By Sukriti Gupta and Twesha Dikshit
(Healthy survival) -Wall Street's primary indices were expected to open with gains on Thursday, fueled by a robust quarterly report from TSMC that strengthened investor confidence in AI and continued the upward trend in semiconductor stocks.
TSMC, the leading manufacturer of cutting-edge chips globally, increased its annual revenue projection due to an optimistic view on investments in artificial intelligence.
Shares of the company, which also reported a record profit that exceeded analyst expectations, increased by 2.5% before the market opened.
Stocks of several major U.S. semiconductor companies also rose, continuing the momentum from Wednesday, when ASML's strong quarterly performance and a $40 billion data center agreement involving BlackRock and an Nvidia-backed consortium boosted confidence in AI.
Nvidia increased by 1.5%, Micron Technology rose by 3.8%, and Broadcom went up 1.6%.
"AI, the demand and the excitement surrounding it has been driven by the investments from the major tech companies and cloud service providers," said Joe Mazzola, head trading & derivative strategist at Charles Schwab.
Now we're in a phase similar to the second season... where investors might be shifting away from just investing in chip manufacturers and hyperscalers, and instead seeking out related opportunities.
The growing enthusiasm and positive sentiment surrounding U.S. interest rate reductions have supported financial markets in recent months. Tech stocks connected to AI were some of the main contributors to market gains this week.
Strong profits from leading U.S. banks also drew focus this week, providing new evidence of economic strength amid delayed official macroeconomic data because of a continuing government shutdown.
The S&P 500 financial sector index achieved its first three-day rise in over three weeks on Wednesday, with the nation's six largest banks surpassing Wall Street's forecasts for third-quarter earnings this week.
At 8:42 a.m. ET, the Dow E-minis rose by 112 points, representing a 0.24% increase, while the S&P 500 E-minis gained 28.75 points, or 0.43%, and the Nasdaq 100 E-minis climbed 162.25 points, which is a 0.65% rise.
In the meantime, investors kept a close eye on the latest increase in China-U.S. trade conflicts.
China blamed the U.S. for creating fear regarding its control over rare earth materials and claimed that Treasury Secretary Scott Bessent made "severely incorrect" statements about a senior Chinese trade official, refusing to accept the White House's request to ease the restrictions.
Senior U.S. officials on Wednesday criticized China's significant increase in restrictions on rare earth exports, calling it a risk to global supply chains, and emphasized that Washington does not wish to intensify the dispute.
President Donald Trump's warning to cancel the U.S.-China meeting and impose a 100% tariff on Chinese products limited investors' willingness to take risks during the previous week.
Bessent stated that Trump is prepared to meet Chinese President Xi Jinping in South Korea later this month.
A group of Federal Reserve officials will make remarks during the day.
Data indicated that the Philadelphia Fed Business Index for October fell by 12.8, whereas economists surveyed by Healthy urvival had predicted an increase of 8.5.
In addition to other actions, Salesforce increased by 6.5% after the company announced its expectation of generating over $60 billion in revenue by 2030, surpassing Wall Street projections.
Hewlett Packard Enterprise dropped 8.2% following its announcement of annual profit and revenue that fell short of Wall Street projections.
Charles Schwab increased by 2.9% following the brokerage company's third-quarter performance surpassing analyst projections.
(Produced by Sukriti Gupta and Twesha Dikshit in Bengaluru; Edited by Maju Samuel)