S&P 500, Nasdaq futures edge higher after TSMC profits beat forecasts

Investing.com -- US stock index futures pointed higher on Thursday after Taiwan Semiconductor Manufacturing Co. -- the world’s biggest contract chipmaker -- posted a stronger-than-expected third-quarter profit on Thursday that was driven by sustained demand from the artificial intelligence industry.

By 08:01 ET (12:01 GMT), the S&P 500 futures contract had gained 23 points or 0.4% and Nasdaq 100 futures had added 160 points or 0.8%, and Dow futures had inched up by 33 points or 0.1%.

The 30-stock Dow Jones Industrial Average notched its third record close in four sessions on Wednesday. The benchmark S&P 500 and tech-heavy Nasdaq Composite also gained.

Shares in Morgan Stanley (NYSE:MS ) surged by 6.5% to end at an all-time peak after the lender reported solid profits fueled by improved investment banking revenue. Larger regional banks advanced as well, helping investors look past a weak print from TSMC peer ASML (AS:ASML ).

Meanwhile, the Russell 2000 index and S&P Small Cap 600 both logged their highest finishing levels since 2021, in a sign that some investors may be rotating out of pricier tech names and into less expensive segments.

TSMC income surges past estimates

TSMC clocked a net profit of T$325.26 billion ($10.1 billion) in the three months to September 30, it said in a press release. The figure was higher than a Reuters estimate of T$300.2 billion.

The chipmaker also provided an upbeat outlook for the current quarter, partly citing improved capacity utilization. US-listed shares in the Taiwanese firm jumped by more than 6% in premarket trading.

Third-quarter revenue climbed to T$759.69 billion, up 39% from last year. CFO Wendell Huang said fourth quarter revenue will be between $26.1 billion and $26.9 billion, with a gross margin of 57% and 59%, while annual revenue is also expected to grow around 30%.

Sales were bolstered chiefly by TSMC's advanced 3-nanometer chips, which accounted for 20% of overall revenue from wafers, the company said.

"We continue to observe extremely robust AI-related demand from our customers," CEO C.C. Wei noted in a post-earnings webcast.

Thursday's earnings come just days after semiconductor equipment maker ASML (NASDAQ:ASML ) unveiled a tepid sales outlook for 2025 due in part to slow chip demand from sectors outside of AI.

Earnings parade, retail sales on tap

Streaming giant Netflix (NASDAQ:NFLX ) will report its earnings on Thursday, along with fund manager Blackstone (NYSE:BX ) and biotechnology firm Intuitive Surgical (NASDAQ:ISRG ).

These precede results from tech titans Alphabet (NASDAQ:GOOGL ) and Tesla (NASDAQ:TSLA ) in the first half of next week, along with several other major US companies.

Focus this Thursday will also be on retail sales and industrial production for more cues on the American economy, with conviction growing that the Federal Reserve will cut interest rates at a slower pace in the coming months.

US retail sales are tipped to have risen by 0.3% in September, accelerating from 0.1% in the prior month, according to economists' estimates of the Commerce Department data.

In August, the figure, which includes mostly goods and is not adjusted for inflation, unexpectedly climbed, while the July reading was also revised higher.

(Ambar Warrick contributed reporting.)

Source: Investing.com