Futures tracking the Nasdaq and the S&P 500 rose on Thursday, as strong results from Taiwan’s TSMC boosted chipmakers after a rollercoaster session marked by concerns about the Federal Reserve’s independence.
At 5:45 a.m. ET, Dow E-minis were down 24 points, or 0.05 per cent, S&P 500 E-minis were up 5.75 points, or 0.1 per cent, and Nasdaq 100 E-minis were up 41.25 points, or 0.18 per cent.
U.S. chipmakers rose in premarket trading after TSMC, the world’s main producer of advanced AI chips, posted a record quarterly profit, saying demand for artificial intelligence was getting stronger.
U.S.-listed shares of TSMC gained 4 per cent and Advanced Micro Devices rose 1.2 per cent. Marvell inched up 0.7 per cent, while Nvidia and Super Mirco Computers gained 0.7 per cent and 1.3 per cent, respectively.
Netflix edged 0.5 per cent higher ahead of its quarterly results after markets close.
“The market is underestimating the potential for a big U.S. earnings beat in the second quarter. Recent data on economic activity shows few signs of troubling weakness,” HSBC analysts said.
Wall Street ended the previous session with modest gains, with the Nasdaq soaring to yet another record high.
Markets briefly tumbled in the previous session – dropping as much as 1 per cent – after reports surfaced that President Donald Trump was considering firing Federal Reserve Chair Jerome Powell. Although Trump swiftly denied the reports, his ongoing criticism of the central bank and hints at possible action kept investors on edge about the Fed’s independence.
Fed officials have resisted cutting rates until there is clarity on whether Trump’s tariffs on U.S. trading partners reignite inflation.
The media reports on Wednesday sent odds of a September rate cut soaring to 66 per cent, up from 54 per cent earlier in the day.
Currently, traders see a 55 per cent chance of cutting in September, while a July move is almost completely off the table, according to CME’s FedWatch tool.
Meanwhile, attention also remained on looming tariffs, with an Aug. 1 deadline threatening higher levies for many U.S. trading partners.
Trump told Real America’s Voice on Wednesday that the U.S. is closing in on a deal with India and may soon reach an agreement with Europe as well. Investors will also be eyeing June retail sales data, set for release at 8:30 a.m. ET, for fresh insight into consumer spending. At least four Fed officials, including Board Governors Adriana Kugler and Lisa Cook, are slated to speak.
A healthy crop of earnings helped European stocks bust out of a four-day losing streak on Thursday.
Europe’s STOXX 600 made a solid start as record orders at Swiss engineering giant ABB and TSMC’s record US$13.5-billion profits came along rising optimism about a EU-US trade deal after talks were held in Washington.
It was the currency market moves that remained the immediate focus however.
The U.S. dollar was up 0.4 per cent at US$1.16 against the euro, bringing it largely back to where it had been before what Societe Generale’s Kit Juckes described as Wednesday’s “madness” triggered by reports Trump was readying to oust the Fed chief – which he later scotched.
Japan’s yen gave the greenback further help as polls showing Prime Minister Shigeru Ishiba’s coalition was in danger of losing its majority in the upper house in upcoming elections pushed it toward its lowest since April at 148.73 to the dollar.
Data had also shown the Asian nation’s exports were starting to feel the impact of tariffs with shipments down for a second straight month, while Australia’s dollar had taken a 1 per cent overnight tumble after weak employment numbers there.
“The market has got itself solidly short on the dollar and we are going into high summer so people are starting to buy it back a bit,” Juckes said.
European stocks were up a comfortable 0.7 per cent while Japan’s Nikkei and bluechip markets in Taiwan and China had all notched 0.3 per cent-0.6 per cent rises overnight.
Ending what would have been the biggest foreign takeover of a Japanese company, Canadian retailer Alimentation Couche-Tard withdrew its roughly US$46-billion takeover bid for Seven & i Holdings, citing a lack of constructive engagement by the operator of 7-Eleven convenience stores.
Shares of Seven & i Holdings slid to a three-month low and ended down over 9 per cent.
The benchmark 10-year Treasury yield was little changed at 4.4714 per cent in European trading on Thursday, while German Bund yields were a steady 2.695 per cent, having touched their highest since late March earlier this week.
In the commodity markets, Brent oil prices rose as much as 0.4 per cent to US$68.78 a barrel and safe-haven metal gold slipped 0.5 per cent to US$3,331 an ounce.
– Reuters
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