US chip markets set to rally after TSMC results: Markets Wrap

(Bloomberg) — U.S. technology stocks are expected to recover slightly from their slide this week, helped by upbeat earnings from the world’s largest chipmaker and the prospect of encouraging results from other big players in the sector.

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Nasdaq 100 futures rose 0.4% after better-than-expected earnings and a strong outlook from Taiwan Semiconductor Manufacturing Co. Nvidia Corp., Advanced Micro Devices Inc. and Super Micro Computer Inc. all rose sharply in premarket trading. The Nasdaq had its worst day since 2022 on Wednesday amid concerns about tighter U.S. restrictions on companies that supply advanced semiconductor technology to China. The pan-European STOXX 600 index rose 0.3%.

Analysts say a relatively strong earnings season and expectations of interest rate cuts from the Federal Reserve and other central banks are also supporting sentiment. Later in the day, streaming giant Netflix Inc. will be the first major U.S. tech company to report results — and it’s expected to show continued growth in global subscriber numbers.

“I’m not surprised people are trying to buy stocks on the dip,” said Michael Brown, chief strategist at Pepperstone Group Ltd. “The fundamental argument for stocks remains strong — earnings and economic growth look resilient and the Fed should start cutting interest rates from September.”

But tech worries haven’t entirely dissipated, with Amsterdam-listed chip giant ASML Holding NV — among the companies that could be affected by any tougher U.S. measures — extending its 11% slide on Wednesday. That, along with the prospect of trade tariffs under a potential Trump presidency, continues to weigh on the pan-European STOXX 600 index.

On the earnings front, Volvo shares rose after it reported better-than-expected second-quarter earnings, although an update from telecoms company Nokia Oyj was disappointing, sending the stock down about 10%.

In New York, airline stocks fell in early trading after United Airlines Holdings Inc.’s earnings forecast fell short of expectations. Beyond Meat Inc. shares also fell on concerns about a potential debt restructuring.

Elsewhere, the dollar index traded near a two-month low, while the yen held steady after a recent rally widely attributed to a wave of buying by Japanese authorities. The euro eased slightly ahead of a European Central Bank meeting that is expected to signal the next interest rate cut will come in September.

The story continues

Later in the day, a number of Fed officials are scheduled to speak about interest rates, including San Francisco Fed President Mary Daly and Fed Governor Michelle Bowman. Initial jobless claims figures are due later Thursday, giving investors the latest picture of the state of the economy.

Main events this week:

• ECB interest rate decision, Thursday

• US Initial Jobless Claims, Philadelphia Fed Manufacturing, Conference Board LEI, Thursday

• Mary Daly, Lori Logan and Michelle Bowman of the Federal Reserve speak Thursday.

• Fed’s John Williams and Raphael Boucek speak Friday

Some key movements in the markets:

Stores

• S&P 500 futures were little changed as of 6:32 a.m. ET in New York.

• Nasdaq 100 futures rose 0.3%.

• Dow Jones Industrial Average futures fell 0.2%.

• The Stoxx Europe 600 index rose 0.3%.

• The MSCI World Index saw little change.

Currencies

• The Bloomberg Dollar Index was little changed.

• The euro was little changed at $1.0932.

• The pound fell 0.1% to $1.2991.

• The Japanese yen fell 0.2% to 156.44 yen per dollar.

Cryptocurrencies

• Bitcoin was little changed at $64,559.46.

• Ether price rose 0.7% to $3,440.33

Bonds

• The yield on the 10-year US Treasury note rose three basis points to 4.18%.

• The yield on the German 10-year bond rose by two basis points to 2.44%.

• The yield on the 10-year UK bond was little changed at 4.08%.

Goods

• West Texas Intermediate crude was little changed.

• Spot gold rose 0.2 percent to $2,463.17 an ounce.

This story was produced with the help of Bloomberg Automation.

–With assistance from Richard Henderson and Chiranjeevi Chakraborty.

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