Tech stocks saw a slight recovery on Thursday after the Nasdaq’s recent decline, with TSMC’s positive results helping to ease concerns about the AI sector. This comes ahead of Netflix’s earnings report.
The Nasdaq Composite rose by 0.2%, while the S&P 500 edged up by 0.2%. The Dow Jones Industrial Average remained steady, following a recent all-time high.
This week, the market has faced challenges from various factors such as political uncertainties, geopolitical tensions, and trade risks. Despite this, there is growing confidence that the Fed will cut interest rates later this year.
On Thursday, a report showing a cooling labor market further fueled expectations for a rate cut. The number of continuing unemployment benefit applications reached its highest level since November 2021, indicating difficulties for unemployed individuals in finding new jobs.
Wednesday saw a significant drop in the Nasdaq, partly due to concerns about increased restrictions on exports to China. Chip stocks like Nvidia, TSMC, and ASML were particularly affected, as investors shifted away from tech leaders towards other market sectors.
TSMC’s strong quarterly earnings on Thursday boosted market sentiment. The chip giant surpassed profit expectations with a 36% increase and raised its sales outlook for 2024, signaling optimism about the AI industry. Shares in TSMC suppliers like Nvidia and Apple also saw gains.
Netflix’s earnings report after the market close is highly anticipated. While expectations are high for the streaming giant, some analysts caution that the stock is already trading near record levels.
Meanwhile, investors are closely monitoring the US presidential race, particularly given the impact that Republican nominee Donald Trump could have on the markets. President Joe Biden’s COVID-19 diagnosis and discussions about a potential exit by key Democratic leaders are adding to the political uncertainty.