Futures Rise as Chip Stocks Rise After TSMC Earnings; Economic data in focus

(Reuters) – U.S. stock index futures rose on Thursday, with an upbeat forecast from TSMC sending semiconductor stocks higher as investors awaited key economic data for clues on the financial health of U.S. consumers.

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

The chipmaker's U.S.-listed shares rose 8% in premarket trading, while AI trading favorite Nvidia rose 2.4%.

Broadcom rose 2.3%, Intel rose 1.3% and Arm Holdings rose 3.7%.

Stocks were higher in Wednesday's session, with the Dow Jones Industrial Average hitting its third record close in four sessions, as declines in mega-cap technology stocks were offset by a rally in small-cap and financial stocks.

Futures tracking the small-cap Russell 2000 index edged up 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 0.7% and Alphabet rising 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 that day.

“Growth indicators in the US are now being closely watched 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 rose 35 points or 0.08%, US S&P 500 E-minis rose 22.75 points or 0.39%, Nasdaq 100 E-minis rose 146.5 points or 0.72%.

It's another busy day of corporate earnings ahead as streaming giant Netflix is ​​expected to report its third-quarter earnings after the market closes. Its shares rose 0.5% in premarket trading.

A largely upbeat start to the third-quarter earnings season, following strong economic data and the start of the Federal Reserve's easing cycle, fueled renewed optimism in stock markets and pushed the benchmark index to new record highs.

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

Huntington Bancshares and insurer Travelers Companies are among the companies whose results are expected before the market opens.

Federal Reserve Bank of Chicago President Austan Goolsbee will also speak later in the day.

The Fed remains widely expected to cut interest rates by 25 basis points at its next meeting in November, according to CME's FedWatch.

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