In a significant market movement, US equity indexes experienced a rise on Thursday, attributed to stronger-than-expected retail sales that ultimately drove government bond yields higher. The quarterly results from Taiwan Semiconductor Manufacturing, known by its ticker symbol $TSM, acted as a catalyst for a notable boost in chip stocks.
The Nasdaq Composite climbed by 0.8%, reaching a level of 18,506.1. Meanwhile, the S&P 500 increased by 0.4%, closing at 5,868.2, and the Dow Jones Industrial Average rose by 0.3%, settling at 43,218.4 during Thursday's midday trading session. Technology stocks, in particular, emerged as the top gainers of the day, while sectors such as consumer staples, real estate, and healthcare saw declines in their share prices. In terms of economic performance, US retail sales for September demonstrated a positive rise of 0.4%, exceeding the anticipated growth of 0.3% according to a survey compiled by Bloomberg.
This outcome is a contrast to the previous month's modest gain of 0.1%, signaling a strengthening consumer spending environment. Additionally, the latest report from the Department of Labor highlighted a decrease in initial jobless claims, which fell by 19,000 to a total of 241,000 for the week ending October 12.
Analysts had expected a higher figure of 258,000, making this drop more favorable for overall economic health. The previous week's numbers were also adjusted upward by 2,000, bringing it to 260,000. In the bond market, yields saw a rise across the board, with the 10-year Treasury yield increasing by 7.7 basis points to reach 4.09%, while the two-year yield rose by 4.3 basis points, now sitting at 3.98%.
This upward movement in yields often reflects heightened investor confidence. As for the semiconductor sector, US-based chip stocks surged during trading, landing in the top five positions on the Nasdaq. This spike followed the reporting of higher-than-expected third-quarter results and a promising outlook for fourth-quarter revenue by Taiwan Semiconductor, which saw its stock price rise by over 11% in recent trades. Conversely, Elevance Health, trading under the ticker $ELV, announced an unexpected decrease in its third-quarter adjusted earnings.
The impact of this disappointing report was felt immediately, with the company's shares plummeting by 12% during intraday trading, marking it as the worst performer on the S&P 500 for the day. In commodity news, the price of West Texas Intermediate crude oil experienced a slight decline of 0.1%, bringing it down to $70.29 per barrel.
Overall, the positive movements in the equity markets reflect a growing optimism about the consumer sector's resilience and the bright prospects for technology stocks, specifically in the semiconductor industry..