Article by: Tide Research
U.S. stocks opened lower on Thursday but rebounded, with the Dow Jones rising over 550 points, while the Nasdaq barely closed in positive territory and the Philadelphia Semiconductor Index fell for the seventh consecutive day. TSMC’s net profit increased nearly 70% year-over-year, and its Q4 revenue guidance also exceeded expectations, yet its stock price closed lower. Healthcare, materials, and financial stocks performed strongly. Meanwhile, U.S. September PPI came in significantly above expectations, yet Treasury yields declined noticeably; inflation and AI companies’ debt remain the two top concerns for investors.
The Dow Jones rose 1.08%, while the Nasdaq fell for the seventh consecutive day.
The Dow Jones Industrial Average rose 1.08% to close at 52,177.69, gaining 556.21 points on the day; the S&P 500 increased 0.33% to close at 7,744.06; the Nasdaq Composite edged up 0.08% to close at 26,713.03. The Russell 2000 rose 1.38%, and the VIX declined 2.43% to 16.46.
The Philadelphia Semiconductor Index fell more than 4% intraday but closed down 0.88%, marking its seventh consecutive trading day of declines. The Nasdaq Golden China Index rose 1.96% to 5,770.91.
Eight of the S&P 500’s eleven sectors rose, while three fell. Healthcare gained 1.84%, materials rose 1.71%, and financials increased 1.38%. Consumer discretionary, real estate, communication services, industrials, and consumer staples also closed higher. Energy declined 1.55%, information technology fell 0.54%, and utilities dropped 0.21%.
The Magnificent Seven showed mixed movements. Microsoft rose 1.08%, Alphabet A increased 0.45%, and Amazon gained 0.27%; NVIDIA fell 1.84%, Tesla dropped 1.29%, Apple declined 0.28%, and Meta slipped 0.11%. Server stocks continued to decline, with Dell down approximately 6.9% and Hewlett Packard down about 7.1%; Micron rebounded 1.87%.
The 10-year U.S. Treasury yield declined to approximately 5.09%, while the 2-year yield fell to around 4.75%. WTI crude oil futures rose 3.03% to $97.97 per barrel, while Brent crude oil futures dipped 0.13% to $105.92 per barrel. COMEX gold futures advanced 2.06% to $4,192.50 per ounce. As of approximately 8:45 AM Beijing time, Bitcoin was trading at around $82,300 and Ethereum at approximately $2,440.
TSMC raises its full-year growth forecast, but U.S. stocks still fall 1.80%
TSMC reported third-quarter revenue of NT$1.494 trillion, a 50.9% year-over-year increase; net profit of NT$763.06 billion, up 68.7% year-over-year. The gross margin was 66.4%, down from 67.7% in the second quarter.
Advanced nodes continue to contribute the majority of revenue. 2-nanometer accounts for 8% of wafer sales, 3-nanometer for 33%, and 5-nanometer for 28%; 7-nanometer and more advanced nodes combined account for 79%.
The company expects fourth-quarter revenue to range from $52.3 billion to $54.3 billion, with a gross margin of 65% to 67%, and has raised its full-year U.S. dollar revenue growth outlook to approximately 44%. Management noted strong demand for advanced processes, with 2-nanometer business growing rapidly; capital expenditures for the year remain forecasted at $60 billion to $64 billion.
TSMC closed down 1.80% at $422.25 in U.S. trading. This earnings report indicates that recent chip orders have not shown significant cooling. However, concerns in the semiconductor sector now extend beyond demand to include where customers will source funding for data center expansions and whether these investments will generate corresponding returns. Strong earnings have temporarily failed to reverse the sector’s downward trend.
After Jensen Huang's statement, CoreWeave reversed from a near 10% decline to a near 6% gain.
CoreWeave fell as much as 9.5% in early trading on Thursday, then reversed course to close up 5.94%.
On that day, Huang Renxun stated that CoreWeave's strength is growing and its cost of financing has actually decreased; he did not believe the company needed NVIDIA to step in and rescue it. Following his remarks, CoreWeave's decline quickly narrowed, and it turned positive by midday.
Even as its stock rebounds, its bonds continue to face pressure. Yields on some of CoreWeave’s bonds exceed 15%, and credit default swap costs remain high. The company’s capital expenditures for the second quarter totaled approximately $9.4 billion, while its operating cash flow during the same period was around $680 million—far below the funding required for its expansion.
Therefore, while Huang Renxun’s remarks eased shareholder concerns, bond investors’ worries about the company’s ability to repay debt remain unresolved. Whether the company can deliver projects on time, receive customer payments, and continue securing financing is more important than a single-day stock price rebound.
PPI significantly exceeded expectations, with retail data driven by higher gasoline prices.
In the U.S., the PPI rose 1.3% month-over-month in September, the largest increase since March 2022, and increased 6.3% year-over-year, the highest since December 2022. Energy prices rose 10.8% month-over-month, and service prices increased 0.8%.
On the same day, retail sales rose 0.8% month-over-month, exceeding the expected increase of approximately 0.3%. Gas station sales surged 6.4%; however, after excluding automobiles and gasoline, retail sales increased by only 0.2%, while the control group used to estimate GDP consumption of goods rose 0.1%. Rising oil prices boosted consumer spending at gas stations, while sales growth for other goods remained relatively limited.
For two consecutive days, price data came in stronger, yet U.S. Treasury yields declined and the dollar weakened. Tech stocks experienced increased volatility, while bonds saw buying interest; within equities, healthcare, materials, and financial sectors led gains, with the Dow’s rebound significantly outpacing the Nasdaq. Most sectors rose on Thursday, but chip and server stocks remained weak.
Today's Focus
At 11:30 Beijing Time, Fed Chair Powell will engage in a dialogue with IMF Managing Director Georgieva in Bangkok. As the Fed is about to enter its pre-meeting quiet period, and with CPI and PPI both coming in above expectations, whether he hints at further rate hikes is today’s key focus.
At 8:30 PM tonight, the U.S. will release the September Import and Export Price Index; at 9:15 PM, it will release the September Industrial Production. The former provides additional insight into price increases for imported goods, while the latter reflects manufacturing output performance.