Preview of US Stock Market | The three major stock index futures are mixed, with most technology stocks rising before the market opens. The ceasefire between the US and Iran is broken, intensifying concerns about the Federal Reserve turning hawkish.

Pre-market Market Trends 1. In pre-market trading on July 9th (Thursday), the futures of the three major US stock indexes were mixed. As of the time of writing, Dow futures were down 0.13%, S&P 500 futures were up 0.15%, and Nasdaq futures were up 0.64%. 2. As of the time of writing, the German DAX index was up 0.23%, the UK FTSE 100 index was down 0.61%, the French CAC 40 index was up 0.28%, and the Euro Stoxx 50 index was up 0.59%. 3. As of the time of writing, WTI crude oil was up 0.57% at $73.94 per barrel. Brent crude oil was up 0.68% at $78.55 per barrel. Market News Nearly 70% of US tech stocks fell into bear market territory! The AI faith faces a major test: taking profits or hitting a peak in the cycle? The AI star stocks that have led the market in recent months are now collectively strugglingover 69% of the component stocks in the S&P 500 Information Technology sector have fallen more than 20% from their 52-week highs and entered bear market territory. However, despite the significant sell-off, some analysts do not believe this necessarily means a trend reversal. They believe that profit-taking is a natural process after a significant rise. Some analysts pointed out that in the past few quarters, tech stocks have typically come under pressure in the month following the release of earnings and then rebound before the next earnings report. In addition, Goldman Sachs Group, Inc. stated in a research report this week that there are no signs yet of a peak in the AI-driven tech upcycle. The report suggests that semiconductor and electronic component supply has not exceeded demand, and there are no signs of a slowdown in technological advancement. The Wall Street giant views the recent market correction as a healthy consolidation following rapid price increases, rather than a reversal of the tech stock trend. Goldman Sachs Group, Inc. believes that this cycle has the potential to be one of the largest and longest-lasting tech upcycles in history. "Debt vigilante" Ed Yardeni: ceasefire breakdown brings market back to square one, oil price surge may force the Fed to hawkish turn again. With the political crisis in the Middle East causing a surge in oil prices and renewed concerns about inflation and the prospect of Fed tightening, Ed Yardeni, President of Yardeni Research, warned that the end of the ceasefire has brought investors back to a "turning point" and the Fed may be forced to further tighten monetary policy. Yardeni, the "debt vigilante", said in an interview, "Inflation concerns are starting to rear their ugly head again. As a result, the Fed is back in focus. Not only is the Fed in the process of tightening policy, they may actually need to raise rates." He described the situation as "a GEO Group Inc political crisis that won't disappear or end." Yardeni said the Fed has shifted from a dovish stance to a hawkish stance focused on price stability. He noted that the labor market appears stable, but "depending on what happens in the Middle East, all bets are off." FOMC minutes from the first rate decision meeting under Powell published! Officials debate interest rate path, some believe a rate hike was warranted in June. The minutes of the Federal Open Market Committee's monetary policy meeting on June 16-17, chaired by the new Chairman Kevin Powell, show that the committee engaged in heated discussion about the future interest rate path. Although the committee ultimately voted unanimously to keep the federal funds rate target range unchanged at 3.50% to 3.75%, officials still had significant disagreements regarding inflation trends and future policy direction, with some officials even believing that there was justification for a rate hike at the June meeting. The minutes show that a minority of participants believed that there was reason to raise borrowing costs at the June meeting, but ultimately supported keeping rates unchanged at this meeting. Overall, most officials believe that there are scenarios in the future where inflation gradually falls back to the 2% target, but there is also a risk of inflation remaining elevated; almost all officials holding the latter view indicated that if high inflation persists, a rate hike would be a necessary policy choice. IMF pours cold water: the inflation aftermath of the US-Iran conflict won't easily dissipate. The International Monetary Fund (IMF) stated in its latest Economic Outlook report that the actual damage to the US and global economies from the US-Iran conflict is not as severe as previously anticipated, but this political turmoil could give rise to new and sustained inflationary pressures, making it difficult for prices to fall back in the short term. The IMF said that after the fragile ceasefire between the US and Iran, international oil prices fell faster than expected, but the damage caused by the conflict has already occurred, and the repair process will take a long time. Even if the US-Iran conflict were to completely end, US inflation is not expected to fall back to the Fed's 2% target range until the end of 2027, and in the short term, it will not come close to this standard. The IMF also warned that the US and global economies still face significant downside risks. On one hand, the Middle East conflict remains unresolved and could escalate again at any time, pushing up energy inflation; on the other hand, the market's excessive hype about the artificial intelligence industry could trigger a deep stock market correction once expectations reverse. US-Iran conflict escalation drags Persian Gulf shipping volume down to 70%, Goldman Sachs Group, Inc.: Middle East oil production recovery process could be disrupted. Goldman Sachs Group, Inc. pointed out that if tensions in the Middle East escalate again and disrupt shipping in the Strait of Hormuz, the process of restoring oil supply in the region could be hindered. According to Goldman Sachs Group, Inc.'s estimates, crude oil production in the Gulf region in June this year was still about 10.5 million barrels per day lower than pre-war levels. Analysts led by Yulia Zhetkova Grigsby stated in a report on