PARIS (Reuters) – The New York Stock Exchange opened higher on Thursday, with the Nasdaq lifted by forecasts from Taiwan Semiconductor Manufacturing (TSMC) that allowed the semiconductor sector and large U.S. technology caps to rebound after a massive sell-off.
In early trading, the Dow Jones Industrial Average gained 41.2 points, or 0.10 percent, to 41,239.28 after hitting a third consecutive closing high on Wednesday. The broader Standard & Poor’s 500 gained 0.28 percent to 5,604.11.
The Nasdaq Composite gained 0.44%, or 79.46 points, to 18,076.38.
TSMC’s Wall Street-listed stock rose 2.01% as the Taiwanese group raised its third-quarter revenue forecast amid strong demand in artificial intelligence (AI). In its wake, ARM gained 1.11%, Advanced Micro Devices 0.85%, INTEL 1.82%, and Marvell Technology 0.80%.
Tech giants like Apple (+0.50%), Meta Platforms (+2.06%), Tesla (+0.81%), Amazon (+0.51%) and Nvidia (+1.88%) are also in demand. The chip index (+1.02%), which recorded its worst session in four years on Wednesday due to fears of worsening trade tensions between the United States and China against a backdrop of technological rivalry, is rebounding. The “tech” index is up 0.59%.
The current quarterly earnings season will be an important test of whether the financials of mega-cap companies, which have driven stock indices to record highs, will meet investors’ expectations as Netflix (+0.64%) is due to report results after the close.
“While the strong performance of the technology sector year-to-date creates a risk of near-term volatility, we continue to believe it is important for investors to have sufficient long-term exposure to the AI theme,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
A sign of investors’ good mood, the volatility index, presented as the barometer of fear, fell slightly, by 1.38%, to 14.28 points.
Excluding new technologies, Warner Bros Discovery jumped 3.60% after news that the group had discussed a plan to separate its online streaming and studio activities from its television networks, in a bid to boost its share price.
Beyond Meat plunged 9.62% following a report from the Wall Street Journal that the company is in talks with bondholders to restructure its balance sheet.
On the macroeconomic indicators side, business conditions in the Philadelphia region improved in July with the Philly Fed index at 13.9 after 1.3 in June, while unemployment claims increased in the United States to 243,000 last week, supporting the prospect of a slowdown in the labor market.
(Written by Claude Chendjou, edited by Kate Entringer)
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