Nasdaq and S&P Futures Rise on Chip Stock Rally Amid Market Volatility
Futures tied to the Nasdaq and S&P 500 edged higher on Thursday after strong results from Taiwan’s TSMC lifted chipmakers boosting chip stocks. This comes after a volatile session marked by concerns over the Federal Reserve’s independence. At 5:45 a.m. ET, Dow futures slipped by 0.05%, while S&P 500 futures gained 0.1% and Nasdaq futures climbed 0.18%.
TSMC Results Boost Chip Stocks
The world’s leading producer of AI chips, Taiwan Semiconductor Manufacturing Co (TSMC), reported record quarterly profits, citing surging demand for artificial intelligence technology. This led to gains across chipmakers in premarket trading. US-listed shares of TSMC rose 4%, while Advanced Micro Devices (AMD) advanced 1.2%. Marvell, Nvidia, and Super Micro Computers also recorded small gains between 0.7% and 1.3%.
Meanwhile, Netflix shares edged up 0.5% ahead of its quarterly earnings report, due after market close.
Analysts at HSBC noted that investors might be underestimating the potential for strong US corporate earnings this quarter. Economic data so far has not shown significant signs of weakening.
Fed Concerns and Rate Cut Speculation
US markets were unsettled in the previous session after reports suggested President Donald Trump was considering removing Federal Reserve Chair Jerome Powell. Although Trump later denied this, ongoing tensions between the White House and the Fed have kept investors cautious. The possibility of political interference has raised concerns about the central bank’s independence.
These developments impacted rate cut expectations. Traders now see a 55% chance of a rate cut in September, according to CME’s FedWatch tool, though a July cut is considered unlikely.
Focus on Tariffs and Retail Sales Data
Investors are also watching the looming threat of new tariffs, with an August 1 deadline approaching. Trump indicated that trade deals with India and possibly Europe could be finalised soon, which might ease some tensions.
Attention now shifts to June’s retail sales figures, due later in the day, for insights into consumer spending trends. Several Federal Reserve officials are scheduled to speak, which could further influence market sentiment.
with inputs from Reuters