July 8th, "While oil-producing countries in the Middle East have begun reactivating shut-in wells over the past month, a disruption in navigation in the Strait of Hormuz could slow down the pace of production recovery." This week, the global energy market experienced severe volatility due to renewed tensions between the US and Iran, with Brent crude oil futures briefly surpassing $80 per barrel once again. After the US and Iran launched attacks on each other for the second consecutive day, maritime traffic in the strait came to a virtual standstill, testing the fragile peace agreement that had been in place, while the waterway had previously experienced several attacks on commercial ships. Stock News Most US tech stocks were up in pre-market trading. On Thursday's pre-market trading for US stocks, as of the time of writing, Micron Technology, Inc. (MU.US), Western Digital Corporation (WDC.US), and SanDisk (SNDK.US) were up over 4%, Seagate Technology Holdings PLC (STX.US) was up over 3%; Intel Corporation (INTC.US) was up over 33%, AMD (AMD.US), Broadcom Inc. (AVGO.US), and Qualcomm (QCOM.US) were up nearly 2%; of the "Seven Tech Giants", only NVIDIA Corporation (NVDA.US) and Tesla, Inc. (TSLA.US) were slightly up; optical communication stocks were generally up, with AXT Inc (AXTI.US) up over 6%, Corning Inc (GLW.US), Marvell Technology, Inc. (MRVL.US) up over 5%, Lumentum (LITE.US), Astera Labs (ALAB.US), Credo Technology (CRDO.US) , and Coherent (COHR.US) were up over 4%, while Nokia Oyj Sponsored ADR (NOK.US) was up over 2%. PepsiCo, Inc. (PEP.US) exceeds Q2 revenue expectations, weak performance in the North American market weighs on earnings. The financial results show that PepsiCo, Inc. Q2 net revenue grew by 6.4% year-on-year to $24.18 billion, surpassing the market's expectation of $23.95 billion. Operating profit was $4.02 billion, slightly below the market's expectation of $4.06 billion, and core earnings per share were $2.20, slightly exceeding the market's expectation of $2.19. Despite revenue growth, earnings performance was slightly lacking. The core of the performance drag comes from the North American market. The company's management pointed out that sales in the US food and beverage sector slowed down, with inflation squeezing household budgets, causing consumers to cut back on daily expenses. Specifically, North American snack sales were basically flat, while beverage sales declined by 4%. In contrast, international markets continued to provide supportthe demand for snacks and beverages in international markets was relatively strong, driving overall snack sales up by 3% and beverage sales up by 2%. This helped offset the weakness in the North American market. Furthermore, the company still forecasts full-year organic revenue growth of 2% to 4%, with a midpoint forecast of 3%, which is better than the market's expectation of 2.76%. NVIDIA Corporation (NVDA.US) unveils self-developed large model Nemotron 3 Ultra: full value for money, inference costs drop sharply by 90% compared to proprietary models. NVIDIA Corporation announced that its Deep Agents kit specifically designed for Nemotron 3 Ultra can achieve inference costs 10 times lower per run compared to some "leading" proprietary models, enabling more tasks to be completed and higher throughput. NVIDIA Corporation added that when compared against LangChain's Deep Agents benchmark test, Nemotron 3 Ultra also performed equally well in business tasks, demonstrating parity with the top-scoring model. NVIDIA Corporation's goal in developing large models has never been to directly compete with OpenAI or Anthropic through the sale of large model APIs, but rather to consolidate and expand its absolute dominance in the AI industry chain. NVIDIA Corporation's biggest moat is not the chip itself, but its CUDA software ecosystem. Now, by launching its own large model (such as Nemotron 3 Ultra) and packaging it into the NVIDIA NIM (microservices framework), the company allows enterprises to deploy and fine-tune on NVIDIA Corporation's hardware with a single click. NVIDIA Corporation's large model development aims to make its software stack (AI Enterprise) more attractive, thereby binding customers firmly into NVIDIA Corporation's hardware and software ecosystem. SpaceX (SPCX.US) collaborates with Cursor to release Grok 4.5: focusing on coding and financial tasks, challenging Anthropic and OpenAI. SpaceX's SpaceXAI launched a new artificial intelligence model developed in cooperation with AI programming startup Cursor, aimed at more proficiently handling financial, legal, and programming tasks, as part of Elon Musk's initiative to gain an advantage in competition with rivals like Anthropic and OpenAI. According to a blog post released on Wednesday, this new model is designed to "handle difficult and time-consuming tasks," including software engineering, a core area of interest for many top AI developers. Unlike Cursor's previous models, Grok 4.5 is designed to address a broader range of workloads, such as legal and financial services. The blog post also stated that Grok 4.5 has improved network security capabilities. Meta (META.US) invests billions to build its first data center in Canada, creating the largest overseas AI hub. Meta is investing approximately $10 billion in building its first data center in Canada to expand its infrastructure in support of its ambitions in the field of artificial intelligence. The data center is located in Sturgeon County, Alberta, and will have a capacity of 1 gigawatt (GW) of electricityequivalent to the power consumption of about 750,000 householdsand will mainly rely on natural gas generation for operation. The company is expanding its global footprint of data centers to ensure access to more computing capacity. The project in Alberta marks its 33rd data center. Meta plans to use this computing capacity for its own AI models and social media applications (including Instagram and Facebook), but is also exploring establishing cloud services to sell some of the capacity to other companies. Upcoming Important Economic Data and Events 8:30 PM Beijing time: Initial jobless claims in the US for the week ending July 4th 9:00 PM Beijing time: FOMC Permanent Voters, New York Fed Chair Williams delivers a speech Earnings Preview Pre-market on Friday: Delta Air Lines, Inc. (DAL.US)