Technology stocks were poised for a small rebound on Thursday from the Nasdaq’s worst day since 2022, as positive results from TSMC (TSM) helped ease concerns about the AI trade ahead of Netflix (NFLX) earnings.
The tech-heavy Nasdaq Composite (^IXIC) rose about 0.7%, while the S&P 500 (^GSPC) gained about 0.3%. But the Dow Jones Industrial Average (^DJI) fell about 0.3%, moving away from the all-time closing high for the blue-chip index.
Wall Street’s rally faced increasing turbulence this week as political, geopolitical and trade risks rattled a market finally confident that the Federal Reserve will cut interest rates this year.
A sign of a slowing labor market boosted hopes for a rate cut on Thursday. The number of continuing applications for unemployment benefits again reached its highest level since November 2021, suggesting out-of-work workers are struggling to find new jobs.
The Nasdaq fell more than 2.7% on Wednesday, in part due to a potential escalation in U.S. export restrictions on China. Chip stocks Nvidia (NVDA), TSMC and ASML (ASML) were hit hard amid a rotation of tech leaders to lesser-known parts of the market.
Strong quarterly earnings from TSMC on Thursday helped lift the mood. The Taiwanese chip giant beat earnings expectations with a 36% jump and raised its 2024 sales forecast to signal confidence in the AI boom. Shares of the supplier to Nvidia and Apple (AAPL) rose.
Netflix (NFLX) is the headliner on Thursday’s earnings calendar, scheduled to be released after the market closes. Expectations are high for the streaming company, though some on Wall Street are noting that the stock is already nearing record highs.
Elsewhere, investors are watching the U.S. presidential race with caution, given the potential impact Republican candidate Donald Trump could have on markets. President Joe Biden has tested positive for the coronavirus at a key point in his campaign, and key Democratic leaders have revived talk of a U.S. exit.
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