Wall Street Rises: Retail, TSMC, Steve Madden Fuel Gains

Taiwan Semiconductor Manufacturing Company (TSMC) is a global titan in the semiconductor industry. Its performance is often seen as a bellwether for the broader technology sector. Shares of TSMC (NYSE: TSM) are experiencing a notable surge today.

 

This upward movement follows the release of its impressive Q2 results. The company, which is the world’s largest contract chipmaker, plays a pivotal role. It supplies cutting-edge chips to tech giants worldwide. These include industry leaders like Nvidia and Apple.

 

TSMC announced a stronger-than-expected jump in its second-quarter net profit. Specifically, its net profit soared by a remarkable 60.7% year-on-year. This translates to NT$398.3 billion (approximately 13.5billion). Such a significant beat underscores the robust demand for TSMC’s advanced manufacturing services. The company’s revenue also exceeded forecasts. It rose by 39% year-on-year in the second quarter. This marks a new record high for the company, reaching approximately $30.07 billion.

 

The primary catalyst for TSMC’s stellar performance is the surging demand for artificial intelligence (AI) technology. Chips produced by TSMC are absolutely crucial. They are essential for the development and deployment of generative AI. This sector has rapidly expanded. It is actively reshaping the global economy. TSMC’s High-Performance Computing (HPC) platform, which includes AI chips, was a significant driver. It contributed a substantial 60% of total revenue in Q2. This represents an increase of 8 percentage points year-over-year. It solidifies HPC’s position as TSMC’s largest revenue source.

 

Despite ongoing geopolitical and trade tensions, TSMC remains confident. The company acknowledges potential impacts from proposed tariffs. However, its management, including Chairman and CEO C.C. Wei, expressed optimism. They expect the business to remain “very good.” Demand for AI chips, particularly those manufactured using advanced process technologies (7nm and below), remains exceptionally strong. These advanced nodes accounted for 74% of TSMC’s total wafer revenue in Q2.

 

This includes 24% from the 3nm node and 36% from the 5nm node. The company even noted emerging demand from “Sovereign AI” initiatives. This suggests a broader global push for AI capabilities. This robust demand for cutting-edge semiconductors continues to propel TSMC’s growth. It positions the company favorably within the global technology landscape, contributing significantly to today’s market uplift.

 

Steve Madden: An Analyst Upgrade Story

Another significant mover on Wall Street today is Steven Madden (NASDAQ: SHOO). The fashion footwear and accessories company’s shares are experiencing a boost. This follows a notable upgrade from analysts at Citi. Citi has elevated its rating on Steven Madden’s stock. It moved it to ‘Buy’ from ‘Neutral’. This change in recommendation signals a strong vote of confidence from the influential financial institution.

 

The upgrade is underpinned by several key factors. Citi analysts anticipate a significant recovery in the company’s profit margins. They believe that the second quarter of 2025 will represent the low point for these margins. Margins have been under considerable pressure. This pressure largely stemmed from the impact of significant tariffs on goods imported from China. These tariffs, in some cases reaching as high as 145% during Q2 2025, have heavily weighed on profitability.

 

However, Citi expresses optimism for a substantial margin improvement in fiscal year 2026. This is expected as Steven Madden laps these high tariff rates. The company’s current gross profit margin of 41.1% indicates a healthy underlying business.

 

Beyond margin recovery, Citi also believes that the market may be underappreciating the benefits of Steven Madden’s acquisition of Kurt Geiger. The Kurt Geiger acquisition is expected to be a significant growth driver. Citi projects it will contribute to a 12% revenue increase in fiscal 2026. This is considerably higher than the consensus estimate of 7% growth. This strategic acquisition is seen as a move to diversify and strengthen Steven Madden’s brand portfolio. It is expected to unlock new revenue streams and market opportunities.

 

Furthermore, Citi highlights a favorable shift in fashion trends. Analysts observe a movement away from the dominance of sneakers. There is a renewed interest and demand for dress shoes. This trend plays directly into Steven Madden’s core business strength. The company is well-known for its fashionable and accessible dress footwear. This shift in consumer preference is expected to provide a tailwind for sales and market share. Citi’s analysts now forecast Steven Madden to achieve gross margins exceeding 40% in fiscal 2026.

 

This would represent a 100 basis point year-over-year improvement. They project fiscal 2026 earnings per share of at least $2.15. This is significantly above the current consensus estimate of $1.84. Citi also sees a favorable risk/reward profile for the stock. Shares are currently trading at approximately 11.5 times fiscal 2026 earnings estimates. This is notably below the company’s five-year average multiple of about 15 times. This valuation, combined with expected margin recovery and strategic growth from the Kurt Geiger acquisition, makes Steve Madden a compelling ‘Buy’ for Citi.

 

Market Dynamics: Broader Economic Signals

The overall positive movement across Wall Street’s major indexes is a reflection of several interconnected economic and market dynamics. The Dow Jones Industrial Average (^DJI), S&P 500 (^GSPC), and Nasdaq Composite (^IXIC) are all trending higher. This broad-based ascent signals robust investor confidence. It is a testament to the market’s current resilience.

 

The stronger-than-expected retail sales report is a pivotal piece of this puzzle. Released earlier today, this data showed a healthy rebound in consumer spending. Specifically, retail sales rose 0.6% in June, following a previous decline. This figure exceeded nearly all economist estimates. It suggested that consumers are largely shrugging off concerns about tariffs and inflation in the short term. Spending on categories like automobiles, building materials, and clothing all saw significant surges. This broad-based increase is crucial. It indicates that consumer strength is not isolated to a few sectors but is more widespread. This bolsters confidence in the overall health of the U.S. economy.

 

Beyond retail sales, other economic indicators are also contributing to the optimistic outlook. The Philadelphia Fed manufacturing index for July came in well above expectations. It registered a reading of 15.9. This is a substantial improvement from the prior month’s negative reading. This suggests renewed strength in the manufacturing sector. Additionally, weekly jobless claims came in below expectations. There were 221,000 new claims, lower than the anticipated 233,000. Fewer unemployment claims signal a tight labor market. This provides continued support for consumer incomes and spending power.

 

While the market is celebrating these positive signals, some underlying concerns remain. There’s an ongoing debate about the impact of inflation. The retail sales report is not adjusted for inflation. This means that higher prices could partially contribute to the increase in dollar value of sales. The Consumer Price Index (CPI) for June showed a 0.3% monthly rise in inflation, reaching 2.7% year-over-year. Tariffs, particularly on imported goods, are contributing to these rising prices. This could put pressure on consumer purchasing power in the future.

 

However, for now, the prevailing sentiment on Wall Street is one of cautious optimism. The combination of strong consumer demand, evidenced by retail sales, and solid corporate performance, exemplified by TSMC’s earnings, is providing a powerful impetus. This indicates that despite potential headwinds, the market is finding reasons to push higher.

 

Investors are reacting positively to signs of economic stability and corporate resilience, channeling capital into equities and driving up index values across the board. The focus remains on company-specific news and broader macroeconomic trends. They will continue to shape market direction in the coming weeks and months.