US STOCKS-Wall St futures rise as TSMC sparks chip rally ahead of big bank earnings

By Medha Singh and Pranav Kashyap

Jan 15 (Reuters) - U.S. stock index futures ticked higher on Thursday after TSMC delivered a knockout quarter, sparking a fresh rally in chipmakers, while Wall Street braces for earnings from the financial heavyweights.

The bounce follows a bruising session that left the major indexes reeling. The S&P 500 .SPX and the Nasdaq .IXIC posted their sharpest drops of the year so far, while the Dow pared midday losses to finish essentially unchanged.

Chip stocks such as Nvidia NVDA.O rose 1.5%, while Broadcom AVGO.O and Micron MU.O gained 2.5% and 3.5%, respectively, in premarket trading on Thursday.

Chipmaking tool companies Applied Materials AMAT.O and Lam Research LRCX.O rose 8.3% each, and KLA KLAC.O gained 6.3%.

The gains came on the back of Taiwan's TSMC 2330.TW, the world's main producer of advanced AI chips, strong results and a sturdy growth outlook that signaled that more U.S. manufacturing capacity is on the way.

U.S.-listed shares of TSMC TSM.N jumped 6.7%.

BlackRock BLK.N, the world's largest asset manager, gained 2% after reporting a higher fourth-quarter profit, as a rally in markets lifted fee income and pushed its assets under management to a record.

Goldman Sachs GS.N fell 0.2% and Morgan Stanley MS.N rose 0.9% before their quarterly reports that would wrap up earnings from major Wall Street lenders.

Financial stocks have come under pressure this week on worries over the impact of a proposed one-year cap on credit card interest rates at 10%, even as some of the banking giants posted robust profit growth.

Investors are also rotating out of richly valued tech and other growth stocks to more unloved parts of the market that hold attractive valuations.

S&P 500 materials .SPLRCM and industrials indexes .SPLRCI clinched new peaks, while real estate .SPLRCR and energy .SPNY hit multi-month highs this week, as the tech-laden S&P 500 slid to a two-week low.

The S&P 400 mid-cap and Russell 2000 small .RUT also clinched new peaks this week.

At 06:52 a.m. ET, Dow E-minis YMcv1 were up 45 points, or 0.09%, S&P 500 E-minis EScv1 were up 26.75 points, or 0.38%, and Nasdaq 100 E-minis NQcv1 were up 221.5 points, or 0.86%.

With geopolitical risks and economic indicators having little sway over equities, investors are zeroing in on fundamentals as the fourth‑quarter earnings season gets underway, which may reveal whether the market's historic rally still has legs.

Analysts expect S&P 500 companies to report 8.8% average growth in quarterly profit from a year ago, according to LSEG IBES data.

Meanwhile, the Labor Department's data at 8:30 a.m. ET is expected to show weekly jobless claims rose to 215,000 in the week ended January 5.

Traders are still pricing in at least two rate cuts by year-end, according to LSEG.

Markets will also be closely watching for fresh signals from policymakers, including Federal Reserve board Governor Michael Barr and regional Fed chiefs Raphael Bostic, Tom Barkin, and Jeffrey Schmid. They are scheduled to speak later in the day.

"We expect the labor market to remain soft, and two additional payroll reports ahead of the March policy meeting are likely to be followed by a 25-basis-point interest rate cut, which should continue to support stocks," UBS analysts said.