@@ -2,66 +2,78 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution2_classic.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution2_classic.trace.json
index 48af24b9994e6..896328575813a 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution2_classic.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution2_classic.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -13,6 +14,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -22,6 +24,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -33,6 +36,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -42,6 +46,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -53,6 +58,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -62,6 +68,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -73,6 +80,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -82,6 +90,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -93,6 +102,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -102,6 +112,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -113,6 +124,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution2_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution2_node.trace.json
index 48af24b9994e6..896328575813a 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution2_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution2_node.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -13,6 +14,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -22,6 +24,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -33,6 +36,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -42,6 +46,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -53,6 +58,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -62,6 +68,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -73,6 +80,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -82,6 +90,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -93,6 +102,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -102,6 +112,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/compiler/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
@@ -113,6 +124,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution3_classic.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution3_classic.trace.json
index 076f2b6513b3a..7e89776e292cd 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution3_classic.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution3_classic.trace.json
@@ -27,66 +27,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution3_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution3_node.trace.json
index 4c9ccc5a76f06..d03ca9bfa5631 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution3_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution3_node.trace.json
@@ -21,6 +21,7 @@
     "File 'c:/root/file4.d.ts' does not exist.",
     "Directory 'c:/root/file4' does not exist, skipping all lookups in it.",
     "Loading module 'file4' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/folder2/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "File 'c:/node_modules/file4/package.json' does not exist.",
@@ -35,66 +36,78 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution4_classic.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution4_classic.trace.json
index 51a75667bf5a7..f00232b0c5193 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution4_classic.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution4_classic.trace.json
@@ -27,66 +27,78 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution4_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution4_node.trace.json
index 6cff239654ea3..bc4b608cee04f 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution4_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution4_node.trace.json
@@ -21,6 +21,7 @@
     "File 'c:/root/file4.d.ts' does not exist.",
     "Directory 'c:/root/file4' does not exist, skipping all lookups in it.",
     "Loading module 'file4' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/folder2/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "File 'c:/node_modules/file4/package.json' does not exist.",
@@ -35,61 +36,73 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution5_classic.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution5_classic.trace.json
index b61939f329a47..069baaa76da72 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution5_classic.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution5_classic.trace.json
@@ -48,66 +48,78 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution5_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution5_node.trace.json
index a8b342f5f0978..430cebb72795a 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution5_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution5_node.trace.json
@@ -52,6 +52,7 @@
     "File 'c:/root/generated/file4.d.ts' does not exist.",
     "Directory 'c:/root/generated/file4' does not exist, skipping all lookups in it.",
     "Loading module 'file4' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/folder1/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "File 'c:/node_modules/file4.ts' exists - use it as a name resolution result.",
@@ -60,61 +61,73 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution6_classic.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution6_classic.trace.json
index 06492e0849a6f..24b30147d485b 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution6_classic.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution6_classic.trace.json
@@ -29,6 +29,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -36,6 +37,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -43,6 +45,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -50,6 +53,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -57,6 +61,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -64,6 +69,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -71,6 +77,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -78,6 +85,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -85,6 +93,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -92,6 +101,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -99,6 +109,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -106,6 +117,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution6_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution6_node.trace.json
index 5cee55afedc12..b03e837a0b3c1 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution6_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution6_node.trace.json
@@ -39,6 +39,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -46,6 +47,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -53,6 +55,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -60,6 +63,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -67,6 +71,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -74,6 +79,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -81,6 +87,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -88,6 +95,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -95,6 +103,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -102,6 +111,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -109,6 +119,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -116,6 +127,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution7_classic.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution7_classic.trace.json
index 4712dd799c228..da15fc9ad28bf 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution7_classic.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution7_classic.trace.json
@@ -74,6 +74,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -81,6 +82,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -88,6 +90,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -95,6 +98,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -102,6 +106,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -109,6 +114,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -116,6 +122,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -123,6 +130,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -130,6 +138,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -137,6 +146,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
@@ -144,6 +154,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -151,6 +162,7 @@
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution7_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution7_node.trace.json
index 75b5ab1d659c4..33d0880875b6c 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution7_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution7_node.trace.json
@@ -31,6 +31,7 @@
     "File 'c:/shared/module3.d.ts' does not exist.",
     "Directory 'c:/shared/module3' does not exist, skipping all lookups in it.",
     "Loading module 'module3' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "File 'c:/node_modules/module3.ts' does not exist.",
@@ -94,6 +95,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -101,12 +103,14 @@
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -114,12 +118,14 @@
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -127,12 +133,14 @@
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -140,12 +148,14 @@
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -153,12 +163,14 @@
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
@@ -166,6 +178,7 @@
     "Directory 'c:/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution8_classic.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution8_classic.trace.json
index a208d71604901..9d29d1260cbb1 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution8_classic.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution8_classic.trace.json
@@ -10,66 +10,78 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution8_node.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution8_node.trace.json
index 59a374bc54195..039e06eb311f3 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution8_node.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution8_node.trace.json
@@ -10,66 +10,78 @@
     "======== Resolving module '@typescript/lib-es5' from 'c:/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from 'c:/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'c:/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from 'c:/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'c:/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from 'c:/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'c:/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'c:/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot.trace.json
index 172e59d60cb2d..9c4a7a475be14 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot.trace.json
@@ -34,66 +34,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_differentRootTypes.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_differentRootTypes.trace.json
index fc09abc422fea..75e151060ae50 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_differentRootTypes.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_differentRootTypes.trace.json
@@ -262,66 +262,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_multipleAliases.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_multipleAliases.trace.json
index 12756c5c4be51..456d80728aa3f 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_multipleAliases.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_multipleAliases.trace.json
@@ -31,66 +31,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_realRootFile.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_realRootFile.trace.json
index fbd04e2ff3e15..48590334f1e15 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_realRootFile.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_aliasWithRoot_realRootFile.trace.json
@@ -32,66 +32,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot.trace.json
index 7401169200879..ec744ffe595b4 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot.trace.json
@@ -34,66 +34,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot_realRootFile.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot_realRootFile.trace.json
index d83d7cf1e22d0..c32e683d6dd1b 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot_realRootFile.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_rootImport_noAliasWithRoot_realRootFile.trace.json
@@ -32,66 +32,78 @@
     "======== Resolving module '@typescript/lib-es5' from '/root/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/root/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/root/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/root/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/root/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/root/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/root/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension.trace.json
index 9f2865eb03b4a..dc8f888023a89 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension.trace.json
@@ -18,49 +18,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtensionInName.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtensionInName.trace.json
index a6b55500e4fbb..d58ed7c1057ec 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtensionInName.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtensionInName.trace.json
@@ -40,49 +40,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_MapedToNodeModules.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_MapedToNodeModules.trace.json
index 6edbf39e1be5d..d5ad90d3381f0 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_MapedToNodeModules.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_MapedToNodeModules.trace.json
@@ -17,6 +17,7 @@
     "Trying substitution 'src/types', candidate module location: 'src/types'.",
     "Loading module as file / folder, candidate module location '/src/types', target file types: TypeScript, Declaration.",
     "Loading module 'foo/bar/foobar.js' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/package.json' does not exist.",
     "File name '/node_modules/foo/bar/foobar.js' has a '.js' extension - stripping it.",
     "File '/node_modules/foo/bar/foobar.ts' does not exist.",
@@ -40,43 +41,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_failedLookup.trace.json b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_failedLookup.trace.json
index 9b4e98607b73f..e55f4c7d6b98d 100644
--- a/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_failedLookup.trace.json
+++ b/tests/baselines/reference/pathMappingBasedModuleResolution_withExtension_failedLookup.trace.json
@@ -9,6 +9,7 @@
     "Loading module as file / folder, candidate module location '/foo/foo.ts', target file types: TypeScript, Declaration.",
     "File name '/foo/foo.ts' has a '.ts' extension - stripping it.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "'baseUrl' option is set to '/', using this value to resolve non-relative module name 'foo'.",
     "'paths' option is specified, looking for a pattern to match module name 'foo'.",
@@ -18,54 +19,67 @@
     "Loading module as file / folder, candidate module location '/foo/foo.ts', target file types: JavaScript.",
     "File name '/foo/foo.ts' has a '.ts' extension - stripping it.",
     "Loading module 'foo' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name 'foo' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/pathsValidation4.trace.json b/tests/baselines/reference/pathsValidation4.trace.json
index ca4ac07a7be43..d5138f9abd0c8 100644
--- a/tests/baselines/reference/pathsValidation4.trace.json
+++ b/tests/baselines/reference/pathsValidation4.trace.json
@@ -11,6 +11,7 @@
     "File 'tests/cases/compiler/src/someModule.d.ts' does not exist.",
     "Directory 'tests/cases/compiler/src/someModule' does not exist, skipping all lookups in it.",
     "Loading module 'someModule' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -26,6 +27,7 @@
     "File 'tests/cases/compiler/src/someModule.jsx' does not exist.",
     "Directory 'tests/cases/compiler/src/someModule' does not exist, skipping all lookups in it.",
     "Loading module 'someModule' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -36,6 +38,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -45,6 +48,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -53,6 +57,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -62,6 +67,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -70,6 +76,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -79,6 +86,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -87,6 +95,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -96,6 +105,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -104,6 +114,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -113,6 +124,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -121,6 +133,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -130,6 +143,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/pathsValidation5.trace.json b/tests/baselines/reference/pathsValidation5.trace.json
index 628b9af30a1e0..04bba0ff71986 100644
--- a/tests/baselines/reference/pathsValidation5.trace.json
+++ b/tests/baselines/reference/pathsValidation5.trace.json
@@ -3,6 +3,7 @@
     "Module resolution kind is not specified, using 'Node10'.",
     "'paths' option is specified, looking for a pattern to match module name 'someModule'.",
     "Loading module 'someModule' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -11,6 +12,7 @@
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "'paths' option is specified, looking for a pattern to match module name 'someModule'.",
     "Loading module 'someModule' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/src/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -21,6 +23,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -30,6 +33,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -38,6 +42,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -47,6 +52,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -55,6 +61,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -64,6 +71,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -72,6 +80,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -81,6 +90,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -89,6 +99,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -98,6 +109,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -106,6 +118,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/compiler/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
@@ -115,6 +128,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/compiler/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/reactJsxReactResolvedNodeNext.trace.json b/tests/baselines/reference/reactJsxReactResolvedNodeNext.trace.json
index 79dd71cc43949..95a17819e68ef 100644
--- a/tests/baselines/reference/reactJsxReactResolvedNodeNext.trace.json
+++ b/tests/baselines/reference/reactJsxReactResolvedNodeNext.trace.json
@@ -13,6 +13,7 @@
     "File 'package.json' does not exist according to earlier cached lookups.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'react/jsx-runtime' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/compiler/node_modules/@types/react/package.json'.",
     "'package.json' does not have a 'typesVersions' field.",
     "File 'tests/cases/compiler/node_modules/@types/react/jsx-runtime.d.ts' exists - use it as a name resolution result.",
@@ -41,11 +42,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -54,11 +57,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -67,11 +72,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -80,11 +87,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -93,11 +102,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -106,11 +117,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/reactJsxReactResolvedNodeNextEsm.trace.json b/tests/baselines/reference/reactJsxReactResolvedNodeNextEsm.trace.json
index 24a7bbf517275..928fb10b8acdf 100644
--- a/tests/baselines/reference/reactJsxReactResolvedNodeNextEsm.trace.json
+++ b/tests/baselines/reference/reactJsxReactResolvedNodeNextEsm.trace.json
@@ -5,6 +5,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File 'tests/cases/compiler/package.json' exists according to earlier cached lookups.",
     "Loading module 'react/jsx-runtime' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/compiler/node_modules/@types/react/package.json'.",
     "Using 'exports' subpath './*' with target './jsx-runtime.js'.",
     "File name 'tests/cases/compiler/node_modules/@types/react/jsx-runtime.js' has a '.js' extension - stripping it.",
@@ -35,11 +36,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
@@ -48,11 +51,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
@@ -61,11 +66,13 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
@@ -74,11 +81,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
@@ -87,11 +96,13 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
@@ -100,11 +111,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
diff --git a/tests/baselines/reference/requireOfJsonFileWithoutResolveJsonModuleAndPathMapping.trace.json b/tests/baselines/reference/requireOfJsonFileWithoutResolveJsonModuleAndPathMapping.trace.json
index 09301f8e564a6..094bdc2634882 100644
--- a/tests/baselines/reference/requireOfJsonFileWithoutResolveJsonModuleAndPathMapping.trace.json
+++ b/tests/baselines/reference/requireOfJsonFileWithoutResolveJsonModuleAndPathMapping.trace.json
@@ -15,6 +15,7 @@
     "Trying substitution 'src/types', candidate module location: 'src/types'.",
     "Loading module as file / folder, candidate module location '/src/types', target file types: TypeScript, Declaration.",
     "Loading module 'foo/bar/foobar.json' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/package.json' does not exist.",
     "File name '/node_modules/foo/bar/foobar.json' has a '.json' extension - stripping it.",
     "File '/node_modules/foo/bar/foobar.d.json.ts' does not exist.",
@@ -35,6 +36,7 @@
     "Trying substitution 'src/types', candidate module location: 'src/types'.",
     "Loading module as file / folder, candidate module location '/src/types', target file types: JavaScript.",
     "Loading module 'foo/bar/foobar.json' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/foo/package.json' does not exist according to earlier cached lookups.",
     "File name '/node_modules/foo/bar/foobar.json' has a '.json' extension - stripping it.",
     "File '/node_modules/foo/bar/foobar.json.js' does not exist.",
@@ -43,43 +45,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/requireOfJsonFile_PathMapping.trace.json b/tests/baselines/reference/requireOfJsonFile_PathMapping.trace.json
index 4f3564d7a1e15..7ff6bd7b37f52 100644
--- a/tests/baselines/reference/requireOfJsonFile_PathMapping.trace.json
+++ b/tests/baselines/reference/requireOfJsonFile_PathMapping.trace.json
@@ -15,6 +15,7 @@
     "Trying substitution 'src/types', candidate module location: 'src/types'.",
     "Loading module as file / folder, candidate module location '/src/types', target file types: TypeScript, Declaration.",
     "Loading module 'foo/bar/foobar.json' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/package.json' does not exist.",
     "File name '/node_modules/foo/bar/foobar.json' has a '.json' extension - stripping it.",
     "File '/node_modules/foo/bar/foobar.d.json.ts' does not exist.",
@@ -36,43 +37,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=bundler).trace.json b/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=bundler).trace.json
index b6117a9519c47..7c0df51ae6340 100644
--- a/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=bundler).trace.json
+++ b/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=bundler).trace.json
@@ -4,6 +4,7 @@
     "Resolving in CJS mode with conditions 'import', 'types'.",
     "File '/package.json' does not exist.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/foo/package.json'.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -15,6 +16,7 @@
     "Saw non-matching condition 'require'.",
     "Exiting conditional exports.",
     "File '/node_modules/@types/foo.d.ts' does not exist.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript, JSON.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -26,6 +28,7 @@
     "Resolution of non-relative name failed; trying with modern Node resolution features disabled to see if npm library needs configuration update.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/foo.ts' does not exist.",
     "File '/node_modules/foo.tsx' does not exist.",
@@ -41,6 +44,7 @@
     "Resolving in CJS mode with conditions 'import', 'types'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/bar/package.json'.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -55,6 +59,7 @@
     "Entering conditional exports.",
     "Saw non-matching condition 'require'.",
     "Exiting conditional exports.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript, JSON.",
     "File '/node_modules/bar/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -66,6 +71,7 @@
     "Resolution of non-relative name failed; trying with modern Node resolution features disabled to see if npm library needs configuration update.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/bar/package.json' exists according to earlier cached lookups.",
     "File '/node_modules/bar.ts' does not exist.",
     "File '/node_modules/bar.tsx' does not exist.",
@@ -108,59 +114,71 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=node16).trace.json b/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=node16).trace.json
index bc06b00ed2f48..da828913ffd4f 100644
--- a/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=node16).trace.json
+++ b/tests/baselines/reference/resolvesWithoutExportsDiagnostic1(moduleresolution=node16).trace.json
@@ -6,6 +6,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -16,6 +17,7 @@
     "Failed to resolve under condition 'import'.",
     "Saw non-matching condition 'require'.",
     "Exiting conditional exports.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -27,6 +29,7 @@
     "Resolution of non-relative name failed; trying with modern Node resolution features disabled to see if npm library needs configuration update.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/foo/package.json' exists according to earlier cached lookups.",
     "'package.json' does not have a 'typesVersions' field.",
     "'package.json' does not have a 'typings' field.",
@@ -39,6 +42,7 @@
     "Resolving in ESM mode with conditions 'import', 'types', 'node'.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at '/node_modules/bar/package.json'.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -53,6 +57,7 @@
     "Entering conditional exports.",
     "Saw non-matching condition 'require'.",
     "Exiting conditional exports.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File '/node_modules/bar/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -64,6 +69,7 @@
     "Resolution of non-relative name failed; trying with modern Node resolution features disabled to see if npm library needs configuration update.",
     "File '/package.json' does not exist according to earlier cached lookups.",
     "Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/bar/package.json' exists according to earlier cached lookups.",
     "'package.json' does not have a 'typesVersions' field.",
     "'package.json' does not have a 'typings' field.",
@@ -101,11 +107,13 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -113,11 +121,13 @@
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -125,10 +135,12 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -136,11 +148,13 @@
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -148,10 +162,12 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
@@ -159,11 +175,13 @@
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "File 'package.json' does not exist according to earlier cached lookups.",
diff --git a/tests/baselines/reference/reuseProgramStructure/can-reuse-ambient-module-declarations-from-non-modified-files.js b/tests/baselines/reference/reuseProgramStructure/can-reuse-ambient-module-declarations-from-non-modified-files.js
index aa9523ed48836..a0a1b27612744 100644
--- a/tests/baselines/reference/reuseProgramStructure/can-reuse-ambient-module-declarations-from-non-modified-files.js
+++ b/tests/baselines/reference/reuseProgramStructure/can-reuse-ambient-module-declarations-from-non-modified-files.js
@@ -52,6 +52,7 @@ File '/a/fs.d.ts' does not exist.
 File '/fs.ts' does not exist.
