U.S. Stocks May See Further Upside On Optimism About AI Trade

(RTTNews) - After ending yesterday's volatile session mostly higher, stocks may see further upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.4 percent.

The markets may benefit from continued optimism the artificial intelligence trade, as Taiwan Semiconductor (TSM) is jumping by 2.3 percent in pre-market trading after reporting a bigger than expected surge in third quarter profits amid strong AI chip demand.

Taiwan Semiconductor, which produces chips for Nvidia (NVDA), also raised its forecast for full-year revenue growth and reiterated plans to commit up to $42 billion to capital expenditures by the end of the year.

Major AI players Nvidia and Broadcom (AVGO) are also seeing significant pre-market strength following the news from Taiwan Semiconductor.

Dow component Salesforce (CRM) is also surging by 6.5 percent in pre-market trading after the cloud-based software company forecast stronger than expected revenue of over $60 billion in 2030.

On the U.S. economic front, the Federal Reserve Bank of Philadelphia released a report this morning showing a substantial pullback by its reading on regional manufacturing activity in the month of October.

The Philly Fed said its diffusion index for current general activity plunged to a negative 12.8 in October after spiking to a positive 23.2 in September, with a negative reading indicating contraction. Economists had expected the index to slump to a positive 10.0.

With the much bigger than expected decrease, the Philly Fed index tumbled to its lowest level since hitting a negative 26.4 in April.

Not long after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of October. The housing market index is expected to inch up to 33 in October after holding at 32 in September.

Stocks showed wild swings over the course of the trading day on Wednesday, extending the substantial volatility seen during Tuesday's session. The major averages spent the day bouncing back and forth across the unchanged line.

While the Nasdaq and the S&P 500 ended the day firmly in positive territory, the narrower Dow posted a slim loss. The Dow edged down 17.15 points or less than a tenth of a percent to 46,253.31, but the S&P 500 rose 26.75 points or 0.4 percent to 6,671.06 and the Nasdaq climbed 148.38 points or 0.7 percent to 22,679.08.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index jumped by 1.3 percent, while Australia's S&P/ASX 200 Index advanced by 0.9 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is up by 0.9 percent, the German DAX Index is just below the unchanged line and the U.K.'s FTSE 100 Index is down by 0.2 percent.

In commodities trading, crude oil futures are climbing $0.40 to $58.67 a barrel after falling $0.43 to $58.27 a barrel on Wednesday. Meanwhile, after jumping $38.20 to $4,201.60 an ounce in the previous session, gold futures are surging $61.60 to $4,263.20 an ounce.

On the currency front, the U.S. dollar is trading at 151.20 yen versus the 151.04 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1651 compared to yesterday's $1.1646.