Preview of US Stock Market | Three major stock index futures rise together, brief exchange of fire between US and Iran intensifies negotiation fog, pre-market trading of space and chip stocks mostly rise.

Pre-market market trends 1. In pre-market trading on May 26 (Tuesday), the futures of the three major U.S. stock indexes rose. As of the time of publication, Dow Jones futures were up 0.61%, S&P 500 futures were up 0.68%, and Nasdaq futures were up 1.02%. 2. As of the time of publication, the DAX index in Germany fell 0.53%, the FTSE 100 index in the UK rose 0.50%, the CAC 40 index in France fell 0.82%, and the Euro Stoxx 50 index fell 0.76%. 3. As of the time of publication, WTI crude oil was down 4.17% at $92.57 per barrel, while Brent crude oil was up 2.73% at $95.97 per barrel. Market News Brief confrontation between the US and Iran intensifies negotiation uncertainty. The U.S. conducted military operations in the Strait of Hormuz, prompting Iran to respond, significantly reducing market expectations of negotiations to restore passage through this key waterway. The U.S. Central Command released a statement that the U.S. military had carried out strikes against Iranian missile launch sites and ships attempting to deploy mines, stating that the purpose was to "protect our forces from threats posed by the Iranian military." Iran subsequently responded, claiming to have shot down a U.S. MQ-9 "Reaper" drone in Iranian airspace in the Persian Gulf. With tensions escalating in the region, Israel also signaled a tougher stance, stating that it would further intensify attacks on Hezbollah in Lebanon during the U.S.-Iran negotiation process. Iran explicitly stated that any peace agreement must include a stop to hostile actions in Lebanon. Prior to this series of escalations, U.S. President Trump had stated on Monday that negotiations with Iran to extend the ceasefire agreement and ease restrictions on passage through the Strait of Hormuz were proceeding "smoothly." U.S. Secretary of State Mike Pompeo said on Tuesday that negotiations with Iran may "take several more days" to finalize, dispelling market expectations of an immediate end to the conflict. JPMorgan bets on the "AI supercycle" reshaping productivity, predicts the S&P 500 will surpass 9000 points. JPMorgan's latest research report predicts that the S&P 500 index may exceed the seemingly unreachable epic milestone of 9000 points within the next year under the frenzy of the tech stock bull market driven by AI computing power trading themes. This target implies an increase of about 22% from current levels. Despite widespread concerns about U.S. inflation pressures and rising energy costs related to political risks from the conflict with Iran, JPMorgan's analysts believe that the actual scale of the AI supercycle may exceed the firm's previous expectations and become a core engine driving the market's continued rise. JPMorgan believes that if artificial intelligence can significantly boost total factor productivity, the valuation expansion of tech stocks will receive incredibly solid fundamental support. US stocks no longer rely solely on the big seven, as profits of the other 493 companies in the S&P 500 also start to surge. The profit growth of the S&P 500 index is spreading from the "big seven" to a broader range of companies. Data from FactSet shows that the "big seven" companies of NVIDIA Corporation, Microsoft Corporation, Alphabet Inc. Class C, Amazon.com, Inc., Meta, Apple Inc., and Tesla, Inc. saw a 63.2% year-on-year increase in earnings per share in the first quarter, the largest increase since the second quarter of 2021. More noteworthy is that the remaining 493 companies in the S&P 500 index saw a 17.4% year-on-year increase in earnings in the first quarter, the fastest growth since the fourth quarter of 2021. Overall, earnings in the first quarter for the S&P 500 index increased by 28.4%. These figures indicate that profit growth is no longer solely dependent on the tech giants. Earnings season ends, US stocks face midterm election curse. Traders in the US are returning after the Memorial Day holiday, during which US stocks showed remarkable resilience in the face of political risks. The S&P 500 index closed higher last Friday, achieving its eighth consecutive weekly gain, marking the longest winning streak since 2023. Despite ongoing upward pressure from global bond yields, the major stock indexes continue to climb steadily. As June approaches, technical strategists are warning investors to beware of potential risks ahead. Data from Dow Jones Market Data shows that summer in midterm election years is traditionally a weak period for US stocks. In these years, the average decline for the S&P 500 index from the end of April to the end of September is 2.8%. However, this year has seen a completely different start, with the index already up 3.7% from May. GDPNow forecasts a sharp 4.3% increase in US GDP in the second quarter, while Pantheon throws cold water: don't be misled by "hype". Increasing doubts are being raised about the reliability of the Atlanta Fed's highly watched GDPNow model among US economists. The model, with very limited basic data, predicts an annualized growth rate of 4.3% for the US economy in the second quarter, more than double the 2.0% growth rate in the first quarter. However, independent macroeconomic research firm Pantheon warns not to be misled, suggesting that second-quarter growth is more likely to be around 1.5%. Pantheon points out that the GDPNow model's forecast is based on "too little data to be credible," and warns that the model heavily relies on statistical extrapolation rather than solid economic data inputs. The firm states that the latest GDPNow estimate hardly includes any hard data from May or June and lacks credible information on volatile subcomponents such as