By Lisa Pauline Mattackal and Ankika Biswas
(Reuters) -Nasdaq futures rose on Thursday, thanks to an upbeat forecast from Taiwan Semiconductor Manufacturing that lifted chip stocks and a rebound in megacaps following a sharp sell-off in the previous session.
U.S.-listed shares of TSMC rose 1.5% in premarket trading after the world's largest contract chipmaker raised its full-year revenue forecast on surging demand for AI chips.
Apple and Nvidia, both TSMC customers, climbed 0.6% and 2.5%, respectively. Other chipmakers including Advanced Micro Devices, Intel, Marvell Technology <MRVL.O> and Arm Holdings rose over 1% each.
Barring Intel, chip stocks lost over $500 billion in market value in Wednesday's session following a report that the U.S. was mulling tighter curbs on exports of advanced semiconductor technology to China. Comments on Taiwan from Republican presidential candidate Donald Trump also drove losses.
The Philadelphia SE Semiconductor index logged its worst day in four years on Wednesday. The rout in chip stocks also pressured megacap shares.
The group of so-called "Magnificent 7" stocks rose, with Meta Platforms, Tesla and Amazon.com <AMZN.O gaining between 0.4% and 1.3%.
The quarterly earnings season that is underway will be a significant test for whether expensively valued megacaps can keep investors satisfied with strong results.
"While the strong year-to-date performance of the tech sector creates the risk of near-term volatility, we continue to think it is important that investors hold sufficient long-term exposure to the AI trend," said Mark Haefele, chief investment officer, UBS Global Wealth Management.
"Beating on profit may no longer be enough to propel strong rallies, given the high bar set for the tech sector, which already has rich valuations."
Futures tracking the small-cap Russell 2000 index edged 0.1% lower. The index closed down 1% in the previous session, snapping a five-day winning streak.
Dow futures also edged lower after the index notched its third consecutive closing high on Wednesday.
The VIX index, Wall Street's "fear gauge", eased slightly but was still at a six-week high.
On the earnings front, Domino's Pizza slumped 13.1% after falling short of estimates for quarterly same-store sales, while D.R. Horton dropped 1.7% after the homebuilder tightened its annual forecast for home sales.
Netflix is scheduled to report results after the closing bell. The streaming giant's shares were slightly lower.
Weekly jobless claims data as well as the Philadelphia Federal Reserve's business index are on also on the radar. Comments from Federal Reserve officials Lorie Logan, Mary Daly and Michelle Bowman are also expected later in the day.
Investors are still pricing in a 92% chance of a 25-basis-point interest-rate cut from the Fed by its September meeting, according to CME's FedWatch.
At 6:56 a.m. ET, Dow e-minis were down 61 points, or 0.15%, S&P 500 e-minis were up 7.5 points, or 0.13%, and Nasdaq 100 e-minis were up 78.5 points, or 0.39%.
Warner Bros Discovery jumped 3% after a report the owner of CNN and HBO had discussed a plan to split its digital streaming and studio businesses from its legacy TV networks.
Beyond Meat slumped 12.1% following a report the plant-based meatmaker had engaged with bondholders to begin discussions about restructuring its balance sheet.
(Reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta and Pooja Desai)
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