Nerves about the chip giants were jangled further by reports of new U.S. curbs on the sector and White House hopeful Donald Trump’s doubt about U.S. military defence of Taiwan.
Wall Street’s semiconductor index lost more than $500 billion in value on Wednesday in its worst session since 2020 after a report said the United States was mulling tighter restrictions on exports of advanced chip technology to China.
Artificial Intelligence heavyweight Nvidia fell almost 7% during the session.
Although Dutch chipmaking equipment provider ASML, which slumped 13% yesterday, continued to struggle in Europe, TSMC’s update may help steady the ship.
U.S. listed shares of TSMC rebounded 3% on Thursday after the firm – a major Apple and Nvidia supplier – beat profit forecasts and said its revenue in the current quarter will increase by as much as 34%.
That, in turn, has seen a rebound in related U.S. stocks, with Nasdaq futures up 0.5% ahead of today’s bell and S&500 futures up too. The VIX volatility gauge has ebbed from its highest level since May.
Streaming bellwether Netflix tops another packed earnings diary later.
Stocks around the world were similarly in foment, with tech-heavy Japanese and South Korean benchmarks falling overnight – with the Nikkei the standout loser with a drop of 2.2%, exaggerated by the week’s yen surge.
On the back of a weaker dollar more generally, which sent the DXY index to four-month lows before stabilising today, dollar/yen skidded to its lowest in over a month amid jitters around another suspected round of yen-buying Bank of Japan intervention on Wednesday.
BOJ data suggests it may have bought nearly 6 trillion yen ($38.37 billion) last week and traders said this week’s moves bore the hallmarks of further intervention – or at least of markets easily spooked by that prospect.