trade and inventories, which can significantly change the overall GDP reading. Former Goldman Sachs Group, Inc. commodity chief: Gold will first fall back to $4,000, then rise to $10,000. Veteran commodity strategist Jeffrey Currie believes that gold may face a short-term pullback as political tensions and slowing central bank purchases weigh on investor sentiment. However, in the long term, the bullish case for gold remains solid. He stated, "Once the energy crisis impacts economic growth, prompting central banks to turn dovish, the trading logic will reset, and I will go long again." In terms of the price movement of gold, this seasoned commodity expert expects gold prices to first fall to around $4,000 per ounce, erasing gains since 2026, before making a push towards the key level of $10,000 per ounce. Individual stock news SpaceX IPO "magnetic effect" continues to ferment! US space sector violently surges. In pre-market trading, the space sector continued its frenzy sparked by SpaceX. As of the time of publication, Momentus (MNTS.US) surged 62%, Redwire (RDW.US) rose 14%, MDA Space (MDA.US) rose 12%, Firefly Aerospace (FLY.US) rose 9%, Voyager Technologies (VOYG.US) rose 6%, Intuitive Machines (LUNR.US) rose 11%, York Space Systems (YSS.US) rose 10%, AST SpaceMobile (ASTS.US) rose 7%, Rocket Lab (RKLB.US) rose 5% - major space concept stocks almost all surged significantly in pre-market trading, continuing the upward trend in the sector since SpaceX submitted its S-1 filing on May 20. Chip stocks rise in pre-market trading. On Tuesday pre-market trading, as of the time of publication, Micron Technology, Inc. (MU.US) rose over 7%, AMD (AMD.US) rose over 3%, Qualcomm (QCOM.US) rose over 2%, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) rose nearly 2% , Intel Corporation (INTC.US), NVIDIA Corporation (NVDA.US) rose over 1%. Tesla, Inc. (TSLA.US) increases stake in CECEP Solar Energy: $250 million facility in Texas revealed, aiming for 100GW target. Tesla, Inc.'s next major energy initiative may not come from its automotive business, but from a large CECEP Solar Energy manufacturing facility located on the outskirts of Houston. Tesla, Inc. is developing a large CECEP Solar Energy manufacturing base at its Bruker Corporation county plant, which is also building a Megapack battery factory. The proposed project will cover almost all aspects of CECEP Solar Energy manufacturing - from pulling crystals, slicing, to manufacturing photovoltaic cells and assembling finished components - forming a vertically integrated production facility with clean room-level manufacturing space, with construction expenditures exceeding $250 million. If completed as planned, the project will be a significant step towards Tesla, Inc.'s goal of achieving an annual CECEP Solar Energy manufacturing capacity of 100 gigawatts, as proposed by Musk. Almost 1 billion euros fine! EU to impose strictest ever DMA regulatory hammer on Alphabet Inc. Class C (GOOGL.US). Reports indicate that the European Commission is preparing to impose a fine of nearly 1 billion euros (about 7.9 billion yuan) on Alphabet Inc. Class C, citing violations of the Digital Markets Act (DMA) by systematically favoring its own products in search results and suppressing competitors. If true, this would be the highest amount fined by the DMA since its full implementation in May 2024, and the most severe enforcement action taken by the EU against the "gatekeepers" of the global search market, following the initial fines imposed on Apple Inc. and Meta. The decision is nearing completion and is expected to be formally announced before the EU's summer break. Priced at 550,000 euros: Ferrari NV (RACE.US) launches first all-electric model, Luce, betting on "scarcity model" to conquer the electric era? Ferrari NV has unveiled its first all-electric car, a five-seater model priced at 550,000 euros (about 640,000 US dollars), marking a break from its fuel-based tradition. Ahead of the car's launch, Ferrari NV delivered disappointing long-term targets to investors last year, raising questions about how it would balance electric technology with its core position as a brand for internal combustion engine models. Luce represents an important test case: Ferrari NV must demonstrate that an electric car can both fit its model of limited supply, high pricing, and emotional appeal, while expanding its product line beyond traditional two-seater and four-seater sports cars. As of the time of publication, Ferrari NV was down 3% in pre-market trading. JOYY, Inc. Sponsored ADR Class A (JOYY.US) Q1 revenue reaches highest year-on-year growth rate in recent years, to return $1.5 billion to shareholders over the next 3 years. JOYY, Inc. Sponsored ADR Class A released its first-quarter 2026 financial report. In the quarter, JOYY, Inc. Sponsored ADR Class A's revenue reached $55.57 million, a year-on-year increase of 12.4%, achieving the highest year-on-year growth rate in recent years; non-GAAP operating profit and EBITDA reached $38 million and $45.7 million, respectively, year-on-year increases of 22.5% and 13.2%. At the same time, JOYY, Inc. Sponsored ADR Class A has upgraded its shareholder return plan, allowing the group to repurchase $600 million worth of stock and distribute $900 million in dividends from 2026 to 2028, with a total amount of $1.5 billion over 3 years. As of the time of publication, JOYY, Inc. Sponsored ADR Class A was trading up nearly 12% in pre-market trading. Important economic data and events preview 10:00 PM Beijing Time: US Conference Board Consumer Confidence Index for May Earnings Preview Wednesday morning: Agora, Inc. Sponsored ADR Class A (API.US), Sociedad Quimica y Minera de Chile S.A. Sponsored ADR Pfd Series B (SQM.US) Wednesday pre-market: PDD Holdings Inc. Sponsored ADR Class A (PDD.US), KINGSOFT CLOUD (KC.US)