Preview of US Stock Market | Three major stock index futures fell together, heavy-weight US May CPI is coming, and Oracle announced its financial report after the market closes.

Pre-market Market Trends 1. Before the market opened on June 10 (Wednesday), the futures of the three major U.S. stock indexes fell sharply. As of the time of writing, Dow futures were down 1.01%, S&P 500 futures were down 1.14%, and Nasdaq futures were down 1.69%. 2. As of the time of writing, the Germany DAX index fell 1.10%, the UK FTSE 100 index fell 0.75%, the France CAC40 index fell 0.78%, and the Euro Stoxx 50 index fell 1.01%. 3. As of the time of writing, WTI crude oil rose by 2.01% to $89.97 per barrel, while Brent crude oil rose by 1.71% to $93.01 per barrel. Market News U.S. May inflation fears may return to the "4 era"! Wall Street's rate cut dreams shattered, the Fed may be forced to resume "raising rates". With the continued rise in the cost of living for American consumers, the inflation data to be released on Wednesday is expected to exceed another unpleasant threshold. If Wall Street's consensus forecast is accurate, the May U.S. Consumer Price Index (CPI) is expected to increase by 0.5% month-on-month, and the year-on-year increase will reach 4.2%. This will be the first time the CPI has exceeded 4% since May 2023, and will set a new high since April of that year. Of course, compared to the overall inflation rate of only 2.4% a year ago, the sharp increase in this round of data is largely attributed to the soaring energy costs caused by the Middle East war. However, even the core CPI, excluding food and energy, is expected to increase by 2.9% year-on-year in May. As rising oil prices begin to transmit to the entire economy, people increasingly expect inflation to not dissipate in the short term. With the federal funds rate still at a relatively high level, and the resurgence of inflation will mean that the Fed, not only loses room for rate cuts, but also faces pressure to tighten policies again. In this context, it is no longer a small probability event for the Fed to resume rate hikes this year. For the Fed's decision-making levels, the June to July interest rate meetings will be a key observation window. If the May inflation data is confirmed, and the trend continues in June, the Fed is very likely to take preventive rate hike measures in the third quarter to anchor inflation expectations. After the U.S. and Iran exchanged fire again, there were reports of significant progress in the negotiations. According to reports citing U.S. officials and multiple diplomats, the negotiations between the United States and Iran mediated by Pakistan have made "significant progress", with a change in the U.S. position on the issue of Iran's enrichment uranium: they no longer require Iran to ship its high-enriched uranium abroad, but to cooperate with the International Atomic Energy Agency for dilution. The report said that the possibility of an agreement between the United States and Iran is much greater than previously expected, and the two sides are currently mainly bargaining around the four demands proposed by the United States. However, despite U.S. officials claiming that there has been "significant progress" in the negotiations between the United States and Iran, there are still significant differences between the two sides. Iran has made demands to the United States in negotiations, including lifting sanctions, releasing frozen overseas assets before reaching a final agreement, but the U.S. is unlikely to agree. In addition, the latest dynamics between the U.S. and Iran in the recent clashes may pose new obstacles to reaching an agreement. Several top Wall Street banks have warned of risks of a sharp decline in the U.S. stock market. Data shows that the current long crowdedness of momentum trading in the U.S. stock market has reached historical extremes, with low short positions, and the market structure is extremely unbalanced. Coupled with high interest rates persisting and a narrowing breadth of market trading, once sentiment turns, centralized fund liquidation will trigger violent fluctuations. Barclays predicts that this round of risk-off operations by funds could create the largest scale of de-risking in this phase, and the market will continue to be under pressure this week. JP Morgan has downgraded its short-term rating on U.S. stocks to tactical caution, warning of profit-taking pressure on technology stocks. Meanwhile, as the U.S. stock market faces a wave of new listings, with a large number of AI companies listing to ease market liquidity, this further exacerbates the adjustment pressure. Citi says that the recent minor corrections have only slightly repaired the risk exposure, with a high long position in the Nasdaq, causing intense long-short games. Overall, the high-risk accumulation in the U.S. stock market continues to increase, with position overcrowding, new listings adding pressure, and high interest rates, leading to increased short-term oscillations and corrections. Goldman Sachs Group, Inc. completely surrenders! Erase the rate cut forecast for 2026 and warn that the Fed may be forced to resume rate hikes. Goldman Sachs Group, Inc.'s chief U.S. economist, Merick, canceled the bank's previous forecast of two rate cuts in 2026 in the latest report, replacing it with predictions of rate cuts of 25 basis points in June and December 2027. The trigger for this shift was the strong May non-farm payroll report. Goldman Sachs Group, Inc. not only postponed the timing of rate cuts, but also doubled the probability of a small rate hike provided in financial terms. Although the bank did not make rate hikes its "base case", this move indicates that the probability distribution of the Fed's potential policy direction is shifting in a more hawkish direction. Merick wrote about the risks of rate hikes, stating, Resilient economic activity and employment data have also lowered the threshold for rate hikes. This is not because the data suggests a risk of economic overheating, but because a stronger economic starting point reduces the risk of a rate hike becoming a 'costly mistake'." Citi warns: Gold prices may fall to $3500. The decline in gold prices has exceeded market expectations. Spot gold fell below the $4200 level in intraday trading and was reported at $4167.82 per ounce at the time of writing. The gains for the year have been completely erased, with cumulative losses exceeding 2%. Citi has lowered its three-month target price for gold from $4300 per ounce to $4000. The bank warns that if the blockage