BLOCKBUSTER results from chipmaker TSMC bounced Wall Street higher after two days of losses yesterday, while oil and gold fell off recent highs as demand for safe-haven assets subsided on signals US President Donald Trump might be less inclined to take immediate military action against 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 to a record high.
The rising tide lifted Dutch chip equipment maker ASML , a major TSMC customer, which in turn pushed European shares back towards record levels.
Trump’s decision to allow Nvidia to sell some AI chips to China “is another plus for the market”, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The Dow Jones Industrial Average rose 0.54pc to 49,413.99, the S&P 500 rose 0.49pc to 6,960.62 and the Nasdaq Composite rose 0.59pc to 23,610.95.
Financial firms joined the earnings party. Investors rewarded BlackRock for a beat to analyst forecasts with a 4pc rise in the global asset management leader’s share price.
Goldman Sachs gained more than 3pc after reporting rising revenues, although the stock suffered early on due to investment banking fees falling slightly short of forecasts. Fellow investment bank Morgan Stanley’s stock rose after beating profit estimates.
“We are at the very beginning of the earnings season and so far so good,” Cardillo said.
Oil prices fell further after gaining earlier this week when Trump threatened intervention in Iran, a member of the Organization of the Petroleum Exporting Countries, in response to a deadly government crackdown on protests there.
Trump said on Wednesday he had been told killings were easing and there were no plans for large-scale executions.
“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.
US crude fell 4.34pc to $59.33 a barrel and Brent fell 4.09pc to $63.80 per barrel.
Gold, which thrives as a safe haven in geopolitical and economic uncertainty, as well as in low-interest-rate environments, declined.
Its price fell 0.12pc to $4,614.22 an ounce, a day after hitting a record $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 consternation.
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.
Further macroeconomic news showed US unemployment benefits unexpectedly fell last week, pushing up the dollar and making dollar-denominated commodities including gold more expensive for overseas buyers.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.28pc to 99.35, with the euro down 0.29pc at $1.1608.
Reports on manufacturing in New York State and the Mid-Atlantic region were also stronger than expected.
The robust data slightly dented expectations the Federal Reserve will cut interest rates in the short term, pushing US Treasury yields mostly higher.
The benchmark 10-year notes were last yielding 4.16pc, from 4.14pc late on Wednesday.
Chicago Federal Reserve President Austan Goolsbee said the US central bank should be focused on getting inflation down as there is ample evidence of job market stability.
Meanwhile, Bahrain All Share Index closed at 2,045.00 points yesterday, marking a decrease of 0.38 points below the previous closing.
This decrease was due to the drop in the Communications Services Sector and the Industrial Sector.
Bahrain Islamic Index has closed at 996.56 points, marking a decrease of 1.69 points below the previous closing.
Results indicated that 59 equity transactions took place with a volume of 1,940,937 worth BD 546,249.
Investors traded mainly in the Financial Sector, representing 61.24pc of the total value of securities traded.
Gulf stock markets closed mixed yesterday, as investor sentiment was weighed down by uncertainty surrounding the evolving regional geopolitical situation and profit-taking.
Saudi Arabia’s benchmark index dropped 1.2pc, snapping a six-day winning streak, with Al Rajhi Bank losing 1.6pc. However, broadened foreign participation rules triggered the recent rebound, additional market reforms could translate into increased foreign inflows, while new state-owned firms’ IPOs could draw new investments, said George Pavel, general manager at Naga.com Middle East.
Among other losers, oil behemoth Saudi Aramco eased 0.7pc.
The Qatari index declined 1.3pc, hit by a 2pc fall in Qatar Islamic Bank.
Dubai’s main share index finished flat, while the Abu Dhabi index was up 0.2pc.
Outside the Gulf, Egypt’s blue-chip index gained 0.7pc, with Commercial International Bank advancing 3.4pc.
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