Equities Gain as Tech Results Reignite Confidence: Markets Wrap
(Bloomberg) — Global stocks rose on Thursday as strong technology earnings shifted focus away from the lingering threat of a US-China trade war.
Futures for the Nasdaq 100 advanced 0.5% as Taiwan Semiconductor Manufacturing Co. hiked its revenue-growth target and raised its forecast for capital spending. Artificial intelligence-linked US heavyweights including Nvidia Corp., Micron Technology Inc. and Broadcom Inc., were among the biggest premarket gainers. Contracts for the S&P 500 added 0.4%.
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Europe’s Stoxx 600 also rose, with Nestlé SA jumping more than 8% after reporting a rebound in sales and unveiling plans to cut 16,000 jobs. An MSCI gauge for Asian shares climbed 0.9%.
Meanwhile, gold soared to as high as $4,242 an ounce, taking gains this year to more than 60% as trade frictions and expectations for further Federal Reserve interest-rate cuts lured buyers. The dollar slipped for a third day and Treasuries were little changed. French bonds underperformed European peers as premier Sebastien Lecornu survived two no-confidence votes.
TSMC’s results underscored how leading chipmakers stand to be among the biggest winners from an AI investment boom that’s expected to top $1 trillion in the coming years. The market’s response showed investors remain optimistic about the corporate outlook, even as renewed trade tensions cast a shadow.
“We’re seeing that companies continue to spend, AI technology has been adopted and keeps being adopted,” said Anthi Tsouvali, a multi-asset strategist at UBS Global Wealth Management. “Equities should continue to move upwards. But having said that, I don’t think that it’s going to be a straight line.”
After several months of relative calm, friction between Washington and Beijing has flared up again, with stocks seeing sharp swings as dip buyers step in following selloffs. The latest development saw Treasury Secretary Scott Bessent float the possibility of extending a pause on import duties if China halts its planned controls on rare earths.
Beating Estimates
Despite the tensions, corporate earnings have reminded investors that the fundamentals for stocks remain strong at a time when the Fed is cutting rates. Among S&P 500 companies that have reported earnings through Wednesday, 78% have beaten estimates, according to data compiled by Bloomberg Intelligence.
Investors are getting so used to “political ups and downs, that they are now realizing that unless they hurt the earnings of companies, which are the real drivers of risk markets, then they really cannot affect equity markets,” Fabiana Fedeli, chief investment officer for equities, multi-asset and sustainability at M&G Investments, told Bloomberg TV.
Corporate News:
Salesforce Inc. rises more than 5% in premarket trading after the software company forecast that revenue growth will accelerate to double digits in the coming years. United Airlines Holdings Inc. shares fell as Bloomberg Intelligence noted that the airline’s results showed signs of saturation. UBS Group AG is increasing scrutiny of the sources of client money in its fast-growing Asian wealth hubs, pressing some customers into greater disclosures. Infosys Ltd. raised the lower end its forecast for yearly revenue, banking on a revival in spending on technologies such as artificial intelligence. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.4% as of 6:52 a.m. New York time Nasdaq 100 futures rose 0.5% Futures on the Dow Jones Industrial Average rose 0.4% The Stoxx Europe 600 rose 0.4% The MSCI World Index rose 0.2% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1654 The British pound rose 0.2% to $1.3433 The Japanese yen was little changed at 151.20 per dollar Cryptocurrencies
Bitcoin rose 0.3% to $111,551.9 Ether rose 2.3% to $4,052.76 Bonds
The yield on 10-year Treasuries was little changed at 4.02% Germany’s 10-year yield was little changed at 2.57% Britain’s 10-year yield declined one basis point to 4.53% Commodities
West Texas Intermediate crude rose 0.6% to $58.62 a barrel Spot gold rose 0.8% to $4,241.29 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy, Sagarika Jaisinghani and Neil Campling.
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