 File '/fs.tsx' does not exist.
 File '/fs.d.ts' does not exist.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 File '/a/b/node_modules/@types/fs/package.json' does not exist.
 File '/a/b/node_modules/@types/fs.d.ts' does not exist.
 File '/a/b/node_modules/@types/fs/index.d.ts' does not exist.
@@ -178,6 +179,7 @@ File '/a/fs.d.ts' does not exist.
 File '/fs.ts' does not exist.
 File '/fs.tsx' does not exist.
 File '/fs.d.ts' does not exist.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 File '/a/b/node_modules/@types/fs/package.json' does not exist.
 File '/a/b/node_modules/@types/fs.d.ts' does not exist.
 File '/a/b/node_modules/@types/fs/index.d.ts' does not exist.
diff --git a/tests/baselines/reference/reuseProgramStructure/fetches-imports-after-npm-install.js b/tests/baselines/reference/reuseProgramStructure/fetches-imports-after-npm-install.js
index a3e14fb994ab5..5d92611f28350 100644
--- a/tests/baselines/reference/reuseProgramStructure/fetches-imports-after-npm-install.js
+++ b/tests/baselines/reference/reuseProgramStructure/fetches-imports-after-npm-install.js
@@ -35,6 +35,7 @@ resolvedTypeReferenceDirectiveNames: undefined
 ======== Resolving module 'a' from 'file1.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module 'a' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File 'node_modules/a/package.json' does not exist.
 File 'node_modules/a.ts' does not exist.
 File 'node_modules/a.tsx' does not exist.
@@ -46,6 +47,7 @@ File 'node_modules/@types/a/package.json' does not exist.
 File 'node_modules/@types/a.d.ts' does not exist.
 File 'node_modules/@types/a/index.d.ts' does not exist.
 Loading module 'a' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File 'node_modules/a/package.json' does not exist according to earlier cached lookups.
 File 'node_modules/a.js' does not exist.
 File 'node_modules/a.jsx' does not exist.
@@ -100,6 +102,7 @@ resolvedTypeReferenceDirectiveNames: undefined
 ======== Resolving module 'a' from 'file1.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module 'a' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File 'node_modules/a/package.json' does not exist.
 File 'node_modules/a.ts' does not exist.
 File 'node_modules/a.tsx' does not exist.
diff --git a/tests/baselines/reference/scopedPackages.trace.json b/tests/baselines/reference/scopedPackages.trace.json
index 8145f6ad1d511..466c8671a17a0 100644
--- a/tests/baselines/reference/scopedPackages.trace.json
+++ b/tests/baselines/reference/scopedPackages.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module '@cow/boy' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@cow/boy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/@cow/boy/package.json' does not exist.",
     "File '/node_modules/@cow/boy.ts' does not exist.",
     "File '/node_modules/@cow/boy.tsx' does not exist.",
@@ -14,6 +15,7 @@
     "======== Resolving module '@be/bop' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@be/bop' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'be__bop'",
     "File '/node_modules/@types/be__bop/package.json' does not exist.",
     "File '/node_modules/@types/be__bop.d.ts' does not exist.",
@@ -23,6 +25,7 @@
     "======== Resolving module '@be/bop/e/z' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module '@be/bop/e/z' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'be__bop/e/z'",
     "File '/node_modules/@types/be__bop/package.json' does not exist according to earlier cached lookups.",
     "File '/node_modules/@types/be__bop/e/z.d.ts' exists - use it as a name resolution result.",
@@ -31,59 +34,71 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/scopedPackagesClassic.trace.json b/tests/baselines/reference/scopedPackagesClassic.trace.json
index b10080782c657..208b541fc82bf 100644
--- a/tests/baselines/reference/scopedPackagesClassic.trace.json
+++ b/tests/baselines/reference/scopedPackagesClassic.trace.json
@@ -1,6 +1,7 @@
 [
     "======== Resolving module '@see/saw' from '/a.ts'. ========",
     "Explicitly specified module resolution kind: 'Classic'.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Scoped package detected, looking in 'see__saw'",
     "File '/node_modules/@types/see__saw/package.json' does not exist.",
     "File '/node_modules/@types/see__saw.d.ts' does not exist.",
@@ -10,59 +11,71 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/selfNameModuleAugmentation.trace.json b/tests/baselines/reference/selfNameModuleAugmentation.trace.json
index 52ac288a2f199..3959327c71db3 100644
--- a/tests/baselines/reference/selfNameModuleAugmentation.trace.json
+++ b/tests/baselines/reference/selfNameModuleAugmentation.trace.json
@@ -27,6 +27,7 @@
     "Resolving in CJS mode with conditions 'import', 'types'.",
     "File '/package.json' does not exist.",
     "Loading module 'acorn-walk' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration, JSON.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/acorn-walk/package.json' exists according to earlier cached lookups.",
     "Entering conditional exports.",
     "Matched 'exports' condition 'import'.",
@@ -49,61 +50,73 @@
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/tsbuild/fileDelete/detects-deleted-file-with-outFile.js b/tests/baselines/reference/tsbuild/fileDelete/detects-deleted-file-with-outFile.js
index 380e2140459e6..bae847993f755 100644
--- a/tests/baselines/reference/tsbuild/fileDelete/detects-deleted-file-with-outFile.js
+++ b/tests/baselines/reference/tsbuild/fileDelete/detects-deleted-file-with-outFile.js
@@ -78,6 +78,7 @@ File '/src/child.d.ts' does not exist.
 File '/child.ts' does not exist.
 File '/child.tsx' does not exist.
 File '/child.d.ts' does not exist.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 Directory '/src/main/node_modules' does not exist, skipping all lookups in it.
 Directory '/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
diff --git a/tests/baselines/reference/tsbuild/libraryResolution/with-config-with-redirection.js b/tests/baselines/reference/tsbuild/libraryResolution/with-config-with-redirection.js
index dfcf7a8530a96..f939155b99db3 100644
--- a/tests/baselines/reference/tsbuild/libraryResolution/with-config-with-redirection.js
+++ b/tests/baselines/reference/tsbuild/libraryResolution/with-config-with-redirection.js
@@ -164,6 +164,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -178,6 +179,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-webwork
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost/package.json' does not exist.
@@ -192,6 +194,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-scripth
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5/package.json' does not exist.
@@ -213,6 +216,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -253,6 +257,7 @@ project1/typeroot1/sometype/index.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -260,6 +265,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -279,6 +285,7 @@ project2/utils.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -286,6 +293,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -305,6 +313,7 @@ project3/utils.d.ts
 ======== Resolving module '@typescript/lib-esnext' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-esnext'
 File '/home/src/projects/node_modules/@typescript/lib-esnext/package.json' does not exist.
@@ -319,6 +328,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-esnext/
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -326,6 +336,7 @@ Resolution for module '@typescript/lib-dom' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Resolution for module '@typescript/lib-webworker' was found in cache from location '/home/src/projects'.
diff --git a/tests/baselines/reference/tsbuild/libraryResolution/with-config.js b/tests/baselines/reference/tsbuild/libraryResolution/with-config.js
index cb3cedb3beb6e..5045a425382ab 100644
--- a/tests/baselines/reference/tsbuild/libraryResolution/with-config.js
+++ b/tests/baselines/reference/tsbuild/libraryResolution/with-config.js
@@ -125,6 +125,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
@@ -139,6 +140,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
@@ -149,6 +151,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
@@ -163,6 +166,7 @@ Scoped package detected, looking in 'typescript__lib-scripthost'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.jsx' does not exist.
@@ -173,6 +177,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
@@ -187,6 +192,7 @@ Scoped package detected, looking in 'typescript__lib-es5'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-es5.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.jsx' does not exist.
@@ -204,6 +210,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
@@ -218,6 +225,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
@@ -254,6 +262,7 @@ project1/typeroot1/sometype/index.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -261,6 +270,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -280,6 +290,7 @@ project2/utils.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -287,6 +298,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -306,6 +318,7 @@ project3/utils.d.ts
 ======== Resolving module '@typescript/lib-esnext' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-esnext'
 File '/home/src/projects/node_modules/@typescript/lib-esnext.ts' does not exist.
@@ -320,6 +333,7 @@ Scoped package detected, looking in 'typescript__lib-esnext'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-esnext'
 Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-esnext.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-esnext.jsx' does not exist.
@@ -330,6 +344,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -337,6 +352,7 @@ Resolution for module '@typescript/lib-dom' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Resolution for module '@typescript/lib-webworker' was found in cache from location '/home/src/projects'.
diff --git a/tests/baselines/reference/tsbuild/moduleResolution/impliedNodeFormat-differs-between-projects-for-shared-file.js b/tests/baselines/reference/tsbuild/moduleResolution/impliedNodeFormat-differs-between-projects-for-shared-file.js
index 55745f35ca05d..6999ef79ee800 100644
--- a/tests/baselines/reference/tsbuild/moduleResolution/impliedNodeFormat-differs-between-projects-for-shared-file.js
+++ b/tests/baselines/reference/tsbuild/moduleResolution/impliedNodeFormat-differs-between-projects-for-shared-file.js
@@ -91,6 +91,7 @@ Resolving in ESM mode with conditions 'import', 'types', 'node'.
 File '/src/projects/b/src/package.json' does not exist according to earlier cached lookups.
 File '/src/projects/b/package.json' exists according to earlier cached lookups.
 Loading module 'pg' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/src/projects/b/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/src/projects/b/node_modules' does not exist, skipping all lookups in it.
 File '/src/projects/node_modules/@types/pg/package.json' exists according to earlier cached lookups.
diff --git a/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-preserveSymlinks.js b/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-preserveSymlinks.js
index e2d211ed69252..714d8d58a2cc6 100644
--- a/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-preserveSymlinks.js
+++ b/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-preserveSymlinks.js
@@ -58,6 +58,7 @@ File '/user/username/projects/myproject/packages/pkg2/const.ts' exists - use it
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
diff --git a/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly.js b/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly.js
index 95a24ae472c44..0f7944c3ec1cc 100644
--- a/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly.js
+++ b/tests/baselines/reference/tsbuild/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly.js
@@ -58,6 +58,7 @@ File '/user/username/projects/myproject/packages/pkg2/const.ts' exists - use it
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
diff --git a/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config-with-redirection.js b/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config-with-redirection.js
index b541ac6e1f4db..39e31209e3806 100644
--- a/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config-with-redirection.js
+++ b/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config-with-redirection.js
@@ -150,6 +150,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -164,6 +165,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-webwork
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost/package.json' does not exist.
@@ -178,6 +180,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-scripth
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5/package.json' does not exist.
@@ -199,6 +202,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -239,6 +243,7 @@ project1/typeroot1/sometype/index.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -246,6 +251,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -265,6 +271,7 @@ project2/utils.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -272,6 +279,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -291,6 +299,7 @@ project3/utils.d.ts
 ======== Resolving module '@typescript/lib-esnext' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-esnext'
 File '/home/src/projects/node_modules/@typescript/lib-esnext/package.json' does not exist.
@@ -305,6 +314,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-esnext/
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -312,6 +322,7 @@ Resolution for module '@typescript/lib-dom' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Resolution for module '@typescript/lib-webworker' was found in cache from location '/home/src/projects'.
diff --git a/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config.js b/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config.js
index ec805f15e762a..32e7b7a889262 100644
--- a/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config.js
+++ b/tests/baselines/reference/tsbuildWatch/libraryResolution/with-config.js
@@ -111,6 +111,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
@@ -125,6 +126,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
@@ -135,6 +137,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
@@ -149,6 +152,7 @@ Scoped package detected, looking in 'typescript__lib-scripthost'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.jsx' does not exist.
@@ -159,6 +163,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
@@ -173,6 +178,7 @@ Scoped package detected, looking in 'typescript__lib-es5'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-es5.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.jsx' does not exist.
@@ -190,6 +196,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
@@ -204,6 +211,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
@@ -240,6 +248,7 @@ project1/typeroot1/sometype/index.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -247,6 +256,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project2/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project2/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -266,6 +276,7 @@ project2/utils.d.ts
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Resolution for module '@typescript/lib-es5' was found in cache from location '/home/src/projects'.
@@ -273,6 +284,7 @@ Resolution for module '@typescript/lib-es5' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project3/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project3/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -292,6 +304,7 @@ project3/utils.d.ts
 ======== Resolving module '@typescript/lib-esnext' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-esnext'
 File '/home/src/projects/node_modules/@typescript/lib-esnext.ts' does not exist.
@@ -306,6 +319,7 @@ Scoped package detected, looking in 'typescript__lib-esnext'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-esnext'
 Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-esnext.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-esnext.jsx' does not exist.
@@ -316,6 +330,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Resolution for module '@typescript/lib-dom' was found in cache from location '/home/src/projects'.
@@ -323,6 +338,7 @@ Resolution for module '@typescript/lib-dom' was found in cache from location '/h
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project4/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project4/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Resolution for module '@typescript/lib-webworker' was found in cache from location '/home/src/projects'.
diff --git a/tests/baselines/reference/tsbuildWatch/moduleResolution/build-mode-watches-for-changes-to-package-json-main-fields.js b/tests/baselines/reference/tsbuildWatch/moduleResolution/build-mode-watches-for-changes-to-package-json-main-fields.js
index c6b979ad4e36e..5ca6208d83673 100644
--- a/tests/baselines/reference/tsbuildWatch/moduleResolution/build-mode-watches-for-changes-to-package-json-main-fields.js
+++ b/tests/baselines/reference/tsbuildWatch/moduleResolution/build-mode-watches-for-changes-to-package-json-main-fields.js
@@ -66,6 +66,7 @@ File '/user/username/projects/myproject/packages/pkg2/const.ts' exists - use it
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -311,6 +312,7 @@ Output::
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -379,6 +381,7 @@ Output::
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
diff --git a/tests/baselines/reference/tsbuildWatch/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-cts-and-mts-extensions.js b/tests/baselines/reference/tsbuildWatch/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-cts-and-mts-extensions.js
index 5bbe1ffea2727..ac054a64b4938 100644
--- a/tests/baselines/reference/tsbuildWatch/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-cts-and-mts-extensions.js
+++ b/tests/baselines/reference/tsbuildWatch/moduleResolution/resolves-specifier-in-output-declaration-file-from-referenced-project-correctly-with-cts-and-mts-extensions.js
@@ -71,6 +71,7 @@ Module resolution kind is not specified, using 'Node16'.
 Resolving in ESM mode with conditions 'import', 'types', 'node'.
 File '/user/username/projects/myproject/packages/pkg1/package.json' exists according to earlier cached lookups.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -309,6 +310,7 @@ Module resolution kind is not specified, using 'Node16'.
 Resolving in CJS mode with conditions 'require', 'types', 'node'.
 File '/user/username/projects/myproject/packages/pkg1/package.json' exists according to earlier cached lookups.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -394,6 +396,7 @@ Module resolution kind is not specified, using 'Node16'.
 Resolving in ESM mode with conditions 'import', 'types', 'node'.
 File '/user/username/projects/myproject/packages/pkg1/package.json' exists according to earlier cached lookups.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -471,6 +474,7 @@ Module resolution kind is not specified, using 'Node16'.
 Resolving in CJS mode with conditions 'require', 'types', 'node'.
 File '/user/username/projects/myproject/packages/pkg1/package.json' exists according to earlier cached lookups.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -578,6 +582,7 @@ Module resolution kind is not specified, using 'Node16'.
 Resolving in CJS mode with conditions 'require', 'types', 'node'.
 File '/user/username/projects/myproject/packages/pkg1/package.json' exists according to earlier cached lookups.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
diff --git a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-moduleCaseChange.js b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-moduleCaseChange.js
index 1cb6823de4fbb..bc8ddbff6de29 100644
--- a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-moduleCaseChange.js
+++ b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-moduleCaseChange.js
@@ -91,6 +91,7 @@ Output::
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myproject/plugin-one/action.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa/package.json'.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.tsx' does not exist.
@@ -107,6 +108,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'plugin-two' from '/user/username/projects/myproject/plugin-one/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'plugin-two' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two/package.json' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.tsx' does not exist.
@@ -119,6 +121,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myProject/plugin-two/index.d.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myProject/plugin-two/node_modules/typescript-fsa/package.json'.
 File '/user/username/projects/myProject/plugin-two/node_modules/typescript-fsa.ts' does not exist.
 File '/user/username/projects/myProject/plugin-two/node_modules/typescript-fsa.tsx' does not exist.
diff --git a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link-moduleCaseChange.js b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link-moduleCaseChange.js
index a48b0eb27bdd4..bf782256f9cf1 100644
--- a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link-moduleCaseChange.js
+++ b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link-moduleCaseChange.js
@@ -93,6 +93,7 @@ Output::
 ======== Resolving module 'plugin-two' from '/user/username/projects/myproject/plugin-one/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'plugin-two' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/plugin-one/node_modules/plugin-two/package.json'.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.tsx' does not exist.
@@ -112,6 +113,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myproject/plugin-one/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa/package.json'.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.tsx' does not exist.
@@ -128,6 +130,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myProject/plugin-two/dist/commonjs/index.d.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myProject/plugin-two/dist/commonjs/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myProject/plugin-two/dist/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myProject/plugin-two/node_modules/typescript-fsa/package.json'.
diff --git a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link.js b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link.js
index 590f7b9ee4a78..ab7c6a1cca888 100644
--- a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link.js
+++ b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package-with-indirect-link.js
@@ -93,6 +93,7 @@ Output::
 ======== Resolving module 'plugin-two' from '/user/username/projects/myproject/plugin-one/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'plugin-two' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/plugin-one/node_modules/plugin-two/package.json'.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.tsx' does not exist.
@@ -112,6 +113,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myproject/plugin-one/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa/package.json'.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.tsx' does not exist.
@@ -128,6 +130,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myproject/plugin-two/dist/commonjs/index.d.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/plugin-two/dist/commonjs/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/plugin-two/dist/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/plugin-two/node_modules/typescript-fsa/package.json'.
diff --git a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package.js b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package.js
index 791a357ff9e24..7a4ccaf37c67b 100644
--- a/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package.js
+++ b/tests/baselines/reference/tsc/declarationEmit/when-same-version-is-referenced-through-source-and-another-symlinked-package.js
@@ -91,6 +91,7 @@ Output::
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myproject/plugin-one/action.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa/package.json'.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/typescript-fsa.tsx' does not exist.
