Stock market today: Dow, S&P 500, Nasdaq jump as TSMC outlook prompts chip stock rally

8 months ago

Updated Thu, Oct 17, 2024, 6:44 AM 2 min read

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Techs led US stocks higher on Thursday as TSMC's (TSM) upbeat outlook eased worries about AI chip demand, with the next batch of earnings on deck. Strong retail sales data also helped lift the major averages.

The tech-heavy Nasdaq Composite (^IXIC) rose more than 0.9%, while the S&P 500 (^GSPC) added 0.6%. The Dow Jones Industrial Average (^DJI) rose above the flatline to hold near record highs after the major averages rebounded to close with gains.

Contract chipmaker TSMC posted a 54% jump in quarterly profit to beat Wall Street estimates and raised its forecast for 2024 revenue growth amid surging AI demand. The outlook boost from the main chipmaker for Apple (AAPL) and Nvidia (NVDA) reassured a market spooked by ASML's (ASML) downbeat sales forecast, reviving hopes for an AI boom.

TSMC's US-listed shares climbed 8%, poised to cross a $1 trillion market valuation if the gains hold in the regular session. Its forecast helped spur a rally chip stocks including Arm (ARM), Broadcom (AVGO), and Nvidia.

On the data front, retail sales jumped 0.4%, more than the 0.3% rise expected, giving credence to the argument the economy could be reaccelerating following a surprisingly strong September jobs report. Weekly jobless claims came in at 241,000, far below expectations, and a drop from the prior week's upwardly revised 260,000. The data released Thursday morning was watched by investors debating whether the Federal Reserve will hold off from cutting interest rates in November.

After a stellar showing by big banks, the focus is now on Big Tech earnings to wipe away the disappointments of the last quarter. After the bell, Netflix becomes the first "Magnificent Seven" megacap to report, with Wall Street on watch for price-hike news to potentially lift the stock.

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