Nasdaq kicks into life after TSMC earnings; Wall St banks rally

Wall Street surged back to life, with heavyweight chipmaker Nvidia and semiconductor firms Applied Materials and Advanced Micro Devices among those spurred on after Taiwan Semiconductor Manufacturing Co projected stronger capital spending in the coming year than anticipated.

Meanwhile, the major US banks bounced back from a soggy start to the week after earnings from Goldman Sachs and Morgan Stanley came in ahead of expectations and asset manager BlackRock’s empire under management hit US$14 trillion.

Wall Street fear gauge eased and oil prices tumbled as US President Donald Trump dialled down his rhetoric on intervening in the Middle Eastern nation’s deadly protests, saying authorities in Tehran have stopped killing protesters.

And locally, Statistics New Zealand’s partial inflation reading is due today, while the Bank of New Zealand-BusinessNZ performance of manufacturing index will offer the latest update on the health of the domestic economy.

Back to normal

Recent nervousness about the artificial intelligence boom was put to one side as chipmakers and semiconductor firms rallied after Asia’s most valuable company, TSMC, reported strong earnings yesterday and projected US$56 billion of capital spending in 2026 – more than analysts anticipated.

The tech-heavy Nasdaq Composite snapped a two-day decline, advancing 0.7% in late trading, as the likes of Nvidia, Applied Materials, Broadcom and AMD rallied on the Taiwanese firm’s outlook.

Locally, Infratil, Vista Group International, Serko and Gentrack have been caught up in the global souring on tech stocks.

Meanwhile, Goldman Sachs led the Dow Jones Industrial Average higher, with the bank climbing 4.5% after beating December quarter earnings expectations as it posted record revenue from its equities trading. Morgan Stanley added to the fortunes for financial stocks as it came in ahead of forecasts, while asset manager BlackRock’s funds under management swelled to US$14 trillion.

Financial stocks around the world had been caught up in the downbeat tone earlier this week, with the big four Australian banks and NZX-listed Heartland Group Holdings following the US lead.

The Dow was up 0.7% in late trading, while the S&P 500 advanced 0.6%.

Equities were more mixed across the Atlantic, with the UK’s FTSE 100 gaining 0.5% and Germany’s DAX 30 up 0.3%, while France’s CAC 40 dipped 0.2%.

Not so nervous

The volatility index, known as Wall Street’s fear gauge, dropped 8.4% to 15.34 and Brent crude oil futures fell 4.4% to US$63.55 a barrel at 7am in Auckland as tensions between the US and Iran eased as President Donald Trump dialled down his signals for an intervention in the deadly protests, saying Tehran had stopped killing protesters.

The oil majors were broadly weaker, with Chevron, Exxon Mobil and BP on the red side of the ledger, while London-listed Shell advanced.

The kiwi dollar traded at 57.44 US cents at 7am in Auckland from 57.35 cents yesterday after US new jobless claims unexpected fell to their lowest level since November last week.

“There was a surprise drop in US initial jobless claims suggesting the labour market may be stronger than expected,” BNZ senior interest rate strategist Stuart Ritson said in a note. “Treasury yields increased after resilient labour market data and the US dollar gained against European currencies.”

Australian futures are pointing to a marginal decline for the S&P/ASX 200 index when trading opens across the Tasman, with the Aussie benchmark up 1.7% so far this week as mining stocks have been buoyed by the surge in precious metal prices. New Zealand’s S&P/NZX 50 index is heading for a 0.3% weekly decline.

Local data today include Stats NZ’s selected prices index for December, which will firm up consumer price inflation forecasts, while the BNZ-BusinessNZ PMI will give the latest reading on industrial activity.

Reporting by Paul McBeth. Image from Alexandre Debiève on Unsplash.