@@ -107,6 +108,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'plugin-two' from '/user/username/projects/myproject/plugin-one/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'plugin-two' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two/package.json' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.ts' does not exist.
 File '/user/username/projects/myproject/plugin-one/node_modules/plugin-two.tsx' does not exist.
@@ -119,6 +121,7 @@ Resolving real path for '/user/username/projects/myproject/plugin-one/node_modul
 ======== Resolving module 'typescript-fsa' from '/user/username/projects/myproject/plugin-two/index.d.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'typescript-fsa' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/plugin-two/node_modules/typescript-fsa/package.json'.
 File '/user/username/projects/myproject/plugin-two/node_modules/typescript-fsa.ts' does not exist.
 File '/user/username/projects/myproject/plugin-two/node_modules/typescript-fsa.tsx' does not exist.
diff --git a/tests/baselines/reference/tsc/libraryResolution/with-config-with-redirection.js b/tests/baselines/reference/tsc/libraryResolution/with-config-with-redirection.js
index cd8d5d48cab23..2b0118775bdca 100644
--- a/tests/baselines/reference/tsc/libraryResolution/with-config-with-redirection.js
+++ b/tests/baselines/reference/tsc/libraryResolution/with-config-with-redirection.js
@@ -154,6 +154,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -168,6 +169,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-webwork
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost/package.json' does not exist.
@@ -182,6 +184,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-scripth
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5/package.json' does not exist.
@@ -203,6 +206,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
diff --git a/tests/baselines/reference/tsc/libraryResolution/with-config.js b/tests/baselines/reference/tsc/libraryResolution/with-config.js
index 96e2024923c7c..f8e62ffaf0b35 100644
--- a/tests/baselines/reference/tsc/libraryResolution/with-config.js
+++ b/tests/baselines/reference/tsc/libraryResolution/with-config.js
@@ -115,6 +115,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
@@ -129,6 +130,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
@@ -139,6 +141,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
@@ -153,6 +156,7 @@ Scoped package detected, looking in 'typescript__lib-scripthost'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.jsx' does not exist.
@@ -163,6 +167,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
@@ -177,6 +182,7 @@ Scoped package detected, looking in 'typescript__lib-es5'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-es5.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.jsx' does not exist.
@@ -194,6 +200,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
@@ -208,6 +215,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
diff --git a/tests/baselines/reference/tsc/libraryResolution/without-config-with-redirection.js b/tests/baselines/reference/tsc/libraryResolution/without-config-with-redirection.js
index fabb413b08864..148c020fa0d4c 100644
--- a/tests/baselines/reference/tsc/libraryResolution/without-config-with-redirection.js
+++ b/tests/baselines/reference/tsc/libraryResolution/without-config-with-redirection.js
@@ -154,6 +154,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
@@ -166,6 +167,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-webwork
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.tsx' does not exist.
@@ -178,6 +180,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-scripth
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-es5/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.tsx' does not exist.
@@ -190,6 +193,7 @@ Resolving real path for '/home/src/projects/node_modules/@typescript/lib-es5/ind
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
diff --git a/tests/baselines/reference/tsc/libraryResolution/without-config.js b/tests/baselines/reference/tsc/libraryResolution/without-config.js
index 6ac0052b5f69b..ca47d51ca4cdd 100644
--- a/tests/baselines/reference/tsc/libraryResolution/without-config.js
+++ b/tests/baselines/reference/tsc/libraryResolution/without-config.js
@@ -115,6 +115,7 @@ Output::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.d.ts' does not exist.
@@ -127,6 +128,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
@@ -136,6 +138,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.d.ts' does not exist.
@@ -148,6 +151,7 @@ Scoped package detected, looking in 'typescript__lib-scripthost'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
@@ -157,6 +161,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.d.ts' does not exist.
@@ -169,6 +174,7 @@ Scoped package detected, looking in 'typescript__lib-es5'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-es5.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
@@ -178,6 +184,7 @@ Directory '/node_modules' does not exist, skipping all lookups in it.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.d.ts' does not exist.
@@ -190,6 +197,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
diff --git a/tests/baselines/reference/tsc/moduleResolution/node10Result.js b/tests/baselines/reference/tsc/moduleResolution/node10Result.js
index 55c238ef65e70..c15a068f8c196 100644
--- a/tests/baselines/reference/tsc/moduleResolution/node10Result.js
+++ b/tests/baselines/reference/tsc/moduleResolution/node10Result.js
@@ -167,6 +167,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -181,6 +182,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -196,6 +198,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -212,6 +215,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -230,6 +234,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -245,6 +250,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -277,6 +283,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -295,6 +302,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -513,6 +521,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -527,6 +536,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -542,6 +552,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -558,6 +569,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -576,6 +588,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -591,6 +604,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -636,6 +650,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -654,6 +669,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -725,6 +741,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -739,6 +756,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -754,6 +772,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -783,6 +802,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -801,6 +821,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -816,6 +837,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -861,6 +883,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -879,6 +902,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -952,6 +976,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -966,6 +991,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -981,6 +1007,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -1010,6 +1037,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1028,6 +1056,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1043,6 +1072,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -1075,6 +1105,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1093,6 +1124,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1166,6 +1198,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1180,6 +1213,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1195,6 +1229,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -1211,6 +1246,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1229,6 +1265,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1244,6 +1281,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -1276,6 +1314,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1294,6 +1333,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1377,6 +1417,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1391,6 +1432,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1406,6 +1448,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -1422,6 +1465,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1450,6 +1494,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1468,6 +1513,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1677,6 +1723,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1695,6 +1742,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1723,6 +1771,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1741,6 +1790,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1929,6 +1979,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1947,6 +1998,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1975,6 +2027,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1993,6 +2046,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2011,6 +2065,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2026,6 +2081,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2236,6 +2292,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -2254,6 +2311,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2282,6 +2340,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2296,6 +2355,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2311,6 +2371,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2327,6 +2388,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2345,6 +2407,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2360,6 +2423,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2568,6 +2632,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -2586,6 +2651,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2614,6 +2680,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2628,6 +2695,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2643,6 +2711,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2659,6 +2728,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2677,6 +2747,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2692,6 +2763,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2780,6 +2852,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -2798,6 +2871,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2826,6 +2900,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2840,6 +2915,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2855,6 +2931,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2884,6 +2961,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2902,6 +2980,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2917,6 +2996,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -3007,6 +3087,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -3025,6 +3106,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3053,6 +3135,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3067,6 +3150,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3082,6 +3166,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -3111,6 +3196,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3129,6 +3215,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3144,6 +3231,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -3221,6 +3309,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -3239,6 +3328,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3267,6 +3357,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3281,6 +3372,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3296,6 +3388,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -3312,6 +3405,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3330,6 +3424,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -3345,6 +3440,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
diff --git a/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js b/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js
index 96c3767e6078a..4081e1eda6998 100644
--- a/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js
+++ b/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js
@@ -50,6 +50,7 @@ File '/Users/name/package.json' does not exist according to earlier cached looku
 File '/Users/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'yargs' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/Users/name/projects/web/src/node_modules' does not exist, skipping all lookups in it.
 File '/Users/name/projects/web/node_modules/yargs.ts' does not exist.
 File '/Users/name/projects/web/node_modules/yargs.tsx' does not exist.
diff --git a/tests/baselines/reference/tscWatch/libraryResolution/with-config-with-redirection.js b/tests/baselines/reference/tscWatch/libraryResolution/with-config-with-redirection.js
index 9c5df76d51b04..64aca1a93b557 100644
--- a/tests/baselines/reference/tscWatch/libraryResolution/with-config-with-redirection.js
+++ b/tests/baselines/reference/tscWatch/libraryResolution/with-config-with-redirection.js
@@ -149,6 +149,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/projects/project1/file2.ts 250 undefi
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -168,6 +169,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost/package.json' does not exist.
@@ -183,6 +185,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5/package.json' does not exist.
@@ -210,6 +213,7 @@ Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /home/src/projects/project1/
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -525,6 +529,7 @@ Reusing resolution of type reference directive 'sometype' from '/home/src/projec
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -543,6 +548,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
@@ -1279,6 +1285,7 @@ Reusing resolution of module '@typescript/lib-es5' from '/home/src/projects/proj
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -1677,6 +1684,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -1695,6 +1703,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
@@ -1966,6 +1975,7 @@ FileWatcher:: Close:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -1984,6 +1994,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
@@ -2254,6 +2265,7 @@ CreatingProgramWith::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
diff --git a/tests/baselines/reference/tscWatch/libraryResolution/with-config.js b/tests/baselines/reference/tscWatch/libraryResolution/with-config.js
index 829eb460aac32..1a97c621ca05c 100644
--- a/tests/baselines/reference/tscWatch/libraryResolution/with-config.js
+++ b/tests/baselines/reference/tscWatch/libraryResolution/with-config.js
@@ -110,6 +110,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/projects/project1/file2.ts 250 undefi
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
@@ -124,6 +125,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
@@ -139,6 +141,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/lib/lib.webworker.d.ts 250 undefined
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
@@ -153,6 +156,7 @@ Scoped package detected, looking in 'typescript__lib-scripthost'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.jsx' does not exist.
@@ -164,6 +168,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/lib/lib.scripthost.d.ts 250 undefined
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
@@ -178,6 +183,7 @@ Scoped package detected, looking in 'typescript__lib-es5'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-es5.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.jsx' does not exist.
@@ -201,6 +207,7 @@ Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /home/src/projects/project1/
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
@@ -215,6 +222,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
@@ -530,6 +538,7 @@ Reusing resolution of module '@typescript/lib-es5' from '/home/src/projects/proj
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -1268,6 +1277,7 @@ Reusing resolution of type reference directive 'sometype' from '/home/src/projec
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -1286,6 +1296,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
@@ -1680,6 +1691,7 @@ Resolving real path for '/home/src/projects/project1/typeroot1/sometype/index.d.
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -1957,6 +1969,7 @@ CreatingProgramWith::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -2227,6 +2240,7 @@ FileWatcher:: Close:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -2245,6 +2259,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
diff --git a/tests/baselines/reference/tscWatch/libraryResolution/without-config-with-redirection.js b/tests/baselines/reference/tscWatch/libraryResolution/without-config-with-redirection.js
index ac6aff00797f7..ed29ae1819973 100644
--- a/tests/baselines/reference/tscWatch/libraryResolution/without-config-with-redirection.js
+++ b/tests/baselines/reference/tscWatch/libraryResolution/without-config-with-redirection.js
@@ -150,6 +150,7 @@ FileWatcher:: Added:: WatchInfo: project1/file2.ts 250 undefined Source file
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
@@ -165,6 +166,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.tsx' does not exist.
@@ -178,6 +180,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-es5/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.tsx' does not exist.
@@ -191,6 +194,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
@@ -342,6 +346,7 @@ Reusing resolution of module '@typescript/lib-es5' from '/home/src/projects/__li
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
@@ -358,6 +363,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
@@ -674,6 +680,7 @@ Reusing resolution of module '@typescript/lib-es5' from '/home/src/projects/__li
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
@@ -798,6 +805,7 @@ FileWatcher:: Close:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
@@ -814,6 +822,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
@@ -942,6 +951,7 @@ CreatingProgramWith::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
diff --git a/tests/baselines/reference/tscWatch/libraryResolution/without-config.js b/tests/baselines/reference/tscWatch/libraryResolution/without-config.js
index 05aa24c84229f..05457f495013d 100644
--- a/tests/baselines/reference/tscWatch/libraryResolution/without-config.js
+++ b/tests/baselines/reference/tscWatch/libraryResolution/without-config.js
@@ -111,6 +111,7 @@ FileWatcher:: Added:: WatchInfo: project1/file2.ts 250 undefined Source file
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.d.ts' does not exist.
@@ -123,6 +124,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
@@ -135,6 +137,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/lib/lib.webworker.d.ts 250 undefined
 ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.d.ts' does not exist.
@@ -147,6 +150,7 @@ Scoped package detected, looking in 'typescript__lib-scripthost'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-scripthost'
 Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-scripthost.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
@@ -157,6 +161,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/lib/lib.scripthost.d.ts 250 undefined
 ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.d.ts' does not exist.
@@ -169,6 +174,7 @@ Scoped package detected, looking in 'typescript__lib-es5'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-es5'
 Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-es5.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-es5.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
@@ -179,6 +185,7 @@ FileWatcher:: Added:: WatchInfo: /home/src/lib/lib.es5.d.ts 250 undefined Source
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.d.ts' does not exist.
@@ -191,6 +198,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
@@ -344,6 +352,7 @@ Reusing resolution of module '@typescript/lib-es5' from '/home/src/projects/__li
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
@@ -659,6 +668,7 @@ Reusing resolution of module '@typescript/lib-es5' from '/home/src/projects/__li
 ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.tsx' does not exist.
@@ -675,6 +685,7 @@ Scoped package detected, looking in 'typescript__lib-dom'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-dom'
 Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
@@ -803,6 +814,7 @@ CreatingProgramWith::
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
@@ -930,6 +942,7 @@ FileWatcher:: Close:: WatchInfo: /home/src/projects/node_modules/@typescript/lib
 ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Explicitly specified module resolution kind: 'Node10'.
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.tsx' does not exist.
@@ -946,6 +959,7 @@ Scoped package detected, looking in 'typescript__lib-webworker'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'typescript__lib-webworker'
 Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist according to earlier cached lookups.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
diff --git a/tests/baselines/reference/tscWatch/moduleResolution/module-resolutions-from-file-are-partially-used.js b/tests/baselines/reference/tscWatch/moduleResolution/module-resolutions-from-file-are-partially-used.js
index dda5f2dc9aa5b..45b46825b8d56 100644
--- a/tests/baselines/reference/tscWatch/moduleResolution/module-resolutions-from-file-are-partially-used.js
+++ b/tests/baselines/reference/tscWatch/moduleResolution/module-resolutions-from-file-are-partially-used.js
@@ -66,6 +66,7 @@ File '/user/username/package.json' does not exist according to earlier cached lo
 File '/user/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'pkg' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -87,6 +88,7 @@ File '/user/username/package.json' does not exist according to earlier cached lo
 File '/user/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'pkg1' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg1/package.json'.
 Entering conditional exports.
 Saw non-matching condition 'import'.
@@ -103,6 +105,7 @@ Directory '/user/username/projects/node_modules' does not exist, skipping all lo
 Directory '/user/username/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/user/username/projects/myproject/node_modules/pkg1/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Saw non-matching condition 'import'.
@@ -254,6 +257,7 @@ File '/user/username/package.json' does not exist according to earlier cached lo
 File '/user/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'pkg' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/user/username/projects/myproject/node_modules/pkg/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
diff --git a/tests/baselines/reference/tscWatch/moduleResolution/node10Result.js b/tests/baselines/reference/tscWatch/moduleResolution/node10Result.js
index 69b2daecb4ec0..cc4fa511b05d0 100644
--- a/tests/baselines/reference/tscWatch/moduleResolution/node10Result.js
+++ b/tests/baselines/reference/tscWatch/moduleResolution/node10Result.js
@@ -160,6 +160,7 @@ File '/home/src/package.json' does not exist.
 File '/home/package.json' does not exist.
 File '/package.json' does not exist.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -174,6 +175,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -189,6 +191,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -205,6 +208,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -223,6 +227,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -238,6 +243,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -270,6 +276,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -288,6 +295,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -591,6 +599,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -609,6 +618,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -624,6 +634,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typings' field.
 'package.json' does not have a 'types' field.
@@ -735,6 +746,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -749,6 +761,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -764,6 +777,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -864,6 +878,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -882,6 +897,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -897,6 +913,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typings' field.
 'package.json' does not have a 'types' field.
@@ -997,6 +1014,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1011,6 +1029,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1026,6 +1045,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -1123,6 +1143,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1396,6 +1417,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'types'.
@@ -1650,6 +1672,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1668,6 +1691,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1683,6 +1707,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -1963,6 +1988,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1977,6 +2003,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -1992,6 +2019,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2251,6 +2279,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2269,6 +2298,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2284,6 +2314,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typings' field.
 'package.json' does not have a 'types' field.
@@ -2395,6 +2426,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2409,6 +2441,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2424,6 +2457,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
@@ -2524,6 +2558,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2542,6 +2577,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2557,6 +2593,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typings' field.
 'package.json' does not have a 'types' field.
@@ -2657,6 +2694,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2671,6 +2709,7 @@ Directory '/home/src/projects/node_modules' does not exist, skipping all lookups
 Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -2686,6 +2725,7 @@ File '/home/src/package.json' does not exist according to earlier cached lookups
 File '/home/package.json' does not exist according to earlier cached lookups.
 File '/package.json' does not exist according to earlier cached lookups.
 Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 'package.json' does not have a 'typesVersions' field.
 'package.json' does not have a 'typings' field.
diff --git a/tests/baselines/reference/tscWatch/moduleResolution/type-reference-resolutions-reuse.js b/tests/baselines/reference/tscWatch/moduleResolution/type-reference-resolutions-reuse.js
index 46fd21c07cbd3..712959d3150ad 100644
--- a/tests/baselines/reference/tscWatch/moduleResolution/type-reference-resolutions-reuse.js
+++ b/tests/baselines/reference/tscWatch/moduleResolution/type-reference-resolutions-reuse.js
@@ -79,6 +79,7 @@ Directory '/user/username/node_modules/@types' does not exist, skipping all look
 Directory '/user/node_modules/@types' does not exist, skipping all lookups in it.
 Directory '/node_modules/@types' does not exist, skipping all lookups in it.
 Looking up in 'node_modules' folder, initial location '/user/username/projects/myproject'.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg/package.json'.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
@@ -96,6 +97,7 @@ Directory '/user/username/node_modules/@types' does not exist, skipping all look
 Directory '/user/node_modules/@types' does not exist, skipping all lookups in it.
 Directory '/node_modules/@types' does not exist, skipping all lookups in it.
 Looking up in 'node_modules' folder, initial location '/user/username/projects/myproject'.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg1/package.json'.
 Entering conditional exports.
 Saw non-matching condition 'import'.
@@ -276,6 +278,7 @@ Directory '/user/username/node_modules/@types' does not exist, skipping all look
 Directory '/user/node_modules/@types' does not exist, skipping all lookups in it.
 Directory '/node_modules/@types' does not exist, skipping all lookups in it.
 Looking up in 'node_modules' folder, initial location '/user/username/projects/myproject'.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 File '/user/username/projects/myproject/node_modules/pkg/package.json' exists according to earlier cached lookups.
 Entering conditional exports.
