US stock futures rise as chip rout eases; more earnings awaited

U.S. stock index futures rose in evening deals on Wednesday, steadying after a rout in chipmaking stocks, on concerns over more trade disruptions, sparked steep losses on Wall Street.

Growing bets on early interest rate cuts by the Federal Reserve also spurred a broader pivot away from technology stocks and into more growth-sensitive sectors. This saw the Dow Jones Industrial Average surge to record highs even as its Wall Street peers lagged.

S&P 500 Futures rose 0.2% to 5,652.75 points, while Nasdaq 100 Futures rose 0.3% to 20,067.0 points by 20:43 ET (00:43 GMT). Dow Jones Futures rose 0.2% to 41,589.0 points.

Chip stocks rise after China fears, Trump comments spur steep losses
Heavyweight technology and chipmaking stocks rose in aftermarket trade after clocking outsized losses during the session.

Heavyweights such as NVIDIA Corporation (NASDAQ:NVDA) rose 1% after a 6.6% slide, while TSMC (NYSE:TSM) rose 2.4% after a nearly 8% tumble. Majors such as Apple Inc (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) also steadied after falling during the session.

Reports that the Biden administration was considering more export curbs on China, particularly in chipmaking technology, battered the sector, given that it could herald lower sales in China, which is a major consumer of chips.

Concerns over heightened geopolitical tensions between China and Taiwan dented chip stocks, after Republican Presidential candidate Donald Trump said Taiwan should pay the U.S. for defense supplies.

Tech stocks were also pressured by a broader shift into more economically sensitive sectors, amid growing bets that the Fed will begin cutting rates from September.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.
This saw the Dow Jones Industrial Average rise 0.6% to a record high of 41,198.08 points. The S&P 500 fell 1.4% to 5,588.27 points, while the NASDAQ Composite finished down 2.8% at 17,997.81 points.

Netflix, TSMC earnings awaited
Focus remained on the second quarter earnings season, with technology majors Netflix Inc (NASDAQ:NFLX) and TSMC set to report earnings on Thursday.

TSMC is considered a bellwether for the chipmaking industry, and is expected to log a bumper second quarter profit on increased demand from the artificial intelligence industry.

Lithographic equipment maker ASML Holding NV (AS:ASML) ADR (NASDAQ:ASML), which is also considered a bellwether for the chip industry, clocked stronger than expected second quarter earnings, as it flagged increased demand from the AI industry.

Earnings from Blackstone Inc (NYSE:BX), Alaska Air Group Inc (NYSE:ALK) and Intuitive Surgical Inc (NASDAQ:ISRG) are also due on Thursday.

MSFT: A Bull or Bear Market Play?
Don’t miss out on the next big opportunity! Stay ahead of the curve with ProPicks – 6 model portfolios powered by AI stock picks with a stellar performance in 2024.