Nasdaq 100 and S&P500: Chip Stocks Power US Indices Rally Today After Two-Day Slide

Chip Stocks Lead Wall Street Rally After Two-Day Decline

The major U.S. stock indexes are trading higher shortly after the opening on Thursday. The rally is being driven by renewed demand for chip stocks as investors attempt to rebound from two straight losing sessions.

At 15:02 GMT, the benchmark S&P 500 Index is trading 6,962.88, up 36.28 or +0.52%. The tech-heavy Nasdaq Composite is at 23,648.253, up 176.504 or +0.75%, and the blue chip Dow Jones Industrial Average is trading 49,355.60, up 205.97 or +0.42%.

Technology Surges While Energy Slumps in Sector Reversal

Sector analysis reveals a flip-flop from the same time yesterday, with Technology leading the way with a 1.41% gain and Energy dropping 1.50%. Seven out of 11 sectors are in the green early Thursday.

Taiwan Semi’s Record Earnings Ignite Chip Stock Momentum

Chip stocks are powering the technology sector higher after Taiwan Semiconductor reported another record quarter, posting a 35% jump in profit that woke up investor confidence in artificial intelligence. The move by TSM spread to other key chip companies including Nvidia (+1.00%), Advanced Micro Devices (+1.00%), and Micron Technology (+3.00%). The chip rally is also being fueled by a proclamation from President Trump that imposes a 25% tariff on certain semiconductors.

Bank Stocks Rally as Earnings Season Continues to Impress

Bank stocks also returned to the forefront as earnings season continued, with Morgan Stanley jumping more than 3% on better earnings and Goldman Sachs gaining 2% after beating fourth quarter estimates.

Crude Oil Selloff Drags Energy Sector Lower

Driving the energy sector lower is a steep drop in crude oil prices. They fell as tensions eased in Iran, according to remarks from President Trump. Exxon Mobil fell 0.66% after soaring nearly 3.00% the previous session.

Key Technical Levels Signal Breakout Potential for Major Indexes

Technically, March E-mini Nasdaq-100 Index futures have recovered a pair of trendlines at 25,655.00 and 25,708.50, triggering a breakout to the upside and putting the index in a position to challenge a pair of short-term tops at 26,045.50 and 26,123.50. These two levels are the last resistance before the contract high at 26,670.00.

On the downside, support is the trendlines, followed by the 50-day moving average at 25,596.03, which stopped the selling at 25,562.50 earlier in the session.

The E-mini S&P 500 Index futures contract is also rebounding after plugging a bottom at 6,923.25 on Wednesday and recovering uptrend line support at 6,960.00, which is support today. The momentum created by the move suggests investors have the buying power to challenge the contract high at 7,026.25.

Short-Term Outlook: Record Highs in Sight if Chip Leadership Holds

Looking ahead, look for the Nasdaq-100 and S&P 500 Indexes to drive the bullish tone today as long as their respective trendline support and 50-day moving averages hold. Now that it looks as if upside momentum has returned, traders are once again eyeing record highs as long as chips or AI momentum provide the leadership.

More Information in our Economic Calendar.