 Matched 'exports' condition 'import'.
diff --git a/tests/baselines/reference/tscWatch/moduleResolution/watches-for-changes-to-package-json-main-fields.js b/tests/baselines/reference/tscWatch/moduleResolution/watches-for-changes-to-package-json-main-fields.js
index 490f7f99a7155..297e212fb9b99 100644
--- a/tests/baselines/reference/tscWatch/moduleResolution/watches-for-changes-to-package-json-main-fields.js
+++ b/tests/baselines/reference/tscWatch/moduleResolution/watches-for-changes-to-package-json-main-fields.js
@@ -45,6 +45,7 @@ Output::
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -163,6 +164,7 @@ Output::
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
@@ -273,6 +275,7 @@ Output::
 ======== Resolving module 'pkg2' from '/user/username/projects/myproject/packages/pkg1/index.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/packages/pkg1/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/packages/node_modules' does not exist, skipping all lookups in it.
 Found 'package.json' at '/user/username/projects/myproject/node_modules/pkg2/package.json'.
diff --git a/tests/baselines/reference/tscWatch/resolutionCache/reusing-type-ref-resolution.js b/tests/baselines/reference/tscWatch/resolutionCache/reusing-type-ref-resolution.js
index 38790e209d0a3..d6286a192a329 100644
--- a/tests/baselines/reference/tscWatch/resolutionCache/reusing-type-ref-resolution.js
+++ b/tests/baselines/reference/tscWatch/resolutionCache/reusing-type-ref-resolution.js
@@ -49,6 +49,7 @@ FileWatcher:: Added:: WatchInfo: /users/username/projects/project/fileWithImport
 ======== Resolving module 'pkg0' from '/users/username/projects/project/fileWithImports.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg0' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/users/username/projects/project/node_modules/pkg0/package.json' does not exist.
 File '/users/username/projects/project/node_modules/pkg0.ts' does not exist.
 File '/users/username/projects/project/node_modules/pkg0.tsx' does not exist.
@@ -61,6 +62,7 @@ Resolving real path for '/users/username/projects/project/node_modules/pkg0/inde
 ======== Resolving module 'pkg1' from '/users/username/projects/project/fileWithImports.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/users/username/projects/project/node_modules/pkg1.ts' does not exist.
 File '/users/username/projects/project/node_modules/pkg1.tsx' does not exist.
 File '/users/username/projects/project/node_modules/pkg1.d.ts' does not exist.
@@ -70,6 +72,7 @@ Directory '/users/username/node_modules' does not exist, skipping all lookups in
 Directory '/users/node_modules' does not exist, skipping all lookups in it.
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Loading module 'pkg1' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 File '/users/username/projects/project/node_modules/pkg1.js' does not exist.
 File '/users/username/projects/project/node_modules/pkg1.jsx' does not exist.
 Directory '/users/username/projects/node_modules' does not exist, skipping all lookups in it.
@@ -87,6 +90,7 @@ Directory '/users/username/node_modules/@types' does not exist, skipping all loo
 Directory '/users/node_modules/@types' does not exist, skipping all lookups in it.
 Directory '/node_modules/@types' does not exist, skipping all lookups in it.
 Looking up in 'node_modules' folder, initial location '/users/username/projects/project'.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 File '/users/username/projects/project/node_modules/pkg2/package.json' does not exist.
 File '/users/username/projects/project/node_modules/pkg2.d.ts' does not exist.
 File '/users/username/projects/project/node_modules/pkg2/index.d.ts' exists - use it as a name resolution result.
@@ -104,6 +108,7 @@ Directory '/users/username/node_modules/@types' does not exist, skipping all loo
 Directory '/users/node_modules/@types' does not exist, skipping all lookups in it.
 Directory '/node_modules/@types' does not exist, skipping all lookups in it.
 Looking up in 'node_modules' folder, initial location '/users/username/projects/project'.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 File '/users/username/projects/project/node_modules/pkg3.d.ts' does not exist.
 Directory '/users/username/projects/project/node_modules/@types' does not exist, skipping all lookups in it.
 Directory '/users/username/projects/node_modules' does not exist, skipping all lookups in it.
@@ -384,6 +389,7 @@ Reusing resolution of module 'pkg0' from '/users/username/projects/project/fileW
 ======== Resolving module 'pkg1' from '/users/username/projects/project/fileWithImports.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'pkg1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 File '/users/username/projects/project/node_modules/pkg1/package.json' does not exist.
 File '/users/username/projects/project/node_modules/pkg1.ts' does not exist.
 File '/users/username/projects/project/node_modules/pkg1.tsx' does not exist.
@@ -639,6 +645,7 @@ Directory '/users/username/node_modules/@types' does not exist, skipping all loo
 Directory '/users/node_modules/@types' does not exist, skipping all lookups in it.
 Directory '/node_modules/@types' does not exist, skipping all lookups in it.
 Looking up in 'node_modules' folder, initial location '/users/username/projects/project'.
+Searching all ancestor node_modules directories for preferred extensions: Declaration.
 File '/users/username/projects/project/node_modules/pkg3/package.json' does not exist.
 File '/users/username/projects/project/node_modules/pkg3.d.ts' does not exist.
 File '/users/username/projects/project/node_modules/pkg3/index.d.ts' exists - use it as a name resolution result.
diff --git a/tests/baselines/reference/tscWatch/resolutionCache/scoped-package-installation.js b/tests/baselines/reference/tscWatch/resolutionCache/scoped-package-installation.js
index 70dc26de2aafc..b1af0604e5253 100644
--- a/tests/baselines/reference/tscWatch/resolutionCache/scoped-package-installation.js
+++ b/tests/baselines/reference/tscWatch/resolutionCache/scoped-package-installation.js
@@ -38,6 +38,7 @@ FileWatcher:: Added:: WatchInfo: /user/username/projects/myproject/lib/app.ts 25
 ======== Resolving module '@myapp/ts-types' from '/user/username/projects/myproject/lib/app.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module '@myapp/ts-types' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/lib/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'myapp__ts-types'
 Directory '/user/username/projects/myproject/node_modules' does not exist, skipping all lookups in it.
@@ -51,6 +52,7 @@ Scoped package detected, looking in 'myapp__ts-types'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'myapp__ts-types'
 Loading module '@myapp/ts-types' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/user/username/projects/myproject/lib/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/myproject/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/node_modules' does not exist, skipping all lookups in it.
@@ -208,6 +210,7 @@ CreatingProgramWith::
 ======== Resolving module '@myapp/ts-types' from '/user/username/projects/myproject/lib/app.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module '@myapp/ts-types' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/lib/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'myapp__ts-types'
 Directory '/user/username/projects/myproject/node_modules/@types' does not exist, skipping all lookups in it.
@@ -221,6 +224,7 @@ Scoped package detected, looking in 'myapp__ts-types'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'myapp__ts-types'
 Loading module '@myapp/ts-types' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/user/username/projects/myproject/lib/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/projects/node_modules' does not exist, skipping all lookups in it.
 Directory '/user/username/node_modules' does not exist, skipping all lookups in it.
@@ -295,6 +299,7 @@ CreatingProgramWith::
 ======== Resolving module '@myapp/ts-types' from '/user/username/projects/myproject/lib/app.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module '@myapp/ts-types' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/lib/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'myapp__ts-types'
 File '/user/username/projects/myproject/node_modules/@myapp/ts-types.ts' does not exist.
@@ -311,6 +316,7 @@ Scoped package detected, looking in 'myapp__ts-types'
 Directory '/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'myapp__ts-types'
 Loading module '@myapp/ts-types' from 'node_modules' folder, target file types: JavaScript.
+Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Directory '/user/username/projects/myproject/lib/node_modules' does not exist, skipping all lookups in it.
 File '/user/username/projects/myproject/node_modules/@myapp/ts-types.js' does not exist.
 File '/user/username/projects/myproject/node_modules/@myapp/ts-types.jsx' does not exist.
@@ -414,6 +420,7 @@ CreatingProgramWith::
 ======== Resolving module '@myapp/ts-types' from '/user/username/projects/myproject/lib/app.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module '@myapp/ts-types' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/user/username/projects/myproject/lib/node_modules' does not exist, skipping all lookups in it.
 Scoped package detected, looking in 'myapp__ts-types'
 File '/user/username/projects/myproject/node_modules/@myapp/ts-types/package.json' does not exist.
diff --git a/tests/baselines/reference/tscWatch/watchEnvironment/watchDirectories/when-there-are-symlinks-to-folders-in-recursive-folders.js b/tests/baselines/reference/tscWatch/watchEnvironment/watchDirectories/when-there-are-symlinks-to-folders-in-recursive-folders.js
index c5e3bb3392472..0cd148d4e2348 100644
--- a/tests/baselines/reference/tscWatch/watchEnvironment/watchDirectories/when-there-are-symlinks-to-folders-in-recursive-folders.js
+++ b/tests/baselines/reference/tscWatch/watchEnvironment/watchDirectories/when-there-are-symlinks-to-folders-in-recursive-folders.js
@@ -44,6 +44,7 @@ FileWatcher:: Added:: WatchInfo: /home/user/projects/myproject/src/file.ts 250 u
 ======== Resolving module 'a' from '/home/user/projects/myproject/src/file.ts'. ========
 Module resolution kind is not specified, using 'Node10'.
 Loading module 'a' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Directory '/home/user/projects/myproject/src/node_modules' does not exist, skipping all lookups in it.
 File '/home/user/projects/myproject/node_modules/a/package.json' does not exist.
 File '/home/user/projects/myproject/node_modules/a.ts' does not exist.
diff --git a/tests/baselines/reference/tsserver/libraryResolution/with-config-with-redirection.js b/tests/baselines/reference/tsserver/libraryResolution/with-config-with-redirection.js
index 794b9ff5064d8..ae8695d5f849f 100644
--- a/tests/baselines/reference/tsserver/libraryResolution/with-config-with-redirection.js
+++ b/tests/baselines/reference/tsserver/libraryResolution/with-config-with-redirection.js
@@ -180,6 +180,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /home/src/projects
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -200,6 +201,7 @@ Info seq  [hh:mm:ss:mss] Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /ho
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-scripthost'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-scripthost/package.json' does not exist.
@@ -214,6 +216,7 @@ Info seq  [hh:mm:ss:mss] ======== Module name '@typescript/lib-scripthost' was s
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-es5'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-es5/package.json' does not exist.
@@ -237,6 +240,7 @@ Info seq  [hh:mm:ss:mss] Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /ho
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -353,6 +357,7 @@ Info seq  [hh:mm:ss:mss] Reusing resolution of type reference directive 'sometyp
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -371,6 +376,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-do
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
@@ -655,6 +661,7 @@ Info seq  [hh:mm:ss:mss] Reusing resolution of module '@typescript/lib-es5' from
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -890,6 +897,7 @@ Info seq  [hh:mm:ss:mss] ======== Type reference directive 'sometype' was succes
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -908,6 +916,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-do
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
@@ -1024,6 +1033,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /home/src/projects
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -1042,6 +1052,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-we
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
@@ -1167,6 +1178,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /home/src/projects
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
diff --git a/tests/baselines/reference/tsserver/libraryResolution/with-config.js b/tests/baselines/reference/tsserver/libraryResolution/with-config.js
index 42f04c994ce7d..7df3226f097cd 100644
--- a/tests/baselines/reference/tsserver/libraryResolution/with-config.js
+++ b/tests/baselines/reference/tsserver/libraryResolution/with-config.js
@@ -141,6 +141,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /home/src/projects
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker.ts' does not exist.
@@ -155,6 +156,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-we
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker.jsx' does not exist.
@@ -170,6 +172,7 @@ Info seq  [hh:mm:ss:mss] FileWatcher:: Added:: WatchInfo: /home/src/lib/lib.webw
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-scripthost' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-scripthost'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-scripthost.ts' does not exist.
@@ -184,6 +187,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-sc
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-scripthost'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-scripthost.js' does not exist.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-scripthost.jsx' does not exist.
@@ -195,6 +199,7 @@ Info seq  [hh:mm:ss:mss] FileWatcher:: Added:: WatchInfo: /home/src/lib/lib.scri
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-es5' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-es5'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-es5.ts' does not exist.
@@ -209,6 +214,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-es
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-es5'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-es5.js' does not exist.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-es5.jsx' does not exist.
@@ -229,6 +235,7 @@ Info seq  [hh:mm:ss:mss] Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /ho
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom.ts' does not exist.
@@ -243,6 +250,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-do
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom.jsx' does not exist.
@@ -372,6 +380,7 @@ Info seq  [hh:mm:ss:mss] Reusing resolution of module '@typescript/lib-es5' from
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -632,6 +641,7 @@ Info seq  [hh:mm:ss:mss] Reusing resolution of type reference directive 'sometyp
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -650,6 +660,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-do
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom.js' does not exist.
@@ -887,6 +898,7 @@ Info seq  [hh:mm:ss:mss] ======== Type reference directive 'sometype' was succes
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-dom' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-dom'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-dom/package.json' does not exist.
@@ -1027,6 +1039,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /home/src/projects
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -1116,6 +1129,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /home/src/projects
 Info seq  [hh:mm:ss:mss] ======== Resolving module '@typescript/lib-webworker' from '/home/src/projects/project1/__lib_node_modules_lookup_lib.webworker.d.ts__.ts'. ========
 Info seq  [hh:mm:ss:mss] Explicitly specified module resolution kind: 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist.
@@ -1134,6 +1148,7 @@ Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-we
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Scoped package detected, looking in 'typescript__lib-webworker'
 Info seq  [hh:mm:ss:mss] Loading module '@typescript/lib-webworker' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/project1/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/node_modules/@typescript/lib-webworker.js' does not exist.
diff --git a/tests/baselines/reference/tsserver/moduleResolution/node10Result.js b/tests/baselines/reference/tsserver/moduleResolution/node10Result.js
index 15a3cbb7284a8..e1c3b3d4766dc 100644
--- a/tests/baselines/reference/tsserver/moduleResolution/node10Result.js
+++ b/tests/baselines/reference/tsserver/moduleResolution/node10Result.js
@@ -187,6 +187,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -201,6 +202,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -216,6 +218,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
@@ -232,6 +235,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/bar/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -250,6 +254,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -265,6 +270,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
@@ -297,6 +303,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'types'.
@@ -315,6 +322,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/bar2/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -708,6 +716,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -726,6 +735,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -741,6 +751,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'types' field.
@@ -867,6 +878,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -881,6 +893,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -896,6 +909,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
@@ -1091,6 +1105,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -1109,6 +1124,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -1124,6 +1140,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'types' field.
@@ -1319,6 +1336,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -1333,6 +1351,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -1348,6 +1367,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
@@ -1538,6 +1558,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -1745,6 +1766,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/foo/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'types'.
@@ -1967,6 +1989,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -1985,6 +2008,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2000,6 +2024,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
@@ -2242,6 +2267,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2256,6 +2282,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2271,6 +2298,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
@@ -2463,6 +2491,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2481,6 +2510,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2496,6 +2526,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'types' field.
@@ -2702,6 +2733,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2716,6 +2748,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2731,6 +2764,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
@@ -2926,6 +2960,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2944,6 +2979,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -2959,6 +2995,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'bar2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/bar2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'types' field.
@@ -3154,6 +3191,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, JavaScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Found 'package.json' at '/home/src/projects/project/node_modules/foo2/package.json'.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -3168,6 +3206,7 @@ Info seq  [hh:mm:ss:mss] Directory '/home/src/projects/node_modules' does not ex
 Info seq  [hh:mm:ss:mss] Directory '/home/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/home/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Entering conditional exports.
 Info seq  [hh:mm:ss:mss] Matched 'exports' condition 'import'.
@@ -3183,6 +3222,7 @@ Info seq  [hh:mm:ss:mss] File '/home/src/package.json' does not exist according
 Info seq  [hh:mm:ss:mss] File '/home/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] Loading module 'foo2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/home/src/projects/project/node_modules/foo2/package.json' exists according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typesVersions' field.
 Info seq  [hh:mm:ss:mss] 'package.json' does not have a 'typings' field.
diff --git a/tests/baselines/reference/tsserver/resolutionCache/avoid-unnecessary-lookup-invalidation-on-save.js b/tests/baselines/reference/tsserver/resolutionCache/avoid-unnecessary-lookup-invalidation-on-save.js
index f812e83e6fa1f..930122f4a1c8c 100644
--- a/tests/baselines/reference/tsserver/resolutionCache/avoid-unnecessary-lookup-invalidation-on-save.js
+++ b/tests/baselines/reference/tsserver/resolutionCache/avoid-unnecessary-lookup-invalidation-on-save.js
@@ -46,6 +46,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /user/username/pro
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module1/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module1.ts' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module1.tsx' does not exist.
@@ -56,6 +57,7 @@ Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolve
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module2.ts' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module2.tsx' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module2.d.ts' does not exist.
diff --git a/tests/baselines/reference/tsserver/resolutionCache/can-load-typings-that-are-proper-modules.js b/tests/baselines/reference/tsserver/resolutionCache/can-load-typings-that-are-proper-modules.js
index 295851a44cb58..d2f420f6efc66 100644
--- a/tests/baselines/reference/tsserver/resolutionCache/can-load-typings-that-are-proper-modules.js
+++ b/tests/baselines/reference/tsserver/resolutionCache/can-load-typings-that-are-proper-modules.js
@@ -14,10 +14,12 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /dev/null/inferred
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'lib' from '/a/b/app.js'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'lib' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/a/b/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/a/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Loading module 'lib' from 'node_modules' folder, target file types: JavaScript.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for fallback extensions: JavaScript.
 Info seq  [hh:mm:ss:mss] Directory '/a/b/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/a/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Directory '/node_modules' does not exist, skipping all lookups in it.
diff --git a/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-different-folders.js b/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-different-folders.js
index e5a51bb472d41..60cc560d44c66 100644
--- a/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-different-folders.js
+++ b/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-different-folders.js
@@ -61,6 +61,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /user/username/pro
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module1/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module1.ts' does not exist.
@@ -72,6 +73,7 @@ Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolve
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module2.ts' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module2.tsx' does not exist.
