AI supports Wall Street again📊Corning surges 10% as generative AI supports sales 📈

• Wall Street indexes are posting moderate gains today. US30 gains nearly 0.4%
• Morgan Stanley's recommendation on TSMC (TSM.US) and J.P. Morgan's comments support chipmakers; Intel posts 5% gains
• Generative AI supports Corning (GLW.US) business, raising quartlery forecasts; shares of the company gain almost 10%
• ZIM (ZIM.US) shares lose 15% on ongoing Gaza peace talks that could lower ocean freight rates
• PepsiCo (PEP.US) will open big company earnings season this week; shares are trading at March lows

U.S. indices opened today's session in a relatively positive mood, although contracts on the Nasdaq 100 (US100) are losing slightly despite clearly improved sentiment in the semiconductor manufacturers sector. The weakness stems from a correction in shares of Alphabet (GOOGL.US) and Meta Platforms (META.US). Software companies are losing, with ServiceNow (NOW.US) leading the sell-off today; analysts at Guggenheim downgraded the company's shares to 'sell' today, suggesting an overvaluation, relative to future risks. The main macro releases of the week will be inflation data from the US (Thursday, 14:30) and Powell's testimony before the US Senate Banking Committee, which begins tomorrow (3 PM BST). The strongest major index today is the DJIA with more than 0.3% up, while the Russell 2000 reflecting sentiment around smaller companies gains more than 1.2%. Markets observe Corning shares; fibre cables producer raised its Q2 forecast due to higher demand in data centres, related to generative AI.

US100 (M15 interval)

We can see that today's session for US100 is practically flat; for the first time in several days, supply volume prevails. In the short term, we can look for stronger support near 20,400 points, where we see the 23.6 Fibonacci retracement of the upward wave from June and previous price reactions. Source: xStation5

TSMC surpassed $1 billion in capitalization today and overtook Berkshire Hathaway to become the 8th most valuable company in the world. Source: xStation5Investors see a strong upward trend in earnings per share for S&P 500 companies; earnings season will show how much the high expectations are justified today. Source: Bloomberg Finance L.P.

Corning - another AI bull market 'racing horse'?

A maker of equipment used in the industrial and scientific industries, Corning (GLW.US) is gaining nearly 10% today, with its shares rising to 2-year highs, after the company raised its sales estimate for the second quarter of the year.

• The company cited high demand for its products in the fiber optics sector, i.e. the optical cables needed to build advanced data centres. As a result, Wall Street may see the company as a beneficiary of higher CAPEX from tech AI companies.
• High-bandwidth cables from Corning are used to connect facilities that may house storage devices and other infrastructure.
• Corning's Gorilla Glass product is used by Apple (iPhone15) and Samsung, among others. The company expects second-quarter sales of about $3.6 versus $3.4 billion previously, and will release detailed second-quarter results on July 30. 

Today, Corning shares surge above 23.6 Fibonacci retracement of the downward wave, since 2020 ($40 per share). We can also see a bullish flag pattern. The most important resistance zone is now placed at $50 per share.

Source: xStation5

TSMC / ServiceNow charts 

TSMC's shares are trading up nearly 3%, but have already given back a good portion of the gains from the beginning of trading. As a result, looking at today's candle, we could potentially see the so-called 'falling star' candlestick formation. Also, the magnitude of the recent price rise is similar to that of the autumn-spring period of 2023 and 2024, which was topped by about 25% correction from local peaks.

Source: xStation5

ServiceNow (NOW.US) shares saw a decline of nearly 5% today. They halted a deep sell-off in June, which pushed them below the 200-period simple moving average SMA200 (red line). A potential pullback of another 10% could bring a significant test of trend strength. The company will report quarterly results on July 24.

Source: xStation5