U.S. stock futures on Thursday looked set for a tech-led comeback as TSMC (TSM)’s strong earnings boosted AI expectations and investors braced for Netflix’s (NFLX) earnings season to get into full swing. It rose.
Futures for the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) rose about 0.2% after recently closing lower. Nasdaq 100 (^NDX) futures also rose 0.2% as tech stocks ended the day down more than 1%.
Stocks have struggled on concerns that inflation is no longer cooling and that the Federal Reserve may ease its rate cuts. For this reason, company earnings are in the spotlight as investors focus on how well reports match their lofty expectations.
Signs of strong AI demand in TSMC’s results revived optimism for semiconductor and tech stocks (XLK), driving Wednesday’s pullback. The Taiwanese semiconductor giant, considered an industry leader, demonstrated its “insatiable” appetite for AI by posting a higher than quarterly profit.
The focus of earnings has now shifted to Netflix, the first reporting company in the ‘Magnificent’ group. The streaming leader’s financial update later on Thursday is being seen by some as the first real test for stocks this earnings season, as big-cap tech companies continue to play a big role in pushing the market higher. It is believed that this will happen.
Meanwhile, given the possibility of a “no-landing” for the economy, the market is still paying close attention to the debate over whether the U.S. Federal Reserve (Fed) may decide not to cut interest rates this year. The document includes updates on unemployment claims and the attendance of policymakers including John Williams and Rafael Bostic.
U.S. Treasury yields continued to fall from recent five-month highs, reducing pressure on stock prices. The 10-year US Treasury yield (^TNX) fell about 2 basis points to trade around 4.56%.
live2 updates
