U.S. stock markets experienced gains on Thursday, primarily driven by encouraging earnings reports from TSMC, a major player in semiconductor manufacturing. This uplift has sparked optimism around artificial intelligence (AI) demand while alleviating worries about the ongoing trade tensions between the U.S. and China that have been exacerbated by former President Trump.
The Nasdaq Composite Index climbed by 0.6%, while the S&P 500 saw an increase of around 0.4%. Stocks associated with AI, including Nvidia, benefited from TSMC’s positive performance. The Dow Jones Industrial Average, which is less reliant on technology stocks, rose by 0.2%.
Interestingly, TSMC has adjusted its growth forecast for sales in 2025 upward for the second time this year, which brings hope for sustained growth driven by rising AI demand.
Moreover, Nvidia, which supplies semiconductors for Apple, reported nearly a 40% jump in quarterly profits last quarter, surpassing analyst expectations and marking a record high. Other AI-focused companies such as Broadcom and Micron (MU) also saw stock value increases.
The upbeat sentiment in the market has been further supported by solid quarterly results from various banks and signals from the Federal Reserve regarding possible interest rate cuts this year.
On the flip side, the uncertainty surrounding the U.S.-China trade situation continues to be a point of concern, contributing to market fluctuations. Trump acknowledged the tensions during a recent press conference, confirming the ongoing trade conflict, despite Treasury Secretary Scott Bessent suggesting the potential for an extended ceasefire.
These contrasting messages follow Trump’s recent threats to impose additional tariffs on China, which have raised concerns about escalating trade restrictions. Additionally, the ongoing U.S. government shutdown now in its third week has hindered the dissemination of vital economic data, with expectations it could persist into November.
