Nasdaq Index, Dow Jones, S&P 500 News: TSMC Surges On Strong Q2 Results, Boosting Tech Sector

James Hyerczyk
Updated: Jul 10, 2024, 14:54 GMT+00:00

Key Points:

  • Investors focus on Powell's congressional testimony and upcoming economic data releases for insights into the Fed's future monetary policy decisions.
  • TSMC's revenue of T$673.51 billion exceeds analyst expectations, highlighting strong demand in the semiconductor and AI sectors.
  • Market sentiment remains cautiously optimistic, with upcoming inflation data potentially cementing expectations for a September rate cut.

In this article:

S&P 500 Holds Steady After Tuesday’s Record Close

The S&P 500 maintained its position on Wednesday following Tuesday’s record-setting close, with stock futures showing little change in afternoon trading. Investors’ attention remains fixed on Federal Reserve Chair Jerome Powell as he continues his congressional testimony for a second day, this time before the House Financial Services Committee. Market participants are also preparing for significant economic data releases in the coming days, which could provide crucial insights into the economy’s direction.

At 12:44 GMT, Dow Futures are trading 39627.00, up 31.00 or +0.08%. S&P 500 Index Futures are at 5646.50, up 15.25 or +0.27% and Nasdaq 100 Index Futures are trading 20765.75, up 87.25 or +0.42%.

Fed Chief Walks the Monetary Tightrope

Powell’s address to the Senate Banking Committee underscored the delicate balance the Fed must strike in its monetary policy decisions. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment,” he cautioned. The Fed chair also emphasized that additional positive economic data would reinforce confidence in inflation’s trajectory toward the 2% target.

Economic Data Showdown: CPI and PPI in Focus

Market participants are on high alert for the June Consumer Price Index (CPI) report due Thursday, followed by the Producer Price Index (PPI) on Friday. These reports are poised to provide critical insights into inflation trends and could significantly influence the Fed’s September rate decision.

Daily Taiwan Semiconductor Manufacturing Company

Taiwan Semiconductor Outperforms Expectations

Taiwan Semiconductor Manufacturing Company (TSMC) reported impressive second-quarter results, with revenue reaching T$673.51 billion, surpassing analyst expectations of T$654.27 billion. The company, a key supplier to AI giants like Nvidia and Apple, saw its shares rise 2% on the news. TSMC’s strong performance underscores the robust demand in the semiconductor sector, particularly in advanced technologies driving AI applications.

Tesla Gets Boost from Goldman Sachs

In other corporate news, Tesla charged ahead with a nearly 1% gain after Goldman Sachs boosted its price target. 3M Company slipped 1.2% following news of its finance chief’s departure. Carvana accelerated 4.5% on a Needham upgrade, while plummeted over 25% after slashing its full-year revenue outlook and announcing its CEO’s exit.

Market Outlook: Cautious Optimism with a Bullish Edge

The market sentiment leans cautiously optimistic with a slight bullish tilt. The upcoming CPI and PPI data will likely be game-changers in shaping the short-term market direction. Cooler inflation figures could cement expectations for a September rate cut, potentially fueling further market gains. However, traders should remain alert, as excessively cool data might spark concerns about economic growth.

As Powell’s testimony continues and key economic reports loom, traders are advised to stay vigilant and ready to adjust their strategies in response to these market-moving events.

Technical Analysis

Daily E-mini Nasdaq-100 Index

E-mini Nasdaq-100 Index futures are trading higher on Wednesday, shortly before the cash market opening. The tech driven index is within striking distance of its all-time high at 20771.75. Taking out this level will reaffirm the uptrend.

The index is well above support with a strong uptrend supported by the 50-day moving average at 19308.81. The 200-day moving average is also trending higher.

The market is running hot, however, well above the moving averages, which has many calling for a near-term correction. A trade through 20615.65 will make 20771.75 a new minor top.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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