NEW YORK: Winning results from chipmaker TSMC and major banks lifted Wall Street after two days of losses on Tuesday, while gold eased from recent highs as US jobless data boosted the dollar and President Donald Trump moderated his message about a deadly crackdown on protests in Iran.
Taiwan’s TSMC, the world’s biggest producer of advanced AI chips, posted a forecast-smashing 35 per cent jump in fourth-quarter profit, sending its US-listed shares up five per cent.
Financial firms joined the earnings rally. Investors rewarded BlackRock for beating analyst forecasts with a six per cent rise in the global asset management leader’s share price.
Goldman Sachs gained five per cent and fellow investment bank Morgan Stanley rose six per cent after both reported rising quarterly profits, helped by busy dealmaking.
Investors had worried tech valuations “were getting a little too far ahead of themselves,” said Alan Lancz, president of Alan B. Lancz & Associates Inc., an investment advisory firm based in Toledo, Ohio. “That’s been kind of squashed this morning with the news from Taiwan Semiconductor.”
According to preliminary data, the S&P 500 gained 0.26 per cent to end at 6,944.57 points, while the Nasdaq Composite added 0.25 per cent to close at 23,530.02. The Dow Jones Industrial Average rose 0.60 per cent to 49,446.23.
“We are at the very beginning of the earnings season and so far so good,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The tech tide also lifted Dutch chip equipment maker ASML, a major TSMC customer, which in turn pushed European shares back towards record levels.
IMMEDIATE RISK SOFTENS
Oil prices settled four per cent lower, breaking a five-day streak of gains sparked by Trump‘s threat of intervention in Iran, a member of the Organization of the Petroleum Exporting Countries.
“While the situation remains fragile, the immediate risk premium has softened but is unlikely to go away given the continued risk of a disruption,” Saxo Bank analyst Ole Hansen said.
Brent futures settled down US$2.76, or 4.15 per cent, at US$63.76 a barrel. US West Texas Intermediate crude fell US$2.83, or 4.56 per cent, to US$59.19.
Gold, which thrives as a safe haven in geopolitical and economic uncertainty as well as in low interest rate environments, declined.
Its price slipped 0.15 per cent to US$4,613.37 an ounce, a day after hitting a record US$4,642.72.
In an interview with Reuters on Wednesday, Trump addressed his administration’s pursuit of Federal Reserve chair Jerome Powell, which has been another source of investor concern.
Trump said he had no plans to fire Powell, who is facing a Justice Department criminal investigation.
“Right now, we’re in a little bit of a holding pattern with him, and we’re going to determine what to do. But I can’t get into it. It’s too soon. Too early,” Trump said.
JOBS SURPRISE BOOSTS DOLLAR
The dollar rose to a six-week high after data showed the number of Americans filing new applications for unemployment benefits unexpectedly fell last week, bolstering expectations the Federal Reserve will keep interest rates on hold for several months.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, reached 99.49, the highest since Dec 2. The euro fell as low as US$1.1592, the weakest since Dec 2.
The index was last seen 0.24 per cent higher at 99.32, with the euro down 0.24 per cent at US$1.1614.
Reports on manufacturing activity in New York State and the Mid-Atlantic region were also stronger than expected.
US Treasury yields were mostly higher following the data.
The benchmark 10-year note was last yielding 4.16 per cent, up from 4.14 per cent late on Wednesday.
Chicago Federal Reserve president Austan Goolsbee said the US central bank should focus on bringing inflation down, citing ample evidence of job market stability.
Kansas City Fed president Jeff Schmid said inflation was running “too hot”, while San Francisco Fed president Mary Daly said incoming economic data looked encouraging despite uncertainties and continued risks to both the Fed’s inflation and employment mandates.
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