Dow Jones futures rose slightly early Thursday, while S&P 500 futures and especially Nasdaq futures climbed. Taiwan Semiconductor reported strong earnings and guidance, sending its shares surging and lifting Nvidia, Broadcom and other AI chipmakers. Retail sales will headline big economic reports before the open.
Uber Technologies has considered a possible bid for travel website Expedia, the Financial Times reported Wednesday night. Uber stock fell Thursday morning while Expedia jumped.
The stock market rally saw modest-to-solid gains on the major indexes Wednesday. The Dow Jones hit a record close while the small-cap Russell 2000 jumped to a two-year closing high.
Nuclear plays skyrocketed as Amazon.com became the latest tech titan to embrace nuclear power. But the stocks are extended.
Nvidia led AI chip plays higher, closing in range of a buy point. Taiwan Semi is between buy points. Broadcom is just below a handle entry.
Nvidia stock is on IBD Leaderboard, SwingTrader and the IBD 50. Broadcom stock is on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures were 0.2% above fair value. S&P 500 futures rose 0.5%. Nasdaq 100 futures climbed 0.9%, led by Taiwan Semiconductor and Nvidia.
The 10-year Treasury yield edged up to 4.04%.
As expected, the European Central Bank cut interest rates for the third time this year, saying the disinflationary process is "well on track."
Chinese property stocks tumbled as Housing Ministry measures to support housing underwhelmed. Hong Kong's Hang Seng Index reversed from strong gains to a 1% loss.
At 8:30 a.m. ET, investors will get September retail sales, the October Philly Fed manufacturing index and weekly jobless claims. September industrial production (9:15 a.m.) and the October Housing Market Index (10 a.m.) will follow.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Taiwan Semiconductor Earnings
Taiwan Semiconductor earnings solidly beat third-quarter views, with revenue up 36% to $23.5 billion. AI and other advanced chips accounted for 69% of revenue. The world's largest chip foundry also guided higher for the current Q4. Taiwan Semi makes chips for Nvidia, Broadcom, Apple and many others.
TSM stock spiked nearly 10% in premarket trade, signaling a gap to a new high. Shares were already extended from a cup-with-handle buy point.
Taiwan Semiconductor stock is set to open above a $1 trillion valuation after closing at $972.4 billion on Wednesday.
Nvidia stock rose 3% to nearly 140, close to the all-time high of 140.76 that is the ultimate buy point. On Wednesday, Nvidia stock rose 3.1% to 135.72, still within range of a 131.26 entry.
Broadcom stock climbed almost 3% before the open to 182. That would retake a 180.25 handle entry.
Taiwan Semi also expects capital spending to top $30 billion in 2024, with higher capex in 2025. TSMC is one the biggest buyers of chip equipment. On Tuesday, Dutch chip-gear giant ASML announced a huge bookings shortfall and weak guidance, sending ASML and chip-gear peers plunging. ASML stock edged higher Wednesday, while Lam Research and other big names rose modestly.
Stock Market Rally
The stock market rally had a healthy session, with small caps and certain sectors significantly outpacing the major indexes.
The Dow Jones Industrial Average climbed 0.8% in Wednesday's stock market trading, with its best-ever close. The S&P 500 index rose 0.5%, near all-time highs. The Nasdaq composite advanced 0.3%. The small-cap Russell 2000 jumped 1.6%, just below 34-month intraday high set July 31 and the highest close since late 2021.
U.S. crude oil prices dipped 0.3% to $70.39 a barrel.
The 10-year Treasury yield fell 2 basis points to 4.015%, extending a recent pullback.
Bitcoin rose 1.2% to $67,742.75 as of 4 p.m. ET, up 8% so far this week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 0.8%. The iShares Expanded Tech-Software Sector ETF fell 0.45%. The VanEck Vectors Semiconductor ETF edged up 0.1%. Nvidia is the No. 1 holding with Taiwan Semiconductor stock and Broadcom key components. But ASML stock and chip-gear makers also have a notable weight.
ARK Innovation ETF advanced 0.85% and ARK Genomics ETF bounced 1%.
SPDR S&P Metals & Mining ETF rallied 2.1%. U.S. Global Jets ETF ascended 4.1%. SPDR S&P Homebuilders ETF stepped up 1.2%. The Energy Select SPDR ETF gained 0.5% and the Health Care Select Sector SPDR Fund advanced 0.3%.
The Industrial Select Sector SPDR Fund climbed 0.8%. The Financial Select SPDR ETF popped 1.2%.
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What To Do Now
The stock market rally is doing well, perhaps even better than the major indexes would indicate. A lot of stocks have been flashing buy signals and powering higher.
Nuclear stocks have been huge winners in recent days and weeks, but most of them are extended, often massively. When you see stocks jump 10%, 20%, even 50% in just a few days, it's hard to not have FOMO. But don't chase after extended stocks. The risks of a significant pullback are too high.
Pay attention to nuclear plays, looking for safer entries. But for now, most of these names are out of the buy zone containment field. Treat nuclear stocks as radioactive, for now, if you don't already have a position.
There were some stocks that flashed buy signals Wednesday and are still in range, including United Therapeutics, KB Home. Nvidia stock is still actionable.
This is why IBD bangs the drums on building up your watchlists and staying engaged. If you want catch the big winners, you have to have those names on your radar before they take off, then be ready to act when the time is right. Running your screens will also keep you in tune with leading stocks from across different sectors, helping you get a diverse mix of leaders.
Remember, if you're already heavily invested, you don't have to make a lot of moves. A lot of money is in the siting, even for active investors.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
