Key facts
- U.S. stock index futures were subdued on Thursday after a two-day rally.
- Chip stocks extended declines, with TSMC falling 3.2% despite strong profit.
- Wall Street indexes rose for a second straight session on Wednesday due to cooler inflation and strong earnings.
- PayPal shares surged 17.2% on news of a potential acquisition offer.
- Investors are awaiting U.S. retail sales data and jobless claims for economic indicators.
U.S. stock index futures were subdued on Thursday as investors paused after a two-day rally that saw Wall Street indexes climb on cooler inflation data and strong earnings. Chip stocks extended declines from the previous session, with U.S.-listed shares of TSMC falling 3.2% in premarket trading despite the advanced AI chipmaker reporting a 77% jump in second-quarter profit that topped market expectations. TSMC also announced it would invest an additional $100 billion in the United States.
Memory-chip makers Western Digital and Seagate Technology were among the biggest decliners. The rally on Wednesday was supported by a softer-than-expected Producer Price Index reading, which eased inflation concerns and reduced worries over tighter Federal Reserve policy, following benign consumer inflation data earlier in the week. A strong start to the second-quarter earnings season also supported sentiment.
Investors will be looking to retail sales data and jobless claims for further signs of whether the economy is slowing enough to keep inflation under control without sparking growth concerns. Markets are currently pricing in a 10.2% likelihood that the Fed will implement a 25-basis-point rate hike at this month's monetary policy meeting. The benchmark S&P 500 has climbed more than 10% this year and remains near its June record close.
United Airlines fell 2.3% as a renewed surge in oil prices weighed on its third-quarter and full-year profit outlooks. UnitedHealth is scheduled to report earnings before the bell, and Netflix is set to report after the market's close.