FILE PHOTO: Traders work on the floor, as a screen displays The Goldman Sachs logo and trading information, at the New York Stock Exchange (NYSE) in New York City, U.S., April 14, 2025. REUTERS/Brendan McDermid/File Photo

By Sukriti Gupta and Twesha Dikshit

(Reuters) -Wall Street's main indexes were set to open higher on Thursday, boosted by a strong quarterly update from TSMC that reinforced investor optimism around AI and extended a rally in chip stocks.

TSMC, the world's biggest producer of advanced chips, raised its full-year revenue forecast on a bullish outlook for spending on artificial intelligence.

U.S.-listed shares of the company, which also posted a record profit that blew past market estimates, rose 2.5% premarket.

Shares of some major U.S. chipmakers also advanced, building on gains from Wednesday when ASML's solid quarterly results and a $40 billion data center deal by BlackRock and a Nvidia-backed group fueled optimism around AI.

Nvidia rose 1.5%, Micron Technology added 3.8% and Broadcom gained 1.6%.

"AI, the demand and the euphoria around it has been fueled by the mega cap and the hyperscaler spending for it," said Joe Mazzola, head trading & derivative strategist at Charles Schwab.

"Now we're in kind of that second season ... where investors are maybe moving away just from investing in the chip makers and the hyperscalers and looking for some adjacent plays."

The AI-driven momentum and optimism around U.S. rate cuts have helped markets in recent months. AI-related tech stocks were among the biggest boosts to markets this week.

Robust earnings from major U.S. banks also grabbed attention this week, offering fresh signs of economic resilience at a time when official macroeconomic reports remain delayed due to an ongoing government shutdown.

The S&P 500 banking index registered its first three-day winning streak in more than three weeks on Wednesday as the country's six biggest lenders exceeded Wall Street expectations for third-quarter profit this week.

At 8:42 a.m. ET, Dow E-minis were up 112 points, or 0.24%, S&P 500 E-minis were up 28.75 points, or 0.43%, and Nasdaq 100 E-minis were up 162.25 points, or 0.65%.

Meanwhile, investors continued to monitor the recent escalation of China-U.S. trade tensions.

China accused the U.S. of stoking panic over its rare earth controls and said Treasury Secretary Scott Bessent had made "grossly distorted" remarks about a top Chinese trade negotiator, rejecting a White House call to roll back the curbs.

Top U.S. officials on Wednesday blasted China's major expansion of rare earth export controls as a threat to global supply chains, stressing that Washington did not want to escalate the conflict.

President Donald Trump's threat to cancel the U.S.-China meet and impose an additional 100% tariffs on Chinese goods capped investors' risk appetite last week.

Bessent emphasized that Trump is ready to meet Chinese President Xi Jinping in South Korea later this month.

A slate of Fed officials are set to speak throughout the day.

Data showed the Philadelphia Fed Business index for October declined 12.8, compared with a rise of 8.5 estimated by the economists polled by Reuters.

Among other moves, Salesforce rose 6.5% as the company said it expects revenue of more than $60 billion in 2030, above Wall Street estimates.

Hewlett Packard Enterprise slumped 8.2% after it forecast annual profit and revenue below Wall Street expectations.

Charles Schwab rose 2.9% after the brokerage firm's third-quarter results beat analysts' estimates.

(Reporting by Sukriti Gupta and Twesha Dikshit in Bengaluru; Editing by Maju Samuel)