@@ -91,36 +93,42 @@ Info seq  [hh:mm:ss:mss] Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /us
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/src/feature/file2.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/feature/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module1' was found in cache from location '/user/username/projects/myproject/product/src'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolved to '/user/username/projects/myproject/product/node_modules/module1/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/src/feature/file2.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/feature/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module2' was found in cache from location '/user/username/projects/myproject/product/src'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module2' was successfully resolved to '/user/username/projects/myproject/node_modules/module2/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/test/file4.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module1' was found in cache from location '/user/username/projects/myproject/product'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolved to '/user/username/projects/myproject/product/node_modules/module1/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/test/file4.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module2' was found in cache from location '/user/username/projects/myproject/product'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module2' was successfully resolved to '/user/username/projects/myproject/node_modules/module2/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/test/src/file3.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module1' was found in cache from location '/user/username/projects/myproject/product/test'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolved to '/user/username/projects/myproject/product/node_modules/module1/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/test/src/file3.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module2' was found in cache from location '/user/username/projects/myproject/product/test'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module2' was successfully resolved to '/user/username/projects/myproject/node_modules/module2/index.ts'. ========
diff --git a/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-same-folder.js b/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-same-folder.js
index 8edbcc8788168..a1788db7ef12d 100644
--- a/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-same-folder.js
+++ b/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-files-in-same-folder.js
@@ -51,6 +51,7 @@ Info seq  [hh:mm:ss:mss] Starting updateGraphWorker: Project: /user/username/pro
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module1/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module1.ts' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module1.tsx' does not exist.
@@ -61,6 +62,7 @@ Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolve
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module2.ts' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module2.tsx' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/src/node_modules/module2.d.ts' does not exist.
diff --git a/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-inferred-project.js b/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-inferred-project.js
index 31ebe3a10bc31..1b484e79eac9c 100644
--- a/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-inferred-project.js
+++ b/tests/baselines/reference/tsserver/resolutionCache/non-relative-module-name-from-inferred-project.js
@@ -60,6 +60,7 @@ Info seq  [hh:mm:ss:mss] ======== Module name '../test/src/file3' was successful
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module1/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module1.ts' does not exist.
@@ -71,6 +72,7 @@ Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolve
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/src/file1.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module2.ts' does not exist.
 Info seq  [hh:mm:ss:mss] File '/user/username/projects/myproject/product/node_modules/module2.tsx' does not exist.
@@ -87,12 +89,14 @@ Info seq  [hh:mm:ss:mss] FileWatcher:: Added:: WatchInfo: /user/username/project
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/src/feature/file2.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/feature/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module1' was found in cache from location '/user/username/projects/myproject/product/src'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolved to '/user/username/projects/myproject/product/node_modules/module1/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/src/feature/file2.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/src/feature/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module2' was found in cache from location '/user/username/projects/myproject/product/src'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module2' was successfully resolved to '/user/username/projects/myproject/node_modules/module2/index.ts'. ========
@@ -104,12 +108,14 @@ Info seq  [hh:mm:ss:mss] FileWatcher:: Added:: WatchInfo: /user/username/project
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/test/file4.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module1' was found in cache from location '/user/username/projects/myproject/product'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolved to '/user/username/projects/myproject/product/node_modules/module1/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/test/file4.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module2' was found in cache from location '/user/username/projects/myproject/product'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module2' was successfully resolved to '/user/username/projects/myproject/node_modules/module2/index.ts'. ========
@@ -117,12 +123,14 @@ Info seq  [hh:mm:ss:mss] FileWatcher:: Added:: WatchInfo: /user/username/project
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module1' from '/user/username/projects/myproject/product/test/src/file3.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module1' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module1' was found in cache from location '/user/username/projects/myproject/product/test'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module1' was successfully resolved to '/user/username/projects/myproject/product/node_modules/module1/index.ts'. ========
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'module2' from '/user/username/projects/myproject/product/test/src/file3.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'module2' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/user/username/projects/myproject/product/test/src/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'module2' was found in cache from location '/user/username/projects/myproject/product/test'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'module2' was successfully resolved to '/user/username/projects/myproject/node_modules/module2/index.ts'. ========
diff --git a/tests/baselines/reference/tsserver/resolutionCache/not-sharing-across-references.js b/tests/baselines/reference/tsserver/resolutionCache/not-sharing-across-references.js
index e69fa1943df69..5154fe405472c 100644
--- a/tests/baselines/reference/tsserver/resolutionCache/not-sharing-across-references.js
+++ b/tests/baselines/reference/tsserver/resolutionCache/not-sharing-across-references.js
@@ -81,6 +81,7 @@ Info seq  [hh:mm:ss:mss] Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /us
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'moduleX' from '/users/username/projects/app/appA.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'moduleX' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/users/username/projects/app/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/users/username/projects/node_modules/moduleX/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/users/username/projects/node_modules/moduleX.ts' does not exist.
@@ -103,6 +104,7 @@ Info seq  [hh:mm:ss:mss] ======== Resolving module 'moduleX' from '/users/userna
 Info seq  [hh:mm:ss:mss] Using compiler options of project reference redirect '/users/username/projects/common/tsconfig.json'.
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'moduleX' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/users/username/projects/common/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/users/username/projects/node_modules/moduleX/package.json' does not exist according to earlier cached lookups.
 Info seq  [hh:mm:ss:mss] File '/users/username/projects/node_modules/moduleX.ts' does not exist.
diff --git a/tests/baselines/reference/tsserver/resolutionCache/sharing-across-references.js b/tests/baselines/reference/tsserver/resolutionCache/sharing-across-references.js
index ee0a99fd96c3e..b07eecf34be31 100644
--- a/tests/baselines/reference/tsserver/resolutionCache/sharing-across-references.js
+++ b/tests/baselines/reference/tsserver/resolutionCache/sharing-across-references.js
@@ -80,6 +80,7 @@ Info seq  [hh:mm:ss:mss] Elapsed:: *ms DirectoryWatcher:: Added:: WatchInfo: /us
 Info seq  [hh:mm:ss:mss] ======== Resolving module 'moduleX' from '/users/username/projects/app/appA.ts'. ========
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'moduleX' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/users/username/projects/app/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] File '/users/username/projects/node_modules/moduleX/package.json' does not exist.
 Info seq  [hh:mm:ss:mss] File '/users/username/projects/node_modules/moduleX.ts' does not exist.
@@ -102,6 +103,7 @@ Info seq  [hh:mm:ss:mss] ======== Resolving module 'moduleX' from '/users/userna
 Info seq  [hh:mm:ss:mss] Using compiler options of project reference redirect '/users/username/projects/common/tsconfig.json'.
 Info seq  [hh:mm:ss:mss] Module resolution kind is not specified, using 'Node10'.
 Info seq  [hh:mm:ss:mss] Loading module 'moduleX' from 'node_modules' folder, target file types: TypeScript, Declaration.
+Info seq  [hh:mm:ss:mss] Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.
 Info seq  [hh:mm:ss:mss] Directory '/users/username/projects/common/node_modules' does not exist, skipping all lookups in it.
 Info seq  [hh:mm:ss:mss] Resolution for module 'moduleX' was found in cache from location '/users/username/projects'.
 Info seq  [hh:mm:ss:mss] ======== Module name 'moduleX' was successfully resolved to '/users/username/projects/node_modules/moduleX/index.d.ts'. ========
diff --git a/tests/baselines/reference/typeReferenceDirectiveScopedPackageCustomTypeRoot.trace.json b/tests/baselines/reference/typeReferenceDirectiveScopedPackageCustomTypeRoot.trace.json
index 3960f5f0803f1..47435970cf8f0 100644
--- a/tests/baselines/reference/typeReferenceDirectiveScopedPackageCustomTypeRoot.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectiveScopedPackageCustomTypeRoot.trace.json
@@ -45,41 +45,53 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectiveWithFailedFromTypeRoot.trace.json b/tests/baselines/reference/typeReferenceDirectiveWithFailedFromTypeRoot.trace.json
index dfde7949d6bfc..759edd68fc5fb 100644
--- a/tests/baselines/reference/typeReferenceDirectiveWithFailedFromTypeRoot.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectiveWithFailedFromTypeRoot.trace.json
@@ -7,43 +7,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectiveWithTypeAsFile.trace.json b/tests/baselines/reference/typeReferenceDirectiveWithTypeAsFile.trace.json
index 62d09ea6273c0..85b39822233f6 100644
--- a/tests/baselines/reference/typeReferenceDirectiveWithTypeAsFile.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectiveWithTypeAsFile.trace.json
@@ -8,43 +8,55 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives1.trace.json b/tests/baselines/reference/typeReferenceDirectives1.trace.json
index b2df27761886d..3511def32e455 100644
--- a/tests/baselines/reference/typeReferenceDirectives1.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives1.trace.json
@@ -12,49 +12,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives10.trace.json b/tests/baselines/reference/typeReferenceDirectives10.trace.json
index 380a58f592906..207c83eb07ac2 100644
--- a/tests/baselines/reference/typeReferenceDirectives10.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives10.trace.json
@@ -19,49 +19,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives11.trace.json b/tests/baselines/reference/typeReferenceDirectives11.trace.json
index 9616f2f5c3713..8808f1f82d363 100644
--- a/tests/baselines/reference/typeReferenceDirectives11.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives11.trace.json
@@ -14,49 +14,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives12.trace.json b/tests/baselines/reference/typeReferenceDirectives12.trace.json
index 03014ede8e08e..e5d424d1a27ea 100644
--- a/tests/baselines/reference/typeReferenceDirectives12.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives12.trace.json
@@ -25,49 +25,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives13.trace.json b/tests/baselines/reference/typeReferenceDirectives13.trace.json
index 380a58f592906..207c83eb07ac2 100644
--- a/tests/baselines/reference/typeReferenceDirectives13.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives13.trace.json
@@ -19,49 +19,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives2.trace.json b/tests/baselines/reference/typeReferenceDirectives2.trace.json
index b2a5f125299d5..816082ac3ff1a 100644
--- a/tests/baselines/reference/typeReferenceDirectives2.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives2.trace.json
@@ -9,49 +9,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives3.trace.json b/tests/baselines/reference/typeReferenceDirectives3.trace.json
index b2df27761886d..3511def32e455 100644
--- a/tests/baselines/reference/typeReferenceDirectives3.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives3.trace.json
@@ -12,49 +12,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives4.trace.json b/tests/baselines/reference/typeReferenceDirectives4.trace.json
index b2df27761886d..3511def32e455 100644
--- a/tests/baselines/reference/typeReferenceDirectives4.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives4.trace.json
@@ -12,49 +12,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives5.trace.json b/tests/baselines/reference/typeReferenceDirectives5.trace.json
index 380a58f592906..207c83eb07ac2 100644
--- a/tests/baselines/reference/typeReferenceDirectives5.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives5.trace.json
@@ -19,49 +19,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives6.trace.json b/tests/baselines/reference/typeReferenceDirectives6.trace.json
index b2df27761886d..3511def32e455 100644
--- a/tests/baselines/reference/typeReferenceDirectives6.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives6.trace.json
@@ -12,49 +12,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives7.trace.json b/tests/baselines/reference/typeReferenceDirectives7.trace.json
index b2df27761886d..3511def32e455 100644
--- a/tests/baselines/reference/typeReferenceDirectives7.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives7.trace.json
@@ -12,49 +12,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives8.trace.json b/tests/baselines/reference/typeReferenceDirectives8.trace.json
index 9616f2f5c3713..8808f1f82d363 100644
--- a/tests/baselines/reference/typeReferenceDirectives8.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives8.trace.json
@@ -14,49 +14,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeReferenceDirectives9.trace.json b/tests/baselines/reference/typeReferenceDirectives9.trace.json
index 03014ede8e08e..e5d424d1a27ea 100644
--- a/tests/baselines/reference/typeReferenceDirectives9.trace.json
+++ b/tests/baselines/reference/typeReferenceDirectives9.trace.json
@@ -25,49 +25,61 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeRootsFromMultipleNodeModulesDirectories.trace.json b/tests/baselines/reference/typeRootsFromMultipleNodeModulesDirectories.trace.json
index fb4fca7e833f4..f620afce87e93 100644
--- a/tests/baselines/reference/typeRootsFromMultipleNodeModulesDirectories.trace.json
+++ b/tests/baselines/reference/typeRootsFromMultipleNodeModulesDirectories.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'xyz' from '/foo/bar/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'xyz' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "File '/foo/node_modules/xyz.ts' does not exist.",
     "File '/foo/node_modules/xyz.tsx' does not exist.",
@@ -12,6 +13,7 @@
     "File '/node_modules/xyz.d.ts' does not exist.",
     "File '/node_modules/@types/xyz.d.ts' does not exist.",
     "Loading module 'xyz' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "File '/foo/node_modules/xyz.js' does not exist.",
     "File '/foo/node_modules/xyz.jsx' does not exist.",
@@ -21,6 +23,7 @@
     "======== Resolving module 'pdq' from '/foo/bar/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'pdq' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "File '/foo/node_modules/pdq.ts' does not exist.",
     "File '/foo/node_modules/pdq.tsx' does not exist.",
@@ -31,6 +34,7 @@
     "File '/node_modules/pdq.d.ts' does not exist.",
     "File '/node_modules/@types/pdq.d.ts' does not exist.",
     "Loading module 'pdq' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "File '/foo/node_modules/pdq.js' does not exist.",
     "File '/foo/node_modules/pdq.jsx' does not exist.",
@@ -40,6 +44,7 @@
     "======== Resolving module 'abc' from '/foo/bar/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'abc' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "File '/foo/node_modules/abc.ts' does not exist.",
     "File '/foo/node_modules/abc.tsx' does not exist.",
@@ -50,6 +55,7 @@
     "File '/node_modules/abc.d.ts' does not exist.",
     "File '/node_modules/@types/abc.d.ts' does not exist.",
     "Loading module 'abc' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "File '/foo/node_modules/abc.js' does not exist.",
     "File '/foo/node_modules/abc.jsx' does not exist.",
@@ -80,6 +86,7 @@
     "======== Resolving module '@typescript/lib-es5' from '/foo/bar/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
@@ -87,11 +94,13 @@
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/foo/bar/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
@@ -99,21 +108,25 @@
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/foo/bar/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/foo/bar/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
@@ -121,21 +134,25 @@
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/foo/bar/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/foo/bar/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
@@ -143,6 +160,7 @@
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/foo/bar/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typeRootsFromNodeModulesInParentDirectory.trace.json b/tests/baselines/reference/typeRootsFromNodeModulesInParentDirectory.trace.json
index 82b1605ff167f..5d97aa0870b61 100644
--- a/tests/baselines/reference/typeRootsFromNodeModulesInParentDirectory.trace.json
+++ b/tests/baselines/reference/typeRootsFromNodeModulesInParentDirectory.trace.json
@@ -2,12 +2,14 @@
     "======== Resolving module 'xyz' from '/src/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'xyz' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/xyz.ts' does not exist.",
     "File '/node_modules/xyz.tsx' does not exist.",
     "File '/node_modules/xyz.d.ts' does not exist.",
     "File '/node_modules/@types/xyz.d.ts' does not exist.",
     "Loading module 'xyz' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "File '/node_modules/xyz.js' does not exist.",
     "File '/node_modules/xyz.jsx' does not exist.",
@@ -22,59 +24,71 @@
     "======== Resolving module '@typescript/lib-es5' from '/src/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/src/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/src/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/src/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/src/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/src/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory '/src/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typesVersions.ambientModules.trace.json b/tests/baselines/reference/typesVersions.ambientModules.trace.json
index 9df3dd7ccabeb..6ac6bf80d3701 100644
--- a/tests/baselines/reference/typesVersions.ambientModules.trace.json
+++ b/tests/baselines/reference/typesVersions.ambientModules.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'ext' from 'tests/cases/conformance/moduleResolution/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/conformance/moduleResolution/node_modules/ext/package.json'.",
     "File 'tests/cases/conformance/moduleResolution/node_modules/ext.ts' does not exist.",
     "File 'tests/cases/conformance/moduleResolution/node_modules/ext.tsx' does not exist.",
@@ -22,6 +23,7 @@
     "======== Resolving module 'ext/other' from 'tests/cases/conformance/moduleResolution/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/moduleResolution/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "Module name 'other', matched pattern '*'.",
@@ -42,6 +44,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File 'tests/cases/conformance/moduleResolution/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "Module name 'other', matched pattern '*'.",
@@ -62,6 +65,7 @@
     "======== Resolving module '@typescript/lib-esnext' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -73,6 +77,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -81,6 +86,7 @@
     "======== Resolving module '@typescript/lib-es2023' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -92,6 +98,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -100,6 +107,7 @@
     "======== Resolving module '@typescript/lib-es2022' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -111,6 +119,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -119,6 +128,7 @@
     "======== Resolving module '@typescript/lib-es2021' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -130,6 +140,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -138,6 +149,7 @@
     "======== Resolving module '@typescript/lib-es2020' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -149,6 +161,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -157,6 +170,7 @@
     "======== Resolving module '@typescript/lib-es2019' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -168,6 +182,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -176,6 +191,7 @@
     "======== Resolving module '@typescript/lib-es2018' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -187,6 +203,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -195,6 +212,7 @@
     "======== Resolving module '@typescript/lib-es2017' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -206,6 +224,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -214,6 +233,7 @@
     "======== Resolving module '@typescript/lib-es2016' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -225,6 +245,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -233,6 +254,7 @@
     "======== Resolving module '@typescript/lib-es2015' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -244,6 +266,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -252,6 +275,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -263,6 +287,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -271,6 +296,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -282,6 +308,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -290,6 +317,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -301,6 +329,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -309,6 +338,7 @@
     "======== Resolving module '@typescript/lib-es2015/core' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -320,6 +350,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -328,6 +359,7 @@
     "======== Resolving module '@typescript/lib-es2015/collection' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -339,6 +371,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -347,6 +380,7 @@
     "======== Resolving module '@typescript/lib-es2015/iterable' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -358,6 +392,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -366,6 +401,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -377,6 +413,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -385,6 +422,7 @@
     "======== Resolving module '@typescript/lib-es2015/generator' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -396,6 +434,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -404,6 +443,7 @@
     "======== Resolving module '@typescript/lib-es2015/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -415,6 +455,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -423,6 +464,7 @@
     "======== Resolving module '@typescript/lib-es2015/proxy' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -434,6 +476,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -442,6 +485,7 @@
     "======== Resolving module '@typescript/lib-es2015/reflect' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -453,6 +497,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -461,6 +506,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -472,6 +518,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -480,6 +527,7 @@
     "======== Resolving module '@typescript/lib-es2016/array-include' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -491,6 +539,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -499,6 +548,7 @@
     "======== Resolving module '@typescript/lib-es2017/object' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -510,6 +560,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -518,6 +569,7 @@
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -529,6 +581,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -537,6 +590,7 @@
     "======== Resolving module '@typescript/lib-es2017/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -548,6 +602,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -556,6 +611,7 @@
     "======== Resolving module '@typescript/lib-es2017/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -567,6 +623,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -575,6 +632,7 @@
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -586,6 +644,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -594,6 +653,7 @@
     "======== Resolving module '@typescript/lib-es2017/date' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -605,6 +665,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -613,6 +674,7 @@
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -624,6 +686,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -632,6 +695,7 @@
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -643,6 +707,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -651,6 +716,7 @@
     "======== Resolving module '@typescript/lib-es2018/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -662,6 +728,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -670,6 +737,7 @@
     "======== Resolving module '@typescript/lib-es2018/regexp' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -681,6 +749,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -689,6 +758,7 @@
     "======== Resolving module '@typescript/lib-es2018/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -700,6 +770,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -708,6 +779,7 @@
     "======== Resolving module '@typescript/lib-es2019/array' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -719,6 +791,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -727,6 +800,7 @@
     "======== Resolving module '@typescript/lib-es2019/object' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -738,6 +812,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -746,6 +821,7 @@
     "======== Resolving module '@typescript/lib-es2019/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -757,6 +833,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -765,6 +842,7 @@
     "======== Resolving module '@typescript/lib-es2019/symbol' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -776,6 +854,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -784,6 +863,7 @@
     "======== Resolving module '@typescript/lib-es2019/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -795,6 +875,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -803,6 +884,7 @@
     "======== Resolving module '@typescript/lib-es2020/bigint' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -814,6 +896,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -822,6 +905,7 @@
     "======== Resolving module '@typescript/lib-es2020/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -833,6 +917,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -841,6 +926,7 @@
     "======== Resolving module '@typescript/lib-es2020/date' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -852,6 +938,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -860,6 +947,7 @@
     "======== Resolving module '@typescript/lib-es2020/number' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -871,6 +959,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -879,6 +968,7 @@
     "======== Resolving module '@typescript/lib-es2020/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -890,6 +980,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -898,6 +989,7 @@
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -909,6 +1001,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -917,6 +1010,7 @@
     "======== Resolving module '@typescript/lib-es2020/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -928,6 +1022,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -936,6 +1031,7 @@
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -947,6 +1043,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -955,6 +1052,7 @@
     "======== Resolving module '@typescript/lib-es2021/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -966,6 +1064,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -974,6 +1073,7 @@
     "======== Resolving module '@typescript/lib-es2021/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -985,6 +1085,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -993,6 +1094,7 @@
     "======== Resolving module '@typescript/lib-es2021/weakref' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1004,6 +1106,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1012,6 +1115,7 @@
     "======== Resolving module '@typescript/lib-es2021/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1023,6 +1127,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1031,6 +1136,7 @@
     "======== Resolving module '@typescript/lib-es2022/array' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1042,6 +1148,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1050,6 +1157,7 @@
