Weekday edition
Chipmaker TSMC dip, Prologis rent miss, and the Fed rate decision
Most stocks gained on Thursday even as a major chipmaker lost market value.
At Thursday’s close: S&P 500 +0.33%, Nasdaq-100 −0.05%, Dow +1.08%
Taiwan Semiconductor slides despite strong quarterly results on AI chip demand
Taiwan Semiconductor Manufacturing (TSM) reported stronger-than-expected third-quarter results on Thursday, helped by demand for AI, smartphone and high-performance computing chips. The company said it would speed up capacity expansion. Its shares slid 1.8% to $422.25 after the report. The decline trimmed $40 billion from the company's stock market value.
On the earnings call, Chief Executive C.C. Wei said there is "no ceiling" to the company's profitability, though he said significant gains will take time. He also flagged higher capital spending, the money a company puts into new factories and equipment. Other chipmakers also fell. Intel (INTC) slid 2.8%, and GlobalFoundries (GFS) fell 0.4%.
For readers
What it means for you: Broad index funds hold many companies weighted by size, so a single chipmaker's report reaches them only in proportion to its weight. The S&P 500 rose 0.3% on Thursday as most stocks gained. For these funds, the Fed's rate decision on Wednesday, Oct. 28, may matter more than any chip earnings.
Read the full story, TSM price history and analyst ratings, INTC price history and analyst ratings
Markets
Thursday’s close
| Market | Level | Change |
|---|---|---|
| S&P 500 | 7,744.06 | +0.33% |
| Nasdaq-100 | 29,935.60 | −0.05% |
| Dow | 52,177.69 | +1.08% |
| 10-Yr | 5.10% | −9 bp |
| Bitcoin (24 hr)As of this edition | $82,186 | +0.93% |
The day ahead
Friday’s setup
A September read on import prices is the main data point today. The 10-year Treasury yield fell 9 basis points on Thursday and eased some pressure on borrowing costs.
8:30 a.m. Import and Export Prices, September. It tracks what U.S. buyers pay for foreign goods; a hotter reading could add to inflation worries and lift borrowing costs, while a cooler one might ease them.
After hours CoreWeave. Shares slid 2.3% in late trading; reports said yields on its bonds had climbed on AI borrowing fears, though Bank of America kept its Buy rating.
After hours Netflix. Shares slid 1.1% in late trading; the company also named former Disney executive Peter Rice to replace content chief Bela Bajaria, a day after announcing layoffs.
If you own
Applied Materials shares tumbled 3.7%, and the company lost $13 billion of market value, leaving it worth $340 billion. Most index funds hold the stock, so index-fund holders could have felt part of the move.
Bond funds could reflect a lower 10-year Treasury yield, which fell 9 basis points to 5.10%. Bond prices move opposite to yields, so falling yields may lift the value of bonds these funds already hold.
Gold funds gained, with the GLD gold fund rising 1.8%. A daily move that size could show up quickly in the value of a gold holding, and gold prices may swing in either direction.
Sector funds split widely. Health care companies rose 1.9% to lead all sectors, and energy companies slid 1.6% to trail them. Returns on sector funds may differ sharply from each other and from broad index funds.
Need to know
Top stories
- 1
Tech · −6.80% Dell tumbles as hot producer prices lift Fed hike bets. Dell shares tumbled 6.8%, and the iShares Semiconductor ETF fell 0.9%. September producer prices, a gauge of wholesale inflation, rose faster than economists expected. That lifted bets on a Federal Reserve rate hike at its next meeting, according to reports. The Dow rose 1.1% as money moved toward defensive and older-economy stocks. Gold miners rebounded. Read more
- 2
Finance · −2.73% Charles Schwab slides as revenue lands just short of forecasts. Charles Schwab shares slid 2.7%, and the broker lost $4.6 billion in market value. Third-quarter profit beat analyst estimates. The company also reported record revenue and record new client assets. Revenue still came in just under forecasts. Trading revenue grew on stronger client activity, the company said. Read more
- 3
REITs · −2.70% Prologis slides after rental revenue misses estimates. Prologis shares slid 2.7% after the warehouse landlord's third-quarter rental revenue fell short of estimates. The company, a real estate investment trust that owns income-producing property, also narrowed its full-year outlook. Core funds from operations, a key profit measure for such trusts, rose from a year earlier. The company described warehouse demand as healthy, helped by data centers and online shopping. Read more
AI corner
Three changes that matter
Topics: Chips, Markets
Nvidia chief says new chip orders keep arriving despite tech selloff
Jensen Huang said demand still outpaces supply, a sign that big buyers may keep spending on AI chips, despite growing worries about debt-funded data centers.
Topics: Energy, Deals
Venture Global signs GE Vernova and Baker Hughes deals to power AI data centers
The agreements cover new power generation units for its private, grid-independent network, which could feed AI computing sites it owns or controls, the company said.
Topics: Big Tech, Regulation
Apple reportedly plans a limited Apple Intelligence launch in China
The December rollout would bring photo-editing tools to Chinese iPhone users but leave out AI-powered Siri, according to reports, which could limit any boost to iPhone demand there.
How it works
Earnings season
Consensus is the bar to clear. Analysts who follow a company publish forecasts, and their average is called the consensus. Investors treat it as a bar to clear, not a prediction. A result above it counts as a beat, one below it a miss. The size of the gap often shapes the reaction. Charles Schwab topped profit forecasts and reported record new client assets, yet its shares slid 2.7% because revenue landed just under the consensus. The same test tends to return each time a large company reports quarterly results.
The close
The big picture. The week tells a split story. The S&P 500 has fallen 0.9% since Monday. The tech-heavy Nasdaq-100 has tumbled 3.1%, even though Taiwan Semiconductor reported strong AI chip demand. Thursday was broader, with 75% of stocks rising. Hot producer prices have revived bets on a Fed rate hike, keeping interest rates at the center of the story.
On the calendar. The Fed announces its interest-rate decision on Wednesday, Oct. 28, a moment that could shape what savers earn and borrowers pay. The advance estimate of GDP follows on Thursday, Oct. 29, alongside the PCE price index the Fed watches.
Not investment advice.