Nasdaq futures edged upward early on Thursday, July 17, following fresh record highs in the broader tech-heavy Nasdaq Composite. The modest gains were largely driven by renewed investor enthusiasm in the technology sector, particularly after robust earnings projections from Taiwan Semiconductor Manufacturing Company (TSMC) and a better-than-expected June retail sales report. In contrast, S&P 500 futures remained flat, signaling a more cautious tone across broader market indices.
TSMC, a global leader in semiconductor manufacturing, reported record quarterly profits and raised its annual revenue forecast by approximately 30%. This bullish outlook is being attributed to the rapid expansion of demand for artificial intelligence (AI) applications, which has significantly boosted chip orders. The news sent U.S.-listed chipmakers like AMD, Nvidia, and Super Micro soaring in premarket trading. As a result, Nasdaq futures gained ground, while the Dow Jones Industrial Average futures showed more muted movement.
The optimism was reinforced by a strong U.S. retail sales report for June. According to the Commerce Department, retail sales rose by 0.6% during the month, significantly outperforming analyst expectations of just 0.1%. The rebound came after a disappointing 0.9% decline in May and signaled enduring consumer resilience despite ongoing inflationary pressures and high interest rates. The stronger-than-expected data also lifted the U.S. dollar and helped stabilize Treasury yields, further calming investor nerves.
Markets briefly wobbled on Wednesday amid speculation about potential leadership changes at the Federal Reserve. However, President Donald Trump denied reports that he was considering removing Fed Chair Jerome Powell, easing investor anxieties and helping to contain any lasting volatility. Despite the political noise, broader economic fundamentals helped keep sentiment positive. Futures traders are now pricing in roughly a 55% chance that the Federal Reserve will implement a rate cut by September, based on current inflation trends and recent economic data.
Meanwhile, geopolitical developments remain a lingering concern for global investors. Trade tensions persist, with an August 1 deadline approaching for a proposed new round of tariffs. These developments, particularly in the context of U.S.-India and U.S.-EU trade relations, are being closely monitored by analysts for their potential to disrupt supply chains and impact corporate earnings projections.
All eyes are now on Netflix, which is set to report its second-quarter earnings after the market closes. Wall Street is anticipating approximately $11.04 billion in revenue for the quarter, representing a year-over-year increase of about 15%, along with an expected $7.03 in earnings per share. Netflix’s ad-supported tier, introduced in April, has quickly amassed 94 million users, and the company aims to double its ad revenue this year through proprietary ad tech and targeted offerings.
The streaming giant’s subscriber growth has also been buoyed by a crackdown on password sharing, which contributed to 41 million new account sign-ups in 2024. Analysts will be closely watching whether this trend continues into Q2. At the same time, operating margins, which climbed from 28.1% in Q1 2024 to 31.7% in Q1 2025, are expected to rise further, with company guidance suggesting a target of 33%. However, the firm’s aggressive push into live content—including sports streaming rights for the NFL and WWE—could challenge profitability, given the higher production and licensing costs involved.
Although Netflix shares are trending slightly higher in premarket trading, investor reaction will ultimately depend on the company’s ability to sustain revenue growth while managing costs. A strong report could spark further gains in the tech sector, while any indication of weakening margins or faltering ad revenues may temper enthusiasm.
As the trading day unfolds, markets are bracing for additional updates that could shape sentiment further. These include further corporate earnings reports, labor market statistics, and any Fed commentary. Traders will also remain focused on how the AI boom continues to reshape technology valuations, especially in light of TSMC’s results and Nvidia’s upcoming report.
Overall, the mood remains cautiously optimistic. While Nasdaq futures benefited from the tech sector’s momentum and solid economic indicators, broader concerns about monetary policy and global trade keep a cap on enthusiasm. Today’s earnings results, especially from Netflix, could prove pivotal in determining the short-term trajectory of the market.
