Taiwan Semiconductor Manufacturing Company (TSMC) reported positive results, which are expected to lead gains in the Nasdaq, Dow, and S&P 500 today. Wall Street looks to continue its momentum as earnings season progresses with key financial reports from Bank of America and Morgan Stanley. In Europe, the French CAC 40 outperformed on Thursday, driven by a surge in luxury-goods stocks.
Richemont, which owns brands like Cartier and Montblanc, saw its shares soar by 17% after exceeding analyst expectations. Shares of Kering, LVMH Moet Hennessy Louis Vuitton, and Hermes also jumped. The rally extended to London, where Burberry gained 10%.
Russ Mould, investment director at AJ Bell, said, “The bullish nature of the trading update has certainly got investors searching for opportunities across the sector.”
U.S. bond markets stabilized following a dramatic session earlier in the week.
Positive earnings boost market outlook
The 10-year Treasury yield fell 13.4 basis points on Wednesday to 4.653%, in response to slightly softer-than-expected inflation data.
Michael Brown, senior research strategist at Pepperstone, said, “I’d argue that the majority of these moves were an unwind of extreme hawkish positioning.”
Several major companies are scheduled to report earnings on Thursday. Before the market opens, look out for results from Bank of America, Morgan Stanley, UnitedHealth, U.S. Bancorp, PNC Financial Services, and First Horizon. After the market closes, J.B. Hunt Transport Services will release its earnings.
On Wednesday, the Dow Jones Industrial Average rose by 703 points to 43,222, the S&P 500 increased by 107 points to 5,950, and the Nasdaq Composite gained 467 points, reaching 19,511. Kathleen Brooks, research director at XTB, noted, “The market continues to expect one rate cut from the Fed this year, but they expect U.S. interest rates to end the year below the 4% handle, boosting risk sentiment.”
Earnings from banks helped drive the midweek bounce, and now tech stocks are set to lead once again following a positive earnings report from TSMC, which saw its shares rise by 4%. Russ Mould of AJ Bell stated, “The artificial intelligence theme looks to be alive and kicking based on chip maker TSMC’s latest record quarterly numbers.”
However, early gains for U.S. index futures were partially offset by reports that China will investigate potential illegal dumping of mature chips by U.S. firms.
As traders keep a close eye on upcoming data and earnings reports, the market’s short-term direction remains dynamic but optimistic.