     "======== Resolving module '@typescript/lib-es2022/error' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1061,6 +1169,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1069,6 +1178,7 @@
     "======== Resolving module '@typescript/lib-es2022/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1080,6 +1190,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1088,6 +1199,7 @@
     "======== Resolving module '@typescript/lib-es2022/object' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1099,6 +1211,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1107,6 +1220,7 @@
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1118,6 +1232,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1126,6 +1241,7 @@
     "======== Resolving module '@typescript/lib-es2022/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1137,6 +1253,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1145,6 +1262,7 @@
     "======== Resolving module '@typescript/lib-es2022/regexp' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1156,6 +1274,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1164,6 +1283,7 @@
     "======== Resolving module '@typescript/lib-es2023/array' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1175,6 +1295,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1183,6 +1304,7 @@
     "======== Resolving module '@typescript/lib-esnext/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1194,6 +1316,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1202,6 +1325,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1213,6 +1337,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1221,6 +1346,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1232,6 +1358,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1240,6 +1367,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1251,6 +1379,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1259,6 +1388,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1270,6 +1400,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/typesVersions.emptyTypes.trace.json b/tests/baselines/reference/typesVersions.emptyTypes.trace.json
index 12537e89b760a..cc67963945a52 100644
--- a/tests/baselines/reference/typesVersions.emptyTypes.trace.json
+++ b/tests/baselines/reference/typesVersions.emptyTypes.trace.json
@@ -24,704 +24,832 @@
     "======== Resolving module '@typescript/lib-esnext' from '__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-esnext' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2023' from '__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2023' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022' from '__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021' from '__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020' from '__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019' from '__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018' from '__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017' from '__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2016' from '__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2016' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015' from '__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/core' from '__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/core' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/collection' from '__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/collection' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/iterable' from '__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/iterable' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol' from '__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/symbol' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/generator' from '__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/generator' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/promise' from '__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/proxy' from '__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/proxy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/reflect' from '__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/reflect' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from '__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/symbol-wellknown' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2016/array-include' from '__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2016/array-include' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/object' from '__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/object' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from '__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/sharedmemory' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/string' from '__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/intl' from '__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from '__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/typedarrays' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/date' from '__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/date' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from '__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/asynciterable' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from '__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/asyncgenerator' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/promise' from '__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/regexp' from '__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/regexp' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/intl' from '__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/array' from '__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/array' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/object' from '__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/object' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/string' from '__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/symbol' from '__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/symbol' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/intl' from '__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/bigint' from '__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/bigint' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/intl' from '__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/date' from '__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/date' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/number' from '__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/number' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/promise' from '__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from '__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/sharedmemory' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/string' from '__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from '__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/symbol-wellknown' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/promise' from '__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/string' from '__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/weakref' from '__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/weakref' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/intl' from '__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/array' from '__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/array' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/error' from '__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/error' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/intl' from '__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/object' from '__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/object' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from '__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/sharedmemory' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/string' from '__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/regexp' from '__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/regexp' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2023/array' from '__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2023/array' was not resolved. ========",
     "======== Resolving module '@typescript/lib-esnext/intl' from '__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-esnext/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom/iterable' from '__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom/iterable' was not resolved. ========"
diff --git a/tests/baselines/reference/typesVersions.justIndex.trace.json b/tests/baselines/reference/typesVersions.justIndex.trace.json
index de3fded852129..91f5dffc7c246 100644
--- a/tests/baselines/reference/typesVersions.justIndex.trace.json
+++ b/tests/baselines/reference/typesVersions.justIndex.trace.json
@@ -24,704 +24,832 @@
     "======== Resolving module '@typescript/lib-esnext' from '__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-esnext' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2023' from '__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2023' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022' from '__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021' from '__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020' from '__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019' from '__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018' from '__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017' from '__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2016' from '__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2016' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015' from '__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es5' from '__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/core' from '__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/core' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/collection' from '__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/collection' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/iterable' from '__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/iterable' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol' from '__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/symbol' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/generator' from '__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/generator' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/promise' from '__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/proxy' from '__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/proxy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/reflect' from '__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/reflect' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from '__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2015/symbol-wellknown' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2016/array-include' from '__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2016/array-include' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/object' from '__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/object' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from '__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/sharedmemory' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/string' from '__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/intl' from '__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from '__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/typedarrays' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2017/date' from '__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2017/date' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from '__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/asynciterable' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from '__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/asyncgenerator' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/promise' from '__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/regexp' from '__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/regexp' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2018/intl' from '__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2018/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/array' from '__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/array' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/object' from '__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/object' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/string' from '__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/symbol' from '__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/symbol' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2019/intl' from '__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2019/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/bigint' from '__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/bigint' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/intl' from '__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/date' from '__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/date' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/number' from '__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/number' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/promise' from '__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from '__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/sharedmemory' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/string' from '__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from '__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2020/symbol-wellknown' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/promise' from '__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/promise' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/string' from '__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/weakref' from '__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/weakref' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2021/intl' from '__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2021/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/array' from '__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/array' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/error' from '__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/error' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/intl' from '__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/object' from '__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/object' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from '__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/sharedmemory' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/string' from '__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/string' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2022/regexp' from '__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2022/regexp' was not resolved. ========",
     "======== Resolving module '@typescript/lib-es2023/array' from '__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-es2023/array' was not resolved. ========",
     "======== Resolving module '@typescript/lib-esnext/intl' from '__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-esnext/intl' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom/iterable' from '__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "======== Module name '@typescript/lib-dom/iterable' was not resolved. ========"
diff --git a/tests/baselines/reference/typesVersions.multiFile.trace.json b/tests/baselines/reference/typesVersions.multiFile.trace.json
index 0170cd94c8511..865721eccb304 100644
--- a/tests/baselines/reference/typesVersions.multiFile.trace.json
+++ b/tests/baselines/reference/typesVersions.multiFile.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'ext' from 'tests/cases/conformance/moduleResolution/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/conformance/moduleResolution/node_modules/ext/package.json'.",
     "File 'tests/cases/conformance/moduleResolution/node_modules/ext.ts' does not exist.",
     "File 'tests/cases/conformance/moduleResolution/node_modules/ext.tsx' does not exist.",
@@ -22,6 +23,7 @@
     "======== Resolving module 'ext/other' from 'tests/cases/conformance/moduleResolution/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/moduleResolution/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "Module name 'other', matched pattern '*'.",
@@ -34,6 +36,7 @@
     "======== Resolving module '@typescript/lib-esnext' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -45,6 +48,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -53,6 +57,7 @@
     "======== Resolving module '@typescript/lib-es2023' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -64,6 +69,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -72,6 +78,7 @@
     "======== Resolving module '@typescript/lib-es2022' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -83,6 +90,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -91,6 +99,7 @@
     "======== Resolving module '@typescript/lib-es2021' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -102,6 +111,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -110,6 +120,7 @@
     "======== Resolving module '@typescript/lib-es2020' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -121,6 +132,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -129,6 +141,7 @@
     "======== Resolving module '@typescript/lib-es2019' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -140,6 +153,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -148,6 +162,7 @@
     "======== Resolving module '@typescript/lib-es2018' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -159,6 +174,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -167,6 +183,7 @@
     "======== Resolving module '@typescript/lib-es2017' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -178,6 +195,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -186,6 +204,7 @@
     "======== Resolving module '@typescript/lib-es2016' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -197,6 +216,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -205,6 +225,7 @@
     "======== Resolving module '@typescript/lib-es2015' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -216,6 +237,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -224,6 +246,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -235,6 +258,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -243,6 +267,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -254,6 +279,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -262,6 +288,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -273,6 +300,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -281,6 +309,7 @@
     "======== Resolving module '@typescript/lib-es2015/core' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -292,6 +321,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -300,6 +330,7 @@
     "======== Resolving module '@typescript/lib-es2015/collection' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -311,6 +342,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -319,6 +351,7 @@
     "======== Resolving module '@typescript/lib-es2015/iterable' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -330,6 +363,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -338,6 +372,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -349,6 +384,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -357,6 +393,7 @@
     "======== Resolving module '@typescript/lib-es2015/generator' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -368,6 +405,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -376,6 +414,7 @@
     "======== Resolving module '@typescript/lib-es2015/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -387,6 +426,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -395,6 +435,7 @@
     "======== Resolving module '@typescript/lib-es2015/proxy' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -406,6 +447,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -414,6 +456,7 @@
     "======== Resolving module '@typescript/lib-es2015/reflect' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -425,6 +468,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -433,6 +477,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -444,6 +489,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -452,6 +498,7 @@
     "======== Resolving module '@typescript/lib-es2016/array-include' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -463,6 +510,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -471,6 +519,7 @@
     "======== Resolving module '@typescript/lib-es2017/object' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -482,6 +531,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -490,6 +540,7 @@
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -501,6 +552,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -509,6 +561,7 @@
     "======== Resolving module '@typescript/lib-es2017/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -520,6 +573,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -528,6 +582,7 @@
     "======== Resolving module '@typescript/lib-es2017/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -539,6 +594,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -547,6 +603,7 @@
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -558,6 +615,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -566,6 +624,7 @@
     "======== Resolving module '@typescript/lib-es2017/date' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -577,6 +636,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -585,6 +645,7 @@
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -596,6 +657,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -604,6 +666,7 @@
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -615,6 +678,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -623,6 +687,7 @@
     "======== Resolving module '@typescript/lib-es2018/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -634,6 +699,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -642,6 +708,7 @@
     "======== Resolving module '@typescript/lib-es2018/regexp' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -653,6 +720,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -661,6 +729,7 @@
     "======== Resolving module '@typescript/lib-es2018/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -672,6 +741,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -680,6 +750,7 @@
     "======== Resolving module '@typescript/lib-es2019/array' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -691,6 +762,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -699,6 +771,7 @@
     "======== Resolving module '@typescript/lib-es2019/object' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -710,6 +783,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -718,6 +792,7 @@
     "======== Resolving module '@typescript/lib-es2019/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -729,6 +804,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -737,6 +813,7 @@
     "======== Resolving module '@typescript/lib-es2019/symbol' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -748,6 +825,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -756,6 +834,7 @@
     "======== Resolving module '@typescript/lib-es2019/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -767,6 +846,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -775,6 +855,7 @@
     "======== Resolving module '@typescript/lib-es2020/bigint' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -786,6 +867,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -794,6 +876,7 @@
     "======== Resolving module '@typescript/lib-es2020/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -805,6 +888,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -813,6 +897,7 @@
     "======== Resolving module '@typescript/lib-es2020/date' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -824,6 +909,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -832,6 +918,7 @@
     "======== Resolving module '@typescript/lib-es2020/number' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -843,6 +930,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -851,6 +939,7 @@
     "======== Resolving module '@typescript/lib-es2020/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -862,6 +951,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -870,6 +960,7 @@
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -881,6 +972,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -889,6 +981,7 @@
     "======== Resolving module '@typescript/lib-es2020/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -900,6 +993,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -908,6 +1002,7 @@
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -919,6 +1014,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -927,6 +1023,7 @@
     "======== Resolving module '@typescript/lib-es2021/promise' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -938,6 +1035,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -946,6 +1044,7 @@
     "======== Resolving module '@typescript/lib-es2021/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -957,6 +1056,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -965,6 +1065,7 @@
     "======== Resolving module '@typescript/lib-es2021/weakref' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -976,6 +1077,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -984,6 +1086,7 @@
     "======== Resolving module '@typescript/lib-es2021/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -995,6 +1098,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1003,6 +1107,7 @@
     "======== Resolving module '@typescript/lib-es2022/array' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1014,6 +1119,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1022,6 +1128,7 @@
     "======== Resolving module '@typescript/lib-es2022/error' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1033,6 +1140,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1041,6 +1149,7 @@
     "======== Resolving module '@typescript/lib-es2022/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1052,6 +1161,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1060,6 +1170,7 @@
     "======== Resolving module '@typescript/lib-es2022/object' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1071,6 +1182,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1079,6 +1191,7 @@
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1090,6 +1203,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1098,6 +1212,7 @@
     "======== Resolving module '@typescript/lib-es2022/string' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1109,6 +1224,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1117,6 +1233,7 @@
     "======== Resolving module '@typescript/lib-es2022/regexp' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1128,6 +1245,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1136,6 +1254,7 @@
     "======== Resolving module '@typescript/lib-es2023/array' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1147,6 +1266,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1155,6 +1275,7 @@
     "======== Resolving module '@typescript/lib-esnext/intl' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1166,6 +1287,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1174,6 +1296,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1185,6 +1308,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1193,6 +1317,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1204,6 +1329,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1212,6 +1338,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1223,6 +1350,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1231,6 +1359,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from 'tests/cases/conformance/moduleResolution/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/moduleResolution/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1242,6 +1371,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/typesVersionsDeclarationEmit.ambient.trace.json b/tests/baselines/reference/typesVersionsDeclarationEmit.ambient.trace.json
index bacae14193e56..686d73da4f126 100644
--- a/tests/baselines/reference/typesVersionsDeclarationEmit.ambient.trace.json
+++ b/tests/baselines/reference/typesVersionsDeclarationEmit.ambient.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'ext' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json'.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.ts' does not exist.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.tsx' does not exist.",
@@ -22,6 +23,7 @@
     "======== Resolving module 'ext/other' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "Module name 'other', matched pattern '*'.",
@@ -42,6 +44,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Directory '/node_modules' does not exist, skipping all lookups in it.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "Module name 'other', matched pattern '*'.",
@@ -62,6 +65,7 @@
     "======== Resolving module '@typescript/lib-esnext' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -73,6 +77,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -81,6 +86,7 @@
     "======== Resolving module '@typescript/lib-es2023' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -92,6 +98,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -100,6 +107,7 @@
     "======== Resolving module '@typescript/lib-es2022' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -111,6 +119,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -119,6 +128,7 @@
     "======== Resolving module '@typescript/lib-es2021' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -130,6 +140,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -138,6 +149,7 @@
     "======== Resolving module '@typescript/lib-es2020' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -149,6 +161,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -157,6 +170,7 @@
     "======== Resolving module '@typescript/lib-es2019' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -168,6 +182,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -176,6 +191,7 @@
     "======== Resolving module '@typescript/lib-es2018' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -187,6 +203,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -195,6 +212,7 @@
     "======== Resolving module '@typescript/lib-es2017' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -206,6 +224,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -214,6 +233,7 @@
     "======== Resolving module '@typescript/lib-es2016' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -225,6 +245,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -233,6 +254,7 @@
     "======== Resolving module '@typescript/lib-es2015' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -244,6 +266,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -252,6 +275,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -263,6 +287,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -271,6 +296,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -282,6 +308,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -290,6 +317,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -301,6 +329,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -309,6 +338,7 @@
