U.S. stock futures held near unchanged levels on Thursday as traders shifted attention away from inflation moves and back toward earnings and incoming economic data. Softer-than-anticipated June inflation figures have reduced immediate pressure on Federal Reserve policy makers to raise rates, but market participants remain attuned to corporate profit reports and geopolitical developments.
Futures at a glance
By 04:00 ET, S&P 500 futures were down 0.2%, Nasdaq 100 futures had fallen 0.4% and Dow Jones futures were flat. The modest changes followed a rally in the previous session after June inflation readings came in softer than expected, easing concern that the Fed would need to tighten monetary policy further in the near term.
Despite the more benign inflation signal, investors are balancing optimism from strong corporate results against lingering geopolitical uncertainty in the Middle East and pronounced volatility among semiconductor names that has raised questions about lofty valuations tied to artificial intelligence.
TSMC posts record quarterly profit
Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, reported a 77% increase in second-quarter net profit to T$706.6 billion, equivalent to $22 billion, comfortably ahead of analysts’ expectations. The results underline continued robust demand for AI-related processors.
TSMC supplies advanced chips to major technology firms, including Nvidia and Apple, and its earnings are closely watched as a barometer for investment in AI infrastructure. The strong quarterly performance arrived a day after equipment maker ASML raised its own outlook, offering another signal that suppliers within the AI ecosystem are benefiting from elevated customer spending.
While semiconductor shares have experienced sharp price swings in recent months, TSMC’s results reinforce the prevailing market narrative that spending on AI infrastructure remains a significant growth driver for parts of the technology supply chain.
Apple clears regulatory hurdle in China
Shares of Alibaba and Baidu climbed following regulatory approval for Apple to introduce its Apple Intelligence features in China. Alibaba rose nearly 5% and Baidu gained about 4% after China’s cyberspace regulator approved Apple’s on-device generative AI services for iPhones.
The authorization removes a substantial barrier for Apple as it looks to expand AI capabilities in a major market, and it also creates potential opportunities for local partners expected to support Apple’s services. The decision could help Apple better compete in China’s increasingly contested smartphone market while opening avenues for domestic AI firms working alongside the U.S. tech company.
Geopolitical tensions keep markets cautious
Investor sentiment was tempered by renewed geopolitical risk after the U.S. military carried out another round of strikes against Iran. U.S. Central Command indicated the operations targeted sites linked to attacks on commercial vessels transiting the Strait of Hormuz. President Donald Trump reiterated that military operations would continue until Iran agreed to negotiate.
Although markets have grown somewhat less reactive to daily updates from the conflict, participants remain vigilant about any disruption to a vital oil shipping route. A resurgence in oil prices would be the primary channel by which the regional tensions could feed back into inflation expectations and complicate the Fed’s policy outlook.
What to watch next
Investors face a busy slate of corporate reports and economic releases that could shape market direction. Netflix, GE Aerospace, State Street and U.S. Bancorp are among the firms scheduled to report quarterly results and will offer fresh reads on consumer demand, industrial activity and the financial sector.
On the economic calendar, June retail sales data and the weekly jobless claims report are due. Retail sales will provide a direct snapshot of consumer spending, which remains the largest component of the U.S. economy, while jobless claims continue to serve as a near-term gauge of labor market resilience. Combined, these releases will help determine whether recent earnings strength is supported by underlying demand or is at risk if consumption shows signs of weakening.
In the near term, softer inflation readings have removed one immediate source of market anxiety. The focus is now on whether corporate earnings and incoming economic indicators will validate the strong rally in stocks seen so far this year, or whether weaker numbers could rekindle growth concerns.