Stock Futures Advance as TSMC Earnings Fuel Chip Stock Rebound

U.S. stock futures rose in premarket trading on Thursday as solid quarterly results from the world’s largest contract chipmaker added fuel to yesterday’s semiconductor stock rebound.

Nasdaq 100 futures contracts were up nearly 1% early Thursday morning, while S&P 500 futures advanced 0.5% and Dow futures were up 0.2%, building on yesterday’s record close.

Shares of Taiwan Semiconductor Manufacturing Co. (TSM), a key chip manufacturer for tech giants like Apple (AAPL) and Nvidia (NVDA), jumped nearly 10% Thursday after the company reported strong quarterly results and offered an upbeat outlook on the strength of demand for artificial intelligence (AI). Thursday’s jump put TSMC just shy of a $1 trillion market capitalization.

TSMC’s results lifted the shares of other semiconductor and AI-related companies including Nvidia and AI server maker Super Micro Computer (SMCI).

Shares of Expedia (EXPE) also jumped in premarket trading amid reports that Uber (UBER) executives had considered making a takeover bid, though no discussions are currently underway. Uber shares slid. Netflix (NFLX) stock ticked up ahead of its earnings report after the closing bell.

Treasury yields climbed after consumer spending and unemployment data came in stronger than expected. U.S. retail sales increased by 0.4% in September, slightly ahead of expectations. Initial jobless claims for the week ending Oct. 12 totaled 241,000, about 20,000 below estimates and the prior week’s total.

Yields have ticked up since the Federal Reserve began cutting interest rates last month as a string of strong economic reports have tempered Wall Street’s expectations for more aggressive interest rate cuts in the months ahead. The yield on the 10-year Treasury, which had declined in each of this week’s previous sessions but held slightly above the psychologically significant 4% level, jumped to 4.07% on Thursday.

Stocks rose yesterday as Nvidia led a rebound from Tuesday’s chip stock sell-off, which followed disappointing results from chipmaking equipment manufacturer AMSL (ASML). Bank stocks also advanced yesterday after strong results from Morgan Stanley (MS), offsetting a decline among tech mega caps.