     "======== Resolving module '@typescript/lib-es2015/core' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -320,6 +350,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -328,6 +359,7 @@
     "======== Resolving module '@typescript/lib-es2015/collection' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -339,6 +371,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -347,6 +380,7 @@
     "======== Resolving module '@typescript/lib-es2015/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -358,6 +392,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -366,6 +401,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -377,6 +413,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -385,6 +422,7 @@
     "======== Resolving module '@typescript/lib-es2015/generator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -396,6 +434,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -404,6 +443,7 @@
     "======== Resolving module '@typescript/lib-es2015/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -415,6 +455,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -423,6 +464,7 @@
     "======== Resolving module '@typescript/lib-es2015/proxy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -434,6 +476,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -442,6 +485,7 @@
     "======== Resolving module '@typescript/lib-es2015/reflect' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -453,6 +497,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -461,6 +506,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -472,6 +518,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -480,6 +527,7 @@
     "======== Resolving module '@typescript/lib-es2016/array-include' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -491,6 +539,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -499,6 +548,7 @@
     "======== Resolving module '@typescript/lib-es2017/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -510,6 +560,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -518,6 +569,7 @@
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -529,6 +581,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -537,6 +590,7 @@
     "======== Resolving module '@typescript/lib-es2017/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -548,6 +602,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -556,6 +611,7 @@
     "======== Resolving module '@typescript/lib-es2017/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -567,6 +623,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -575,6 +632,7 @@
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -586,6 +644,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -594,6 +653,7 @@
     "======== Resolving module '@typescript/lib-es2017/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -605,6 +665,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -613,6 +674,7 @@
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -624,6 +686,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -632,6 +695,7 @@
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -643,6 +707,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -651,6 +716,7 @@
     "======== Resolving module '@typescript/lib-es2018/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -662,6 +728,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -670,6 +737,7 @@
     "======== Resolving module '@typescript/lib-es2018/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -681,6 +749,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -689,6 +758,7 @@
     "======== Resolving module '@typescript/lib-es2018/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -700,6 +770,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -708,6 +779,7 @@
     "======== Resolving module '@typescript/lib-es2019/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -719,6 +791,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -727,6 +800,7 @@
     "======== Resolving module '@typescript/lib-es2019/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -738,6 +812,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -746,6 +821,7 @@
     "======== Resolving module '@typescript/lib-es2019/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -757,6 +833,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -765,6 +842,7 @@
     "======== Resolving module '@typescript/lib-es2019/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -776,6 +854,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -784,6 +863,7 @@
     "======== Resolving module '@typescript/lib-es2019/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -795,6 +875,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -803,6 +884,7 @@
     "======== Resolving module '@typescript/lib-es2020/bigint' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -814,6 +896,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -822,6 +905,7 @@
     "======== Resolving module '@typescript/lib-es2020/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -833,6 +917,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -841,6 +926,7 @@
     "======== Resolving module '@typescript/lib-es2020/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -852,6 +938,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -860,6 +947,7 @@
     "======== Resolving module '@typescript/lib-es2020/number' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -871,6 +959,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -879,6 +968,7 @@
     "======== Resolving module '@typescript/lib-es2020/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -890,6 +980,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -898,6 +989,7 @@
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -909,6 +1001,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -917,6 +1010,7 @@
     "======== Resolving module '@typescript/lib-es2020/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -928,6 +1022,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -936,6 +1031,7 @@
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -947,6 +1043,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -955,6 +1052,7 @@
     "======== Resolving module '@typescript/lib-es2021/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -966,6 +1064,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -974,6 +1073,7 @@
     "======== Resolving module '@typescript/lib-es2021/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -985,6 +1085,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -993,6 +1094,7 @@
     "======== Resolving module '@typescript/lib-es2021/weakref' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1004,6 +1106,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1012,6 +1115,7 @@
     "======== Resolving module '@typescript/lib-es2021/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1023,6 +1127,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1031,6 +1136,7 @@
     "======== Resolving module '@typescript/lib-es2022/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1042,6 +1148,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1050,6 +1157,7 @@
     "======== Resolving module '@typescript/lib-es2022/error' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1061,6 +1169,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1069,6 +1178,7 @@
     "======== Resolving module '@typescript/lib-es2022/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1080,6 +1190,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1088,6 +1199,7 @@
     "======== Resolving module '@typescript/lib-es2022/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1099,6 +1211,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1107,6 +1220,7 @@
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1118,6 +1232,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1126,6 +1241,7 @@
     "======== Resolving module '@typescript/lib-es2022/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1137,6 +1253,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1145,6 +1262,7 @@
     "======== Resolving module '@typescript/lib-es2022/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1156,6 +1274,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1164,6 +1283,7 @@
     "======== Resolving module '@typescript/lib-es2023/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1175,6 +1295,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1183,6 +1304,7 @@
     "======== Resolving module '@typescript/lib-esnext/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1194,6 +1316,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1202,6 +1325,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1213,6 +1337,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1221,6 +1346,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1232,6 +1358,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1240,6 +1367,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1251,6 +1379,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1259,6 +1388,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1270,6 +1400,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/typesVersionsDeclarationEmit.multiFile.trace.json b/tests/baselines/reference/typesVersionsDeclarationEmit.multiFile.trace.json
index 52e978966c2ce..75a0af6d84191 100644
--- a/tests/baselines/reference/typesVersionsDeclarationEmit.multiFile.trace.json
+++ b/tests/baselines/reference/typesVersionsDeclarationEmit.multiFile.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'ext' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Found 'package.json' at 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json'.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.ts' does not exist.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.tsx' does not exist.",
@@ -22,6 +23,7 @@
     "======== Resolving module 'ext/other' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "Module name 'other', matched pattern '*'.",
@@ -34,6 +36,7 @@
     "======== Resolving module '@typescript/lib-esnext' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -45,6 +48,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -53,6 +57,7 @@
     "======== Resolving module '@typescript/lib-es2023' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -64,6 +69,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -72,6 +78,7 @@
     "======== Resolving module '@typescript/lib-es2022' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -83,6 +90,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -91,6 +99,7 @@
     "======== Resolving module '@typescript/lib-es2021' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -102,6 +111,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -110,6 +120,7 @@
     "======== Resolving module '@typescript/lib-es2020' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -121,6 +132,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -129,6 +141,7 @@
     "======== Resolving module '@typescript/lib-es2019' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -140,6 +153,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -148,6 +162,7 @@
     "======== Resolving module '@typescript/lib-es2018' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -159,6 +174,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -167,6 +183,7 @@
     "======== Resolving module '@typescript/lib-es2017' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -178,6 +195,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -186,6 +204,7 @@
     "======== Resolving module '@typescript/lib-es2016' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -197,6 +216,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -205,6 +225,7 @@
     "======== Resolving module '@typescript/lib-es2015' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -216,6 +237,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -224,6 +246,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -235,6 +258,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -243,6 +267,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -254,6 +279,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -262,6 +288,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -273,6 +300,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -281,6 +309,7 @@
     "======== Resolving module '@typescript/lib-es2015/core' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -292,6 +321,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -300,6 +330,7 @@
     "======== Resolving module '@typescript/lib-es2015/collection' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -311,6 +342,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -319,6 +351,7 @@
     "======== Resolving module '@typescript/lib-es2015/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -330,6 +363,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -338,6 +372,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -349,6 +384,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -357,6 +393,7 @@
     "======== Resolving module '@typescript/lib-es2015/generator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -368,6 +405,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -376,6 +414,7 @@
     "======== Resolving module '@typescript/lib-es2015/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -387,6 +426,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -395,6 +435,7 @@
     "======== Resolving module '@typescript/lib-es2015/proxy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -406,6 +447,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -414,6 +456,7 @@
     "======== Resolving module '@typescript/lib-es2015/reflect' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -425,6 +468,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -433,6 +477,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -444,6 +489,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -452,6 +498,7 @@
     "======== Resolving module '@typescript/lib-es2016/array-include' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -463,6 +510,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -471,6 +519,7 @@
     "======== Resolving module '@typescript/lib-es2017/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -482,6 +531,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -490,6 +540,7 @@
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -501,6 +552,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -509,6 +561,7 @@
     "======== Resolving module '@typescript/lib-es2017/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -520,6 +573,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -528,6 +582,7 @@
     "======== Resolving module '@typescript/lib-es2017/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -539,6 +594,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -547,6 +603,7 @@
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -558,6 +615,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -566,6 +624,7 @@
     "======== Resolving module '@typescript/lib-es2017/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -577,6 +636,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -585,6 +645,7 @@
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -596,6 +657,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -604,6 +666,7 @@
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -615,6 +678,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -623,6 +687,7 @@
     "======== Resolving module '@typescript/lib-es2018/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -634,6 +699,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -642,6 +708,7 @@
     "======== Resolving module '@typescript/lib-es2018/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -653,6 +720,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -661,6 +729,7 @@
     "======== Resolving module '@typescript/lib-es2018/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -672,6 +741,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -680,6 +750,7 @@
     "======== Resolving module '@typescript/lib-es2019/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -691,6 +762,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -699,6 +771,7 @@
     "======== Resolving module '@typescript/lib-es2019/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -710,6 +783,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -718,6 +792,7 @@
     "======== Resolving module '@typescript/lib-es2019/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -729,6 +804,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -737,6 +813,7 @@
     "======== Resolving module '@typescript/lib-es2019/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -748,6 +825,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -756,6 +834,7 @@
     "======== Resolving module '@typescript/lib-es2019/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -767,6 +846,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -775,6 +855,7 @@
     "======== Resolving module '@typescript/lib-es2020/bigint' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -786,6 +867,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -794,6 +876,7 @@
     "======== Resolving module '@typescript/lib-es2020/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -805,6 +888,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -813,6 +897,7 @@
     "======== Resolving module '@typescript/lib-es2020/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -824,6 +909,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -832,6 +918,7 @@
     "======== Resolving module '@typescript/lib-es2020/number' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -843,6 +930,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -851,6 +939,7 @@
     "======== Resolving module '@typescript/lib-es2020/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -862,6 +951,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -870,6 +960,7 @@
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -881,6 +972,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -889,6 +981,7 @@
     "======== Resolving module '@typescript/lib-es2020/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -900,6 +993,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -908,6 +1002,7 @@
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -919,6 +1014,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -927,6 +1023,7 @@
     "======== Resolving module '@typescript/lib-es2021/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -938,6 +1035,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -946,6 +1044,7 @@
     "======== Resolving module '@typescript/lib-es2021/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -957,6 +1056,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -965,6 +1065,7 @@
     "======== Resolving module '@typescript/lib-es2021/weakref' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -976,6 +1077,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -984,6 +1086,7 @@
     "======== Resolving module '@typescript/lib-es2021/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -995,6 +1098,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1003,6 +1107,7 @@
     "======== Resolving module '@typescript/lib-es2022/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1014,6 +1119,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1022,6 +1128,7 @@
     "======== Resolving module '@typescript/lib-es2022/error' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1033,6 +1140,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1041,6 +1149,7 @@
     "======== Resolving module '@typescript/lib-es2022/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1052,6 +1161,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1060,6 +1170,7 @@
     "======== Resolving module '@typescript/lib-es2022/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1071,6 +1182,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1079,6 +1191,7 @@
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1090,6 +1203,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1098,6 +1212,7 @@
     "======== Resolving module '@typescript/lib-es2022/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1109,6 +1224,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1117,6 +1233,7 @@
     "======== Resolving module '@typescript/lib-es2022/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1128,6 +1245,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1136,6 +1254,7 @@
     "======== Resolving module '@typescript/lib-es2023/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1147,6 +1266,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1155,6 +1275,7 @@
     "======== Resolving module '@typescript/lib-esnext/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1166,6 +1287,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1174,6 +1296,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1185,6 +1308,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1193,6 +1317,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1204,6 +1329,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1212,6 +1338,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1223,6 +1350,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1231,6 +1359,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1242,6 +1371,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToSelf.trace.json b/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToSelf.trace.json
index 26d43b0aafbdd..1821105cfe6fb 100644
--- a/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToSelf.trace.json
+++ b/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToSelf.trace.json
@@ -26,6 +26,7 @@
     "======== Resolving module 'ext' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.ts' does not exist.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.tsx' does not exist.",
@@ -45,6 +46,7 @@
     "======== Resolving module 'ext/other' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "Module name 'other', matched pattern '*'.",
@@ -57,6 +59,7 @@
     "======== Resolving module '@typescript/lib-esnext' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -68,6 +71,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -76,6 +80,7 @@
     "======== Resolving module '@typescript/lib-es2023' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -87,6 +92,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -95,6 +101,7 @@
     "======== Resolving module '@typescript/lib-es2022' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -106,6 +113,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -114,6 +122,7 @@
     "======== Resolving module '@typescript/lib-es2021' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -125,6 +134,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -133,6 +143,7 @@
     "======== Resolving module '@typescript/lib-es2020' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -144,6 +155,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -152,6 +164,7 @@
     "======== Resolving module '@typescript/lib-es2019' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -163,6 +176,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -171,6 +185,7 @@
     "======== Resolving module '@typescript/lib-es2018' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -182,6 +197,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -190,6 +206,7 @@
     "======== Resolving module '@typescript/lib-es2017' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -201,6 +218,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -209,6 +227,7 @@
     "======== Resolving module '@typescript/lib-es2016' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -220,6 +239,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -228,6 +248,7 @@
     "======== Resolving module '@typescript/lib-es2015' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -239,6 +260,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -247,6 +269,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -258,6 +281,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -266,6 +290,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -277,6 +302,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -285,6 +311,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -296,6 +323,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -304,6 +332,7 @@
     "======== Resolving module '@typescript/lib-es2015/core' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -315,6 +344,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -323,6 +353,7 @@
     "======== Resolving module '@typescript/lib-es2015/collection' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -334,6 +365,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -342,6 +374,7 @@
     "======== Resolving module '@typescript/lib-es2015/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -353,6 +386,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -361,6 +395,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -372,6 +407,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -380,6 +416,7 @@
     "======== Resolving module '@typescript/lib-es2015/generator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -391,6 +428,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -399,6 +437,7 @@
     "======== Resolving module '@typescript/lib-es2015/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -410,6 +449,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -418,6 +458,7 @@
     "======== Resolving module '@typescript/lib-es2015/proxy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -429,6 +470,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -437,6 +479,7 @@
     "======== Resolving module '@typescript/lib-es2015/reflect' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -448,6 +491,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -456,6 +500,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -467,6 +512,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -475,6 +521,7 @@
     "======== Resolving module '@typescript/lib-es2016/array-include' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -486,6 +533,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -494,6 +542,7 @@
     "======== Resolving module '@typescript/lib-es2017/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -505,6 +554,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -513,6 +563,7 @@
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -524,6 +575,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -532,6 +584,7 @@
     "======== Resolving module '@typescript/lib-es2017/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -543,6 +596,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -551,6 +605,7 @@
     "======== Resolving module '@typescript/lib-es2017/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -562,6 +617,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -570,6 +626,7 @@
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -581,6 +638,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -589,6 +647,7 @@
     "======== Resolving module '@typescript/lib-es2017/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -600,6 +659,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -608,6 +668,7 @@
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -619,6 +680,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -627,6 +689,7 @@
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -638,6 +701,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -646,6 +710,7 @@
     "======== Resolving module '@typescript/lib-es2018/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -657,6 +722,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -665,6 +731,7 @@
     "======== Resolving module '@typescript/lib-es2018/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -676,6 +743,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -684,6 +752,7 @@
     "======== Resolving module '@typescript/lib-es2018/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -695,6 +764,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -703,6 +773,7 @@
     "======== Resolving module '@typescript/lib-es2019/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -714,6 +785,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -722,6 +794,7 @@
     "======== Resolving module '@typescript/lib-es2019/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -733,6 +806,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -741,6 +815,7 @@
     "======== Resolving module '@typescript/lib-es2019/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -752,6 +827,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -760,6 +836,7 @@
     "======== Resolving module '@typescript/lib-es2019/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -771,6 +848,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -779,6 +857,7 @@
     "======== Resolving module '@typescript/lib-es2019/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -790,6 +869,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -798,6 +878,7 @@
     "======== Resolving module '@typescript/lib-es2020/bigint' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -809,6 +890,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -817,6 +899,7 @@
     "======== Resolving module '@typescript/lib-es2020/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -828,6 +911,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -836,6 +920,7 @@
     "======== Resolving module '@typescript/lib-es2020/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -847,6 +932,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -855,6 +941,7 @@
     "======== Resolving module '@typescript/lib-es2020/number' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -866,6 +953,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -874,6 +962,7 @@
     "======== Resolving module '@typescript/lib-es2020/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -885,6 +974,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -893,6 +983,7 @@
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -904,6 +995,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -912,6 +1004,7 @@
     "======== Resolving module '@typescript/lib-es2020/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -923,6 +1016,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -931,6 +1025,7 @@
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -942,6 +1037,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -950,6 +1046,7 @@
     "======== Resolving module '@typescript/lib-es2021/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -961,6 +1058,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -969,6 +1067,7 @@
     "======== Resolving module '@typescript/lib-es2021/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -980,6 +1079,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -988,6 +1088,7 @@
     "======== Resolving module '@typescript/lib-es2021/weakref' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -999,6 +1100,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1007,6 +1109,7 @@
