Futures up ahead of economic data, TSMC results lift chip stocks

By Lisa Pauline Mattackal and Purvi Agarwal

(Reuters) -U.S. stock index futures advanced on Thursday, with an upbeat forecast from TSMC boosting semiconductor stocks, while investors awaited key economic data for clues on the U.S. consumer's financial health.

Profit at Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, beat market estimates and the company forecast a jump in fourth-quarter revenue, driven by demand for artificial intelligence chips.

The chipmaker's U.S.-listed shares soared 8% in premarket trading, while AI-trade favorite Nvidia gained 2.6%.

Other chip stocks such as Broadcom rose 2.7%, Intel gained 1.3% and Arm Holdings was 3.6% higher.

Stocks had advanced in Wednesday's session, with the Dow Jones Industrial Average notching up its third record close in four sessions, as declines in megacap tech stocks were offset by a rally in small-cap and financial shares.

Futures tracking the small-cap Russell 2000 were slightly lower, down 0.1%, after the index closed at its highest level in nearly three years.

Megacap stocks rose after broad declines in the previous session, with Apple rising 0.8% and Microsoft <MSFT.O> up 0.6%.

Focus now turns to the U.S. economic outlook, with September retail sales and industrial production, as well as weekly jobless claims data due on the day.

"Growth indicators in the US are now being closely monitored by the market and in terms of retail sales, a slight recovery is expected in September after sales slowed in August," analysts at SEB Research said in a note.

Dow E-minis were up 29 points, or 0.07%, S&P 500 E-minis were up 24.25 points, or 0.41% and Nasdaq 100 E-minis were up 169.5 points, or 0.83%.

Another busy day of corporate earnings lies ahead, with streaming giant Netflix scheduled to report third-quarter earnings after the bell. Its shares rose 0.4% in premarket trading.

Elevance Health plummeted 12.6% after the health insurer slashed its full-year profit forecast, expecting to pay out more in claims due to robust demand for medical care.

Peers UnitedHealth slipped 1.3%, Humana fell 3%, while Centene was off 6%.

A broadly upbeat start to the third-quarter earnings season, on the heels of strong economic data and the U.S. Federal Reserve kicking off its policy-easing cycle, injected fresh optimism into equity markets.

This propelled the benchmark index to fresh record highs and closer to the psychologically important 6,000 mark.

Still, analysts have flagged increasingly stretched valuations, high earnings expectations and likely volatility ahead of November's U.S. presidential election as risk factors through the end of the year.

Federal Reserve Bank of Chicago President Austan Goolsbee is also scheduled to speak later in the day.

The Fed is still widely expected to trim rates by 25 basis points at its next meeting in November, according to CME's FedWatch.

EV-maker Lucid tumbled 15.6% after it said it expects to report a bigger-than-expected loss for the third quarter and announced a public offering of more than 262 million shares.

(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)