United Microelectronics Corp. shares jumped 7% in US pre-market trading Wednesday, joining a broad semiconductor rebound as cooler-than-expected inflation data boosted risk appetite. The Taiwan-based foundry's advance came ahead of TSMC's quarterly earnings report due Thursday.
United Microelectronics Corp. shares jumped 7% in US pre-market trading Wednesday, joining a broad semiconductor rebound as cooler-than-expected inflation data boosted risk appetite. The Taiwan-based foundry's advance came ahead of Taiwan Semiconductor Manufacturing Co.'s quarterly earnings report due Thursday.
"Semiconductor stocks are catching a bid as the CPI print reduces the probability of aggressive Fed tightening," said Adam Crisafulli, founder of Vital Knowledge. "The easing was pretty broad and spread across a bunch of categories, a relief to investors."
The VanEck Semiconductor ETF advanced 1.2%, with ASML, Intel and Lam Research each gaining more than 3%. The move extends a rebound in chip stocks after a volatile week that saw memory names like SK Hynix swing 27% higher Tuesday following a 9% decline Monday. TSMC, the world's largest contract chipmaker, is scheduled to report quarterly earnings Thursday, with analysts expecting earnings per American depositary receipt of $3.76, according to Visible Alpha estimates.
UMC's pre-market surge signals renewed investor appetite for foundry stocks as the June CPI report showed consumer prices rising 3.5% year-over-year, below the 3.8% consensus estimate. Traders now see a 17% probability of a Fed rate hike at the July meeting, down from 37% before the data, reducing headwinds for growth-sensitive semiconductor shares. The cooler inflation print also pushed the 10-year Treasury yield to 4.58%, down four basis points from Monday, further supporting the rotation into technology stocks.
This article is for informational purposes only and does not constitute investment advice.