     "======== Resolving module '@typescript/lib-es2021/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1018,6 +1121,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1026,6 +1130,7 @@
     "======== Resolving module '@typescript/lib-es2022/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1037,6 +1142,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1045,6 +1151,7 @@
     "======== Resolving module '@typescript/lib-es2022/error' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1056,6 +1163,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1064,6 +1172,7 @@
     "======== Resolving module '@typescript/lib-es2022/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1075,6 +1184,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1083,6 +1193,7 @@
     "======== Resolving module '@typescript/lib-es2022/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1094,6 +1205,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1102,6 +1214,7 @@
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1113,6 +1226,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1121,6 +1235,7 @@
     "======== Resolving module '@typescript/lib-es2022/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1132,6 +1247,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1140,6 +1256,7 @@
     "======== Resolving module '@typescript/lib-es2022/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1151,6 +1268,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1159,6 +1277,7 @@
     "======== Resolving module '@typescript/lib-es2023/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1170,6 +1289,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1178,6 +1298,7 @@
     "======== Resolving module '@typescript/lib-esnext/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1189,6 +1310,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1197,6 +1319,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1208,6 +1331,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1216,6 +1340,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1227,6 +1352,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1235,6 +1361,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1246,6 +1373,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1254,6 +1382,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1265,6 +1394,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToUnmapped.trace.json b/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToUnmapped.trace.json
index de9af664db27e..5a4ca03b8941f 100644
--- a/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToUnmapped.trace.json
+++ b/tests/baselines/reference/typesVersionsDeclarationEmit.multiFileBackReferenceToUnmapped.trace.json
@@ -10,6 +10,7 @@
     "======== Resolving module 'ext' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.ts' does not exist.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext.tsx' does not exist.",
@@ -30,6 +31,7 @@
     "======== Resolving module 'ext/other' from 'tests/cases/conformance/declarationEmit/main.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'ext/other' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/package.json' exists according to earlier cached lookups.",
     "'package.json' has a 'typesVersions' entry '>=3.1.0-0' that matches compiler version '3.1.0-dev', looking for a pattern to match module name 'other'.",
     "File 'tests/cases/conformance/declarationEmit/node_modules/ext/other.ts' does not exist.",
@@ -40,6 +42,7 @@
     "======== Resolving module '@typescript/lib-esnext' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -51,6 +54,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext'",
     "Loading module '@typescript/lib-esnext' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -59,6 +63,7 @@
     "======== Resolving module '@typescript/lib-es2023' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -70,6 +75,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023'",
     "Loading module '@typescript/lib-es2023' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -78,6 +84,7 @@
     "======== Resolving module '@typescript/lib-es2022' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -89,6 +96,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022'",
     "Loading module '@typescript/lib-es2022' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -97,6 +105,7 @@
     "======== Resolving module '@typescript/lib-es2021' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -108,6 +117,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021'",
     "Loading module '@typescript/lib-es2021' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -116,6 +126,7 @@
     "======== Resolving module '@typescript/lib-es2020' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -127,6 +138,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020'",
     "Loading module '@typescript/lib-es2020' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -135,6 +147,7 @@
     "======== Resolving module '@typescript/lib-es2019' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -146,6 +159,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019'",
     "Loading module '@typescript/lib-es2019' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -154,6 +168,7 @@
     "======== Resolving module '@typescript/lib-es2018' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -165,6 +180,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018'",
     "Loading module '@typescript/lib-es2018' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -173,6 +189,7 @@
     "======== Resolving module '@typescript/lib-es2017' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -184,6 +201,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017'",
     "Loading module '@typescript/lib-es2017' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -192,6 +210,7 @@
     "======== Resolving module '@typescript/lib-es2016' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -203,6 +222,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016'",
     "Loading module '@typescript/lib-es2016' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -211,6 +231,7 @@
     "======== Resolving module '@typescript/lib-es2015' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -222,6 +243,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015'",
     "Loading module '@typescript/lib-es2015' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -230,6 +252,7 @@
     "======== Resolving module '@typescript/lib-es5' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -241,6 +264,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -249,6 +273,7 @@
     "======== Resolving module '@typescript/lib-decorators' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -260,6 +285,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -268,6 +294,7 @@
     "======== Resolving module '@typescript/lib-decorators/legacy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -279,6 +306,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -287,6 +315,7 @@
     "======== Resolving module '@typescript/lib-es2015/core' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.core.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -298,6 +327,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/core'",
     "Loading module '@typescript/lib-es2015/core' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -306,6 +336,7 @@
     "======== Resolving module '@typescript/lib-es2015/collection' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.collection.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -317,6 +348,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/collection'",
     "Loading module '@typescript/lib-es2015/collection' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -325,6 +357,7 @@
     "======== Resolving module '@typescript/lib-es2015/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -336,6 +369,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/iterable'",
     "Loading module '@typescript/lib-es2015/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -344,6 +378,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -355,6 +390,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol'",
     "Loading module '@typescript/lib-es2015/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -363,6 +399,7 @@
     "======== Resolving module '@typescript/lib-es2015/generator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.generator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -374,6 +411,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/generator'",
     "Loading module '@typescript/lib-es2015/generator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -382,6 +420,7 @@
     "======== Resolving module '@typescript/lib-es2015/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -393,6 +432,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/promise'",
     "Loading module '@typescript/lib-es2015/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -401,6 +441,7 @@
     "======== Resolving module '@typescript/lib-es2015/proxy' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.proxy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -412,6 +453,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/proxy'",
     "Loading module '@typescript/lib-es2015/proxy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -420,6 +462,7 @@
     "======== Resolving module '@typescript/lib-es2015/reflect' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.reflect.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -431,6 +474,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/reflect'",
     "Loading module '@typescript/lib-es2015/reflect' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -439,6 +483,7 @@
     "======== Resolving module '@typescript/lib-es2015/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2015.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -450,6 +495,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2015/symbol-wellknown'",
     "Loading module '@typescript/lib-es2015/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -458,6 +504,7 @@
     "======== Resolving module '@typescript/lib-es2016/array-include' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2016.array.include.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -469,6 +516,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2016/array-include'",
     "Loading module '@typescript/lib-es2016/array-include' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -477,6 +525,7 @@
     "======== Resolving module '@typescript/lib-es2017/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -488,6 +537,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/object'",
     "Loading module '@typescript/lib-es2017/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -496,6 +546,7 @@
     "======== Resolving module '@typescript/lib-es2017/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -507,6 +558,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/sharedmemory'",
     "Loading module '@typescript/lib-es2017/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -515,6 +567,7 @@
     "======== Resolving module '@typescript/lib-es2017/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -526,6 +579,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/string'",
     "Loading module '@typescript/lib-es2017/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -534,6 +588,7 @@
     "======== Resolving module '@typescript/lib-es2017/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -545,6 +600,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/intl'",
     "Loading module '@typescript/lib-es2017/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -553,6 +609,7 @@
     "======== Resolving module '@typescript/lib-es2017/typedarrays' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.typedarrays.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -564,6 +621,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/typedarrays'",
     "Loading module '@typescript/lib-es2017/typedarrays' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -572,6 +630,7 @@
     "======== Resolving module '@typescript/lib-es2017/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2017.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -583,6 +642,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2017/date'",
     "Loading module '@typescript/lib-es2017/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -591,6 +651,7 @@
     "======== Resolving module '@typescript/lib-es2018/asynciterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asynciterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -602,6 +663,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asynciterable'",
     "Loading module '@typescript/lib-es2018/asynciterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -610,6 +672,7 @@
     "======== Resolving module '@typescript/lib-es2018/asyncgenerator' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.asyncgenerator.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -621,6 +684,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/asyncgenerator'",
     "Loading module '@typescript/lib-es2018/asyncgenerator' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -629,6 +693,7 @@
     "======== Resolving module '@typescript/lib-es2018/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -640,6 +705,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/promise'",
     "Loading module '@typescript/lib-es2018/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -648,6 +714,7 @@
     "======== Resolving module '@typescript/lib-es2018/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -659,6 +726,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/regexp'",
     "Loading module '@typescript/lib-es2018/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -667,6 +735,7 @@
     "======== Resolving module '@typescript/lib-es2018/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2018.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -678,6 +747,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2018/intl'",
     "Loading module '@typescript/lib-es2018/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -686,6 +756,7 @@
     "======== Resolving module '@typescript/lib-es2019/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -697,6 +768,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/array'",
     "Loading module '@typescript/lib-es2019/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -705,6 +777,7 @@
     "======== Resolving module '@typescript/lib-es2019/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -716,6 +789,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/object'",
     "Loading module '@typescript/lib-es2019/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -724,6 +798,7 @@
     "======== Resolving module '@typescript/lib-es2019/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -735,6 +810,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/string'",
     "Loading module '@typescript/lib-es2019/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -743,6 +819,7 @@
     "======== Resolving module '@typescript/lib-es2019/symbol' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.symbol.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -754,6 +831,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/symbol'",
     "Loading module '@typescript/lib-es2019/symbol' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -762,6 +840,7 @@
     "======== Resolving module '@typescript/lib-es2019/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2019.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -773,6 +852,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2019/intl'",
     "Loading module '@typescript/lib-es2019/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -781,6 +861,7 @@
     "======== Resolving module '@typescript/lib-es2020/bigint' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.bigint.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -792,6 +873,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/bigint'",
     "Loading module '@typescript/lib-es2020/bigint' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -800,6 +882,7 @@
     "======== Resolving module '@typescript/lib-es2020/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -811,6 +894,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/intl'",
     "Loading module '@typescript/lib-es2020/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -819,6 +903,7 @@
     "======== Resolving module '@typescript/lib-es2020/date' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.date.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -830,6 +915,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/date'",
     "Loading module '@typescript/lib-es2020/date' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -838,6 +924,7 @@
     "======== Resolving module '@typescript/lib-es2020/number' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.number.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -849,6 +936,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/number'",
     "Loading module '@typescript/lib-es2020/number' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -857,6 +945,7 @@
     "======== Resolving module '@typescript/lib-es2020/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -868,6 +957,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/promise'",
     "Loading module '@typescript/lib-es2020/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -876,6 +966,7 @@
     "======== Resolving module '@typescript/lib-es2020/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -887,6 +978,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/sharedmemory'",
     "Loading module '@typescript/lib-es2020/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -895,6 +987,7 @@
     "======== Resolving module '@typescript/lib-es2020/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -906,6 +999,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/string'",
     "Loading module '@typescript/lib-es2020/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -914,6 +1008,7 @@
     "======== Resolving module '@typescript/lib-es2020/symbol-wellknown' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2020.symbol.wellknown.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -925,6 +1020,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2020/symbol-wellknown'",
     "Loading module '@typescript/lib-es2020/symbol-wellknown' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -933,6 +1029,7 @@
     "======== Resolving module '@typescript/lib-es2021/promise' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.promise.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -944,6 +1041,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/promise'",
     "Loading module '@typescript/lib-es2021/promise' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -952,6 +1050,7 @@
     "======== Resolving module '@typescript/lib-es2021/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -963,6 +1062,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/string'",
     "Loading module '@typescript/lib-es2021/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -971,6 +1071,7 @@
     "======== Resolving module '@typescript/lib-es2021/weakref' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.weakref.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -982,6 +1083,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/weakref'",
     "Loading module '@typescript/lib-es2021/weakref' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -990,6 +1092,7 @@
     "======== Resolving module '@typescript/lib-es2021/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2021.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1001,6 +1104,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2021/intl'",
     "Loading module '@typescript/lib-es2021/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1009,6 +1113,7 @@
     "======== Resolving module '@typescript/lib-es2022/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1020,6 +1125,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/array'",
     "Loading module '@typescript/lib-es2022/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1028,6 +1134,7 @@
     "======== Resolving module '@typescript/lib-es2022/error' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.error.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1039,6 +1146,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/error'",
     "Loading module '@typescript/lib-es2022/error' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1047,6 +1155,7 @@
     "======== Resolving module '@typescript/lib-es2022/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1058,6 +1167,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/intl'",
     "Loading module '@typescript/lib-es2022/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1066,6 +1176,7 @@
     "======== Resolving module '@typescript/lib-es2022/object' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.object.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1077,6 +1188,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/object'",
     "Loading module '@typescript/lib-es2022/object' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1085,6 +1197,7 @@
     "======== Resolving module '@typescript/lib-es2022/sharedmemory' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.sharedmemory.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1096,6 +1209,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/sharedmemory'",
     "Loading module '@typescript/lib-es2022/sharedmemory' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1104,6 +1218,7 @@
     "======== Resolving module '@typescript/lib-es2022/string' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.string.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1115,6 +1230,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/string'",
     "Loading module '@typescript/lib-es2022/string' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1123,6 +1239,7 @@
     "======== Resolving module '@typescript/lib-es2022/regexp' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2022.regexp.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1134,6 +1251,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2022/regexp'",
     "Loading module '@typescript/lib-es2022/regexp' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1142,6 +1260,7 @@
     "======== Resolving module '@typescript/lib-es2023/array' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.es2023.array.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1153,6 +1272,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-es2023/array'",
     "Loading module '@typescript/lib-es2023/array' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1161,6 +1281,7 @@
     "======== Resolving module '@typescript/lib-esnext/intl' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.esnext.intl.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1172,6 +1293,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-esnext/intl'",
     "Loading module '@typescript/lib-esnext/intl' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1180,6 +1302,7 @@
     "======== Resolving module '@typescript/lib-dom' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1191,6 +1314,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1199,6 +1323,7 @@
     "======== Resolving module '@typescript/lib-webworker/importscripts' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1210,6 +1335,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1218,6 +1344,7 @@
     "======== Resolving module '@typescript/lib-scripthost' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1229,6 +1356,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
@@ -1237,6 +1365,7 @@
     "======== Resolving module '@typescript/lib-dom/iterable' from 'tests/cases/conformance/declarationEmit/__lib_node_modules_lookup_lib.dom.iterable.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Directory 'tests/cases/conformance/declarationEmit/node_modules/@types' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
@@ -1248,6 +1377,7 @@
     "Directory 'node_modules' does not exist, skipping all lookups in it.",
     "Scoped package detected, looking in 'typescript__lib-dom/iterable'",
     "Loading module '@typescript/lib-dom/iterable' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "Directory 'tests/cases/conformance/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/cases/node_modules' does not exist, skipping all lookups in it.",
     "Directory 'tests/node_modules' does not exist, skipping all lookups in it.",
diff --git a/tests/baselines/reference/typingsLookup1.trace.json b/tests/baselines/reference/typingsLookup1.trace.json
index 01e6eeb1f41b7..ca05094980119 100644
--- a/tests/baselines/reference/typingsLookup1.trace.json
+++ b/tests/baselines/reference/typingsLookup1.trace.json
@@ -11,41 +11,53 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typingsLookup2.trace.json b/tests/baselines/reference/typingsLookup2.trace.json
index b4f0767dae96e..4433ceee06a74 100644
--- a/tests/baselines/reference/typingsLookup2.trace.json
+++ b/tests/baselines/reference/typingsLookup2.trace.json
@@ -2,41 +2,53 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typingsLookup3.trace.json b/tests/baselines/reference/typingsLookup3.trace.json
index 01e6eeb1f41b7..ca05094980119 100644
--- a/tests/baselines/reference/typingsLookup3.trace.json
+++ b/tests/baselines/reference/typingsLookup3.trace.json
@@ -11,41 +11,53 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typingsLookup4.trace.json b/tests/baselines/reference/typingsLookup4.trace.json
index b0ecd30a5e48a..7f87e32255fb2 100644
--- a/tests/baselines/reference/typingsLookup4.trace.json
+++ b/tests/baselines/reference/typingsLookup4.trace.json
@@ -2,6 +2,7 @@
     "======== Resolving module 'jquery' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'jquery' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/jquery.ts' does not exist.",
     "File '/node_modules/jquery.tsx' does not exist.",
     "File '/node_modules/jquery.d.ts' does not exist.",
@@ -15,6 +16,7 @@
     "======== Resolving module 'kquery' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'kquery' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/kquery.ts' does not exist.",
     "File '/node_modules/kquery.tsx' does not exist.",
     "File '/node_modules/kquery.d.ts' does not exist.",
@@ -32,6 +34,7 @@
     "======== Resolving module 'lquery' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'lquery' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/lquery.ts' does not exist.",
     "File '/node_modules/lquery.tsx' does not exist.",
     "File '/node_modules/lquery.d.ts' does not exist.",
@@ -47,6 +50,7 @@
     "======== Resolving module 'mquery' from '/a.ts'. ========",
     "Module resolution kind is not specified, using 'Node10'.",
     "Loading module 'mquery' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "File '/node_modules/mquery.ts' does not exist.",
     "File '/node_modules/mquery.tsx' does not exist.",
     "File '/node_modules/mquery.d.ts' does not exist.",
@@ -106,41 +110,53 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file
diff --git a/tests/baselines/reference/typingsLookupAmd.trace.json b/tests/baselines/reference/typingsLookupAmd.trace.json
index 559fc09589a49..a60e37c92bea3 100644
--- a/tests/baselines/reference/typingsLookupAmd.trace.json
+++ b/tests/baselines/reference/typingsLookupAmd.trace.json
@@ -10,6 +10,7 @@
     "File '/b.ts' does not exist.",
     "File '/b.tsx' does not exist.",
     "File '/b.d.ts' does not exist.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/x/y/node_modules' does not exist, skipping all lookups in it.",
     "File '/x/node_modules/@types/b/package.json' does not exist.",
     "File '/x/node_modules/@types/b.d.ts' does not exist.",
@@ -33,6 +34,7 @@
     "File '/a.ts' does not exist.",
     "File '/a.tsx' does not exist.",
     "File '/a.d.ts' does not exist.",
+    "Searching all ancestor node_modules directories for preferred extensions: Declaration.",
     "Directory '/x/node_modules/@types/b/node_modules' does not exist, skipping all lookups in it.",
     "Directory '/x/node_modules/@types/node_modules' does not exist, skipping all lookups in it.",
     "File '/x/node_modules/@types/a.d.ts' does not exist.",
@@ -50,41 +52,53 @@
     "======== Resolving module '@typescript/lib-es5' from '/__lib_node_modules_lookup_lib.es5.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-es5'",
     "File '/node_modules/@types/typescript__lib-es5.d.ts' does not exist.",
     "Loading module '@typescript/lib-es5' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-es5' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators' from '/__lib_node_modules_lookup_lib.decorators.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators'",
     "File '/node_modules/@types/typescript__lib-decorators.d.ts' does not exist.",
     "Loading module '@typescript/lib-decorators' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators' was not resolved. ========",
     "======== Resolving module '@typescript/lib-decorators/legacy' from '/__lib_node_modules_lookup_lib.decorators.legacy.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-decorators/legacy'",
     "Loading module '@typescript/lib-decorators/legacy' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-decorators/legacy' was not resolved. ========",
     "======== Resolving module '@typescript/lib-dom' from '/__lib_node_modules_lookup_lib.dom.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-dom'",
     "File '/node_modules/@types/typescript__lib-dom.d.ts' does not exist.",
     "Loading module '@typescript/lib-dom' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-dom' was not resolved. ========",
     "======== Resolving module '@typescript/lib-webworker/importscripts' from '/__lib_node_modules_lookup_lib.webworker.importscripts.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-webworker/importscripts'",
     "Loading module '@typescript/lib-webworker/importscripts' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-webworker/importscripts' was not resolved. ========",
     "======== Resolving module '@typescript/lib-scripthost' from '/__lib_node_modules_lookup_lib.scripthost.d.ts__.ts'. ========",
     "Explicitly specified module resolution kind: 'Node10'.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: TypeScript, Declaration.",
+    "Searching all ancestor node_modules directories for preferred extensions: TypeScript, Declaration.",
     "Scoped package detected, looking in 'typescript__lib-scripthost'",
     "File '/node_modules/@types/typescript__lib-scripthost.d.ts' does not exist.",
     "Loading module '@typescript/lib-scripthost' from 'node_modules' folder, target file types: JavaScript.",
+    "Searching all ancestor node_modules directories for fallback extensions: JavaScript.",
     "======== Module name '@typescript/lib-scripthost' was not resolved. ========"
 ]
\ No newline at end of file