A look at the day ahead in European and global markets from

Stella Qiu

The monstrous rally in Asian chipmakers this year is hitting a

rocky patch. The jitters are evident in the sheer volatility of

markets such as South Korea's KOSPI, where wild swings in chip

giants Samsung Electronics ( SSNLF ) and SK Hynix ( SKHY )

have become a daily event.

The index slid 6% on Thursday, taking it down 27% from its

June peak and adding to the pain for some leveraged retail

funds. The tumble tends to vindicate investors' doubts at a time

when everyone is worried about the rising cost of AI capex - can

this massive spending actually turn a profit?

All eyes now turn to today's second-quarter earnings from Taiwan

Semiconductor Manufacturing Co ( TSM ) , the world's

foundry king for the advanced chips that Nvidia ( NVDA ) sells

to power the AI revolution.

Expectations are for a nearly 60% surge in net profit for the

quarter, and even if the chip giant beats that it may not be

enough. It will take a flawless report, coupled with more than

rosy guidance, to avoid being punished. Just look at ASML's

results.

While the rotation from memory and hardware has left most

Asian share markets in the red, European futures seem less

troubled, heading for a flat open.

Wall Street futures were 0.1% higher, after a stronger session

overnight thanks to cooler inflation and robust bank earnings.

Results from Netflix, GE and a few banks, including U.S. Bancorp

and State Street, are due later.

U.S. retail sales for June are seen rising a modest 0.2%,

after May's 0.9% jump, but the control group is forecast at a

solid 0.5%. Any weakness could support the dovish turn in Fed

bond markets, offsetting concerns about demand.

Oh, and there's still the matter of a war going on in the Middle

East, with the U.S. military conducting another wave of strikes

on Iran and Tehran saying it targeted a gathering of U.S.

troops.

That's why Brent is still up 18% in the past two

weeks to $85 a barrel, and why central banks everywhere remain

wary, with South Korea raising rates for the first time in 3-1/2

years.

For now, bond investors are just relieved the benign CPI and

PPI readings have seen pricing for a July hike from the Fed fade

to just 10%, from more than 40% earlier this month.

Key developments that could influence markets on Thursday:

-- TSMC earnings due at 0530 GMT

-- UK monthly GDP, industrial output and trade balances for

May

-- Earnings from Netflix, GE Aerospace, Bancorp and State

Street

-- U.S. June retail sales, as well as weekly jobless claims

(Editing by Kate Mayberry)