Nasdaq 100: Chip Stocks Rally as TSMC Lifts Forecast, Retail Sales Outpace Expectations

Stock Futures Rise as Chip Stocks Rebound and Economic Data Exceeds Expectations

Stock futures climbed on Thursday, lifted by strong earnings in the semiconductor sector and better-than-expected U.S. economic data. The positive market sentiment helped ease recession fears, while chipmakers saw a notable rebound after recent declines.

At 13:07 GMT, Dow Futures are trading 43416.00, up 74.00 or +0.17%. S&P 500 Index Futures are trading 5916.75, up 29.75 or +0.51% and Nasdaq 100 Futures are trading 20547.25, up 197.75 or +0.97%.

Chip Stocks Lead Market Gains

Semiconductor stocks played a key role in Thursday’s market rally, with Taiwan Semiconductor Manufacturing Company (TSMC) leading the charge. TSMC’s U.S.-listed shares surged 8% after reporting robust third-quarter earnings. The company announced net revenue of $23.5 billion, a 36% year-over-year increase, driven by strong demand for artificial intelligence (AI) chips. Additionally, TSMC raised its fourth-quarter revenue forecast, projecting a 35% year-over-year growth, which buoyed investor sentiment.

Nvidia, another major player in AI, saw its stock rise 3% in premarket trading, following TSMC’s upbeat performance. Advanced Micro Devices (AMD) also gained more than 2%, contributing to the broader tech sector rally. The chip industry, which has faced volatility in recent weeks, saw renewed confidence from investors as TSMC’s results pointed to continued strength in AI-driven demand.

Retail Sales and Jobless Claims Boost Optimism

Economic data released on Thursday further supported market gains. The Commerce Department reported that U.S. retail sales for September grew by 0.4%, surpassing the 0.3% consensus forecast. Excluding autos, sales rose by 0.5%, significantly outpacing expectations of a 0.1% increase. This suggests that consumer spending, a key driver of economic growth, remains resilient despite concerns about inflation and higher interest rates.

In addition, initial jobless claims for the week ending October 12 came in lower than expected, signaling a still-strong labor market. These figures provided further evidence that the U.S. economy continues to expand, diminishing fears of an impending recession.

Lucid Group Slumps on Stock Offering

While semiconductor stocks rallied, Lucid Group faced significant losses in premarket trading, with shares falling 20%. The electric vehicle (EV) maker announced a public offering of 262.5 million shares, aimed at raising additional capital. The offering is part of a broader deal involving Lucid’s largest shareholder, Saudi Arabia’s Public Investment Fund (PIF), which will also purchase 374.7 million shares in a private placement. Despite these efforts to strengthen its balance sheet, Lucid has struggled with higher costs and weaker-than-expected demand, leading to a 22% decline in its stock this year.

Market Forecast

With strong earnings from key tech players like TSMC and encouraging economic data, the short-term outlook for stock futures appears bullish. Continued strength in AI-related demand is likely to support semiconductor stocks, while robust retail sales and a resilient labor market should further underpin overall market sentiment. However, investors will keep an eye on developments in the EV sector, as companies like Lucid face challenges in maintaining growth amidst capital-raising efforts.