Nasdaq Set for Small Bounce After TSMC Profit Beat: Markets Wrap

 

 

(Bloomberg) -- US tech stocks were set to claw back a little of this week’s slump as an upbeat earnings update from Taiwan Semiconductor Manufacturing Co. helped restore sentiment toward the sector.

Nasdaq 100 futures climbed 0.4%, after the index endured its worst day since 2022, with Nvidia Corp., Advanced Micro Devices Inc. and Super Micro Computer Inc. all rising strongly in premarket trading. They had been hit hard on Wednesday by concerns the US could impose stricter curbs on firms that supply China with advanced semiconductor technology, but the sector received a boost from the results from TSMC, the world’s largest chip firm.

TSMC reported forecast-beating earnings and raised projections for full-year revenue growth, signaling confidence in the outlook for global spending on artificial intelligence. Analysts said a relatively robust earnings season and expectations of interest rate cuts from the Federal Reserve and other central banks are also supporting sentiment.

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

The concerns have not fully dissipated, however, and Amsterdam-listed chip giant ASML Holding NV — among companies that could be hit by any tougher US measures — extended Wednesday’s 11% rout. That, alongside the prospect of trade tariffs under a potential Donald Trump presidency, continued to weigh on Europe’s Stoxx 600 index.

On the earnings front, Volvo AB rose after it reported better-than-expected profits for the second quarter. In New York premarket trading, airline stocks lost ground after the earnings outlook for United Airlines Holdings Inc. fell short of estimates. Beyond Meat Inc., which sells plant-based meat substitutes, also slid on concerns over a possible debt restructuring.

Earnings from streaming services firm Netflix Inc., due later Thursday, are expected to show global subscriber numbers continue to rise.

Elsewhere, a dollar index traded near the lowest level in two months while the yen steadied after a recent surge that is widely attributed to a bout of buying by Japanese authorities. The euro weakened slightly ahead of a European Central Bank meeting that’s expected to signal the next rate cut will come in September.

Later in the day, a string of Fed rate-setters are due to speak, including San Francisco Fed chief Mary Daly and Governor Michelle Bowman. Initial jobless claims figures due later Thursday will give investors the latest snapshot of the state of the economy.

Key events this week:

ECB rate decision, Thursday

US initial jobless claims, Philadelphia Fed manufacturing, Conference Board LEI, Thursday

Fed’s Mary Daly, Lorie Logan and Michelle Bowman speak, Thursday

Fed’s John Williams, Raphael Bostic speak, Friday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.3% as of 9:52 a.m. London time

S&P 500 futures rose 0.3%

Nasdaq 100 futures rose 0.6%

Futures on the Dow Jones Industrial Average were little changed

The MSCI Asia Pacific Index fell 0.9%

The MSCI Emerging Markets Index fell 0.4%

Currencies

The Bloomberg Dollar Spot Index was little changed

The euro was little changed at $1.0932

The Japanese yen fell 0.2% to 156.52 per dollar

The offshore yuan was little changed at 7.2733 per dollar

The British pound fell 0.2% to $1.2988

Cryptocurrencies

Bitcoin rose 0.5% to $64,842.08

Ether rose 1% to $3,450.05

Bonds

The yield on 10-year Treasuries advanced three basis points to 4.18%

Germany’s 10-year yield advanced two basis points to 2.44%

Britain’s 10-year yield was little changed at 4.08%

Commodities

Brent crude rose 0.1% to $85.20 a barrel

Spot gold rose 0.4% to $2,467.71 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Richard Henderson and Chiranjivi Chakraborty.