U.S. stocks lost early gains on Thursday as investors navigated mixed signals regarding AI demand and the ongoing U.S.-China trade tensions sparked by President Trump.
The Nasdaq Composite Index, heavily weighted in tech, saw a slight increase of 0.2% as shares of Nvidia and other AI-focused companies rose, boosted by strong earnings from Taiwan Semiconductor Manufacturing Company (TSMC). On the other hand, both the S&P 500 and Dow Jones Industrial Average remained nearly unchanged.
Chip stocks initially surged on Thursday after TSMC adjusted its 2025 sales growth projection upward for the second time this year, hinting that the boom in AI demand might not fade away anytime soon.
Nvidia and Apple’s main semiconductor supplier reported a nearly 40% profit increase last quarter, exceeding expectations and marking a record high. AI-related stocks such as Nvidia, Broadcom, and Micron saw gains as a result.
However, the overall volatility in the market this week is worth noting, especially given the strong quarterly results from major banks and indications from the Federal Reserve that interest rates might be lowered again this year.
U.S.-China trade tensions are again in focus after President Trump recognized on Wednesday that relations with China are still strained. “Well, we are in a trade war now,” he remarked in response to a question from a reporter about a potential prolonged conflict. Meanwhile, Treasury Secretary Scott Bessent suggested that a temporary trade ceasefire could be extended.
These conflicting signals come amid threats from Trump to further tighten trade with China, including potential new tariffs in November due to China’s latest sanctions and export controls.
Additionally, the government shutdown has now entered its third week, cutting off access to crucial economic data for the Fed and Wall Street, and it is expected to persist into November.
