Tech stocks eyed a small comeback on Thursday from the Nasdaq’s worst day since 2022, as TSMC’s (TSM) upbeat results helped calm worries about the AI trade ahead of Netflix (NFLX) earnings.
The tech-heavy Nasdaq Composite (^IXIC) rose about 0.2%, while the S&P 500 (^GSPC) edged up 0.2%. The Dow Jones Industrial Average (^DJI) hovered near the flatline, coming off an all-time closing high for the blue-chip index.
The rally on Wall Street has hit increasing turbulence this week as political, geopolitical, and trade risks unsettle a market finally confident that Fed will cut interest rates this year.
A sign the labor market is cooling further bolstered those rate-cut hopes on Thursday. The number of continuing applications for unemployment benefits once again hit its highest level since November 2021, signaling unemployed workers are struggling to find new jobs.
The Nasdaq sank over 2.7% on Wednesday, partly thanks to a potential escalation in US curbs on exports to China. Chip stocks Nvidia (NVDA), TSMC, and ASML (ASML) all got hammered amid a rotation from tech leaders into less prominent parts of the market.
TSMC’s strong quarterly earnings Thursday helped lift the mood. The Taiwanese chip giant beat on profit with a 36% jump, and it raised its 2024 sales outlook to signal confidence in the AI boom. Shares in the supplier to Nvidia and Apple (AAPL) inched higher.
Netflix (NFLX) is the highlight on Thursday’s earnings docket, due after the market close. Expectations are high for the streamer, though some on Wall Street note the stock is already flirting with record levels.
Elsewhere, investors are keeping a watchful eye on the US presidential race, given Republican nominee Donald Trump’s potential to move markets. President Joe Biden has come down with COVID-19 at a key point in his campaign, and key Democratic leaders have revived talk of an exit.
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