A look at the day ahead in U.S. and global markets from Mike

Dolan

Another impressive earnings beat from Taiwan's chipmaking giant

TSMC may help calm this week's tech stock rout, as the

earnings season turns toward wobbly megacaps with an update from

Netflix ( NFLX ) on Thursday - just as the European Central Bank meets.

An increasingly volatile week on Wall Street has seen a wild

rotation from pricey tech giants to re-invigorated small caps

. As Deutsche Bank notes, the out-performance of the

Russell 2000 over the Nasdaq in the past five trading

days has been the biggest since the former index began in 1979.

But nerves about the chip giants were jangled further by

reports of new U.S. curbs on the sector and White House hopeful

Donald Trump's doubt about U.S. military defence of Taiwan.

Wall Street's semiconductor index lost more than $500

billion in value on Wednesday in its worst session since 2020

after a report said the United States was mulling tighter

restrictions on exports of advanced chip technology to China.

Artificial Intelligence heavyweight Nvidia ( NVDA ) fell

almost 7% during the session.

Although Dutch chipmaking equipment provider ASML,

which slumped 13% yesterday, continued to struggle in Europe,

TSMC's update may help steady the ship.

U.S. listed shares of TSMC rebounded 3% on Thursday after

the firm - a major Apple ( AAPL ) and Nvidia ( NVDA ) supplier - beat

profit forecasts and said its revenue in the current quarter

will increase by as much as 34%.

That, in turn, has seen a rebound in related U.S. stocks,

with Nasdaq futures up 0.5% ahead of today's bell and

S&500 futures up too. The VIX volatility gauge has ebbed

from its highest level since May.

Streaming bellwether Netflix ( NFLX ) tops another packed

earnings diary later.

Stocks around the world were similarly in foment, with

tech-heavy Japanese and South Korean benchmarks

falling overnight - with the Nikkei the standout loser with a

drop of 2.2%, exaggerated by the week's yen surge.

On the back of a weaker dollar more generally, which sent

the DXY index to four-month lows before stabilising

today, dollar/yen skidded to its lowest in over a month

amid jitters around another suspected round of yen-buying Bank

of Japan intervention on Wednesday.

BOJ data suggests it may have bought nearly 6 trillion yen

($38.37 billion) last week and traders said this week's moves

bore the hallmarks of further intervention - or at least of

markets easily spooked by that prospect.

Chinese equities held in positive territory

and the yuan froze, however, as details of the ruling

Communist party's "Third Plenum" started to emerge in the wake

of another big miss in second-quarter Chinese GDP growth earlier

this week.

A communique issued on Thursday after the meeting said China

will enhance the role of market mechanisms in the economy,

create a fairer and more dynamic market environment and optimise

the efficiency of resource allocation.

European stocks also got a foothold, with Britain's

FTSE100 outstripping the rest, helped by news of slowing

UK wage growth in the three months to May and as the pound

slipped from 1-year peaks back under $1.30.

European macro markets now await the ECB's rate decision,

where the central bank is expected to keep policy unchanged

while signalling its next move is set to be a cut. Markets bet

the ECB's second rate cut of the year will come in September and

the euro retreated slightly from Wednesday's four-month

peak.

A September ECB cut would match where futures markets now

firmly place the Federal Reserve's first move, with top Fed

officials on Wednesday signalling it's "closer" to cutting rates

given inflation's improved trajectory and a labor market in

better balance.

In an interview with the Wall Street Journal, New York Fed

boss John Williams said: "We're actually going to learn a lot

between July and September."

The comments came as U.S. retail and industry readouts for

June this week came in better than forecast, pushing the Atlanta

Fed's closely-watched "GDPNow" estimate up another couple of

notches to 2.7%.

But helped by decent demand at Thursday's 20-year Treasury

bond auction, 10-year yields fell to four-month lows

at 4.14%.

Key developments that should provide more direction to U.S.

markets later on Thursday:

* European Central Bank policy decision, press conference from

ECB President Christine Lagarde; South Africa Reserve Bank

policy decision

* Philadelphia Federal Reserve's July manufacturing survey, U.S.

weekly jobless claims, May TIC data on Treasury holdings and

flows

* US corporate earnings: Netflix ( NFLX ), Blackstone, M&T Bank, Textron,

Snap-On, Cintas, Marsh & McLennan, Abbott Laboratories, KeyCorp,

DR Horton, Domino's Pizza, PPG, Intuitive Surgical

* Fed Board Governor Michelle Bowman, San Francisco Fed

President Mary Daly and Dallas Fed chief Lorie Logan all speak

* Donald Trump speaks to the Republican National Convention

* European Parliament votes on new European Commission President

* European political leaders meet at EPC summit in Oxford

* US Treasury auctions 10-year inflation-protected securities,

4-week bills

(Editing by Christina Fincher)