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Stocks digest rate outlook, TSMC earnings, Netflix: 3 Things

Stock futures (^DJI, ^IXIC, ^GSPC) are ticking up ahead of Thursday’s market open as Federal Reserve officials, including Cleveland Fed President Loretta Mester, indicate interest rates may stay higher for longer than expected in 2024.

Taiwan Semiconductor Manufacturing Company (TSM) beats first-quarter revenue estimates, the semiconductor company's profit driven by the demand for its AI chips.

Streaming platform Netflix (NFLX) is set to report earnings after the closing bell today.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video transcript

- And so let's get to it with the three things that you need to know. Your roadmap for the trading day. Yahoo Finance's Jen Schonberger, Madison Mills, and Alexandra Canal have more.

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JEN SCHONBERGER: Futures pointing to gains this morning even as investors are scaling back expectations for rate cuts, pricing in the first cut in September with dwindling odds for a second cut this year.

Cleveland Fed President, Loretta Mester became the latest Fed official to dial back the timing of rate cut expectations, saying inflation is running higher than expected this year, and that at some point the Fed will need to start cutting rates, but that the Central Bank doesn't need to be in a hurry to do that.

MADISON MILLS: We're also watching shares of Taiwan Semiconductor this morning. The chipmaker beating Q1 revenue expectations, seeing a jump in profit that was driven by high demand for its advanced chips and also their AI applications. Having said that, Taiwan Semi also revising industry growth expectations lower, excluding their memory chips.

Shares of TSMC ultimately falling this morning, down about 3% as part of a broader chip sell-off.

ALEXANDRA CANAL: And Netflix reports first quarter earnings after the bell on Thursday. Netflix's results will be a big test for streaming giants with all eyes on subscriber growth. Investors are eager to see whether Netflix's crackdown on password sharing is still benefiting the stock.