in the Strait of Hormuz continues until the end of the summer, the contraction in gold purchases could push prices down to $3500 per ounce. In the meantime, stronger-than-expected U.S. employment data has pushed the dollar to a near two-month high, putting additional pressure on gold priced in dollars. This marks the second time in just a month that Citi has revised its forecast for gold prices. In mid-May, Citi publicly stated its short-term bearish view on gold prices, while also predicting that gold prices would reach $4300 per ounce in the next 3 months. Stock News Well-known institutions bearish! Optical communication stocks weak in pre-market trading. Before the opening of the US market on Wednesday, as of the time of writing, Ciena (CIEN.US), Lumentum (LITE.US), Coherent (COHR.US), Nokia Oyj Sponsored ADR (NOK.US) were down nearly 2%, Corning Inc (GLW.US) was down nearly 3%, Marvell Technology, Inc. (MRVL.US), POET Technologies (POET.US), Credo Technology (CRDO.US) were down nearly 4%. On the news front, the AI industry star analysis agency SemiAnalysis released a report directly addressing the delay of two core technological paths in AI data centers. The report states that the shipment of NVIDIA Corporation's 800VDC power architecture will be delayed until 2028, and the scale production of CPO (Co-Packaged Optics) may be delayed until 2028 or even 2029. However, executives in NVIDIA Corporation's networking division have given a completely opposite optimistic view of the future of CPO, stating that "CPO is the most exciting technology right now" and that they expect mass shipments to begin in the second half of the year. Tech stocks fall across the board in pre-market trading. Before the market opened on Wednesday, as of the time of writing, Oracle Corporation (ORCL.US), AMD (AMD.US), Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), Intel Corporation (INTC.US), Qualcomm (QCOM.US) fell over 3%, while Salesforce, Inc. (CRM.US), ASML Holding NV ADR (ASML.US), NVIDIA Corporation (NVDA.US), Broadcom Inc. (AVGO.US) fell over 2%. In addition, storage chip stocks collectively declined, with Micron Technology, Inc. (MU.US), Western Digital Corporation (WDC.US) down nearly 4%, Seagate Technology Holdings PLC (STX.US), SanDisk (SNDK.US) down over 2%. "AI Chip Clearinghouse" transforms into "AI Infrastructure Bank"! OpenAI reportedly negotiating a $500 billion data center lease, with NVIDIA Corporation (NVDA.US) providing financial support. OpenAI, which is preparing for an IPO, is reportedly in deep negotiations for an unprecedentedly large data center lease. The project is located on federal land in Pike County, southern Ohio, with a planned total capacity of 10 gigawatts and an expected construction cost of at least $500 billion. This is not only OpenAI's largest infrastructure layout to date, but also marks a new stage in the global AI arms race where capacity equals competitiveness. The uniqueness of this transaction lies in NVIDIA Corporation's rare role design. According to sources, NVIDIA Corporation will not only supply all GPU hardware for the facility but will also provide credit guarantees for OpenAI's lease payments and SB Energy's project financing for the first time, creating a new model of deep involvement of chip manufacturers in infrastructure financing. At the same time, Alphabet Inc. Class C is also providing a $350 billion backstop arrangement for competitor Anthropic's TPU lease obligations, and the financial ties between AI giants and chip manufacturers have escalated from "investing" to "balance sheet-level guarantees". Strong AI demand continues! Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) sees a 30% year-on-year increase in revenue for May. Global wafer foundry giant Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR announced that its May revenue increased by 30% year-on-year to NT$416.98 billion (about $13.2 billion), reflecting the continued strong demand arising from the global competition to build artificial intelligence (AI) infrastructure. The company's combined revenue for April and May increased by about 24% year-on-year, and analysts expect its second-quarter revenue to increase by 35% year-on-year. The Chairman and CEO of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR Wei Zhejia expressed confidence in the company's growth prospects for the coming years at the annual shareholders meeting last week. Benefiting from the strong demand for computing power and advanced semiconductors driven by the AI boom, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is confident in the growth prospects for the future. Wei Zhejia has repeatedly emphasized that even with the addition of advanced process or packaging capacity in the United States, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will still be unable to meet the nearly endless demand for AI computing infrastructure driven by AI for many years. This echoes the statements made by NVIDIA Corporation CEO Huang Renxun. Huang Renxun stated that the company is still constrained by insufficient supply capacity. Hollywood's "Century Merger" faces obstacles again! Paramount (PSKY.US) acquisition of Warner Bros. (WBD.US) under EU review, Middle Eastern funds become a focus of scrutiny. The EU is currently reviewing the transaction where Paramount is exploring a deal to acquire Warner Bros. for $110 billion according to the Foreign Subsidies Regulation (FSR), with regulatory agencies investigating whether Middle Eastern funds have supported the acquisition. The EU's FSR aims to prevent companies funded by sovereign states (such as the resource-rich Gulf countries) from distorting fair competition within the EU. If regulators find issues, a full investigation may be launched, and Paramount may need to take remedial measures to alleviate regulatory concerns. This Hollywood "Century Merger" is facing numerous legal obstacles. At the end of March this year, the U.S. Department of Justice issued a subpoena requesting information on how the merger would affect film and TV production output, content copyrights, streaming competition, and the movie theater industry. In addition, California, New York, and several other U.S. states are preparing to file lawsuits to block the deal. The Competition and Markets Authority (CMA) in the UK has also launched a formal investigation into the deal. Important Economic Data and Events Forecast 8:30 pm Beijing time, U.S. May CPI data 11:00 pm Beijing time, U.S. June IPSOS Major Consumer Sentiment Index PCSI Earnings Outlook Thursday morning: Oracle Corporation (ORCL.US)