Tech stocks made a small comeback on Thursday after the Nasdaq’s worst day since 2022, with TSMC’s upbeat results helping to calm worries about the AI trade ahead of Netflix earnings.
The tech-heavy Nasdaq Composite rose about 0.7%, while the S&P 500 edged up 0.3%. However, the Dow Jones Industrial Average slid roughly 0.3%, coming off an all-time closing high for the blue-chip index.
The rally on Wall Street has faced increasing turbulence this week due to political, geopolitical, and trade risks unsettling a market that was confident the Fed would cut interest rates this year.
A sign that the labor market is cooling further bolstered hopes for a rate cut on Thursday. The number of continuing applications for unemployment benefits hit its highest level since November 2021, indicating that unemployed workers are struggling to find new jobs.
The Nasdaq had dropped over 2.7% on Wednesday, partly due to concerns about potential US curbs on exports to China. Chip stocks like Nvidia, TSMC, and ASML all took a hit as investors rotated from tech leaders into other parts of the market.
TSMC’s strong quarterly earnings on Thursday helped improve sentiment. The Taiwanese chip giant beat profit expectations with a 36% jump and raised its 2024 sales outlook, signaling confidence in the AI boom. Shares in the supplier to Nvidia and Apple inched higher.
Investors are also keeping an eye on the US presidential race, with Republican nominee Donald Trump potentially impacting the markets. President Joe Biden’s COVID-19 diagnosis and talk of a Democratic exit have added to the uncertainty.
Overall, tech stocks rebounded on Thursday, led by TSMC’s positive results, after a turbulent week on Wall Street. The market remains cautious amid ongoing political and economic uncertainties.
