Preview of US Stock Market | Three major stock index futures fell together, SK Hynix (SKHY.US) was downgraded in profit expectations by South Korean securities firms, and chip stocks fell in pre-market trading.

Pre-market Market Trends 1. On July 13 (Monday), pre-market trading for the US stock market saw futures for the three major stock indexes in the US all fall. As of press time, Dow Jones futures dropped 0.10%, S&P 500 index futures fell 0.37%, and Nasdaq futures declined 1.14%. 2. As of press time, the Germany DAX index dropped 0.05%, the UK FTSE 100 index fell 0.20%, the France CAC40 index rose 0.01%, and the Euro Stoxx 50 index declined 0.14%. 3. As of press time, WTI crude oil rose 4.09% to $74.33 per barrel. Brent crude oil also rose 4.18% to $79.19 per barrel. Iranian Foreign Ministry spokesman Baghaei previously stated that the understanding memorandum with the United States "has undoubtedly entered a crisis stage." Baghaei stated that as long as the US continues to violate commitments, Iran will not comply with the memorandum. Market News The US stock market's "super week" is coming: the earnings season meets inflation data, turmoil in the Middle East stir the market, and Powell will make his first visit to Capitol Hill. After a relatively calm week last week, the US stock market will have a busy week ahead: the second quarter earnings season officially begins, with multiple key economic data being released. At the same time, the US military launches a new round of attacks on Iran, GEO Group Inc's political uncertainty continues to disturb the market, and new Fed Chairman Kevin Powell is about to have his first trip to Capitol Hill since taking office. In terms of earnings, JPMorgan Chase, Goldman Sachs Group, Bank of America Corp, Wells Fargo & Company, and Citigroup Inc. all released their earnings on Tuesday, Morgan Stanley and another financial services giant BlackRock, Inc. will release earnings on Wednesday, while Johnson & Johnson, Kinder Morgan, and the leading airline company United Airlines Holdings, Inc. will announce earnings on Wednesday as well. Global AI chip manufacturing leader Taiwan Semiconductor Manufacturing Co., Ltd., streaming giant Netflix, and healthcare industry leader UnitedHealth Group Incorporated will announce their results on Thursday. In terms of economic data, the consumer price index released on Tuesday and the producer price index released on Wednesday will provide investors with the latest data on US inflation conditions, while the University of Michigan Consumer Confidence Survey report will be released on Friday. In addition, Powell will attend the semi-annual monetary policy hearing in Congress on Tuesday and Wednesday. The US Q2 earnings season is approaching: earnings expectations soar to the highest levels since the post-epidemic era, and the market is about to face the "most severe test in history." With major Wall Street banks first handing in their report cards this week, the US stock market is about to enter the second quarter earnings season. However, unlike previous years, this earnings season is facing extremely high earnings expectations - S&P 500 index companies are expected to record earnings growth of more than 23%, reaching the strongest level since the post-epidemic recovery. Against the backdrop of stock indices nearing historical highs, the unusually steep "passing line" for profits means that the margin of error is rapidly shrinking, and any move could trigger significant volatility. According to LSEG IBES' summary analysis of analyst forecasts, overall earnings growth for the S&P 500 index in Q2 is expected to be 23.4%, which is significantly higher than the initial forecast of 15.2% at the beginning of the year. New Fed Chairman Powell faces his first major test in Congress: will "actions speak louder than words"? Inflation and independence are the focus of questioning. In the first month of Kevin Powell's tenure as Fed Chairman, he has already made his views clear: when expressing his views on the economy, less is more. In fact, Powell has largely remained silent on relevant market topics. However, this week, as Powell testifies before Congress for the first time as Fed Chairman, he will face a group of legislators seeking answers. This hearing is a legal requirement for the Fed Chairman to appear twice a year for the semi-annual monetary policy report hearing. The Fed submitted this official report to Congress last Friday (July 10), in which policymakers reiterated the Fed's tough stance - "the committee will achieve price stability" and vowed to push inflation back to the 2% target level. Rumors of a major shift in the Japanese pension fund are debunked by insiders. Insiders familiar with discussions within the Japanese government revealed that there are no immediate plans to adjust the target asset allocation of the national pension fund. However, it may redirect more funds to domestic assets within the current allowable range. Japanese Finance Minister Kokugatsu Katayama said last Friday that the government will explore how to encourage various pension funds, including the Government Pension Investment Fund (GPIF), the world's largest pension fund, to "significantly increase investment in Japanese financial assets." These comments led to an increase in the value of the yen and Japanese government bonds at the time, as the market speculated that tens of trillions of dollars could flow into the Japanese market through GPIF. However, two government sources revealed that although the government is studying how to increase such investments within the current benchmark portfolio range, this measure will not immediately trigger a revision of the mid-term target for the GPIF. One source said, "The market's reaction far exceeded our expectations," while also admitting that Katayama's remarks do not imply a change in the asset allocation structure. Will the bond market explosion trigger the next financial tsunami? Wall Street bear Peter Schiff warns: US bond pressure intensifies, stock markets and cryptocurrencies will suffer "bloodbath". As global investors closely monitor the volatile movements of risk assets, well-known pessimistic economist Peter Schiff recently issued a severe warning: the source of the next global financial tsunami will not be the volatility of the cryptocurrency market, but the seemingly calm US bond market. This well-known investor, who has long been bullish on gold, boldly stated in his latest podcast that the unraveling of the US bond market could trigger a chain reaction, impacting stock markets, real estate, and even cryptocurrencies. He predicts that as various risk assets simultaneously decline, investors will eventually flee these areas and turn to gold for safety. AI giants start a price war! OpenAI, Meta, and SpaceXAI collectively launch low-cost models. In the past week, the global AI industry has seen a rare climax of a "price war". OpenAI, SpaceXAI by Elon Musk, and Meta Platforms have successively released new generations of AI models - their common selling point is not how powerful the functions are, but how low the fees are. From GPT-5.6 to Grok 4.5, and to Meta Muse Spark 1.1, the three major players coincidentally emphasize "cost efficiency" as a core narrative. OPEC maintains global economic growth forecasts for the next two years, reduces 2026 oil demand growth expectations. On July 13, the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecasts for global economic growth in 2026 and 2027 at 3.1% and 3.2%, respectively, in its latest monthly crude oil market report. At the same time, OPEC has slightly reduced its forecast for global oil demand growth in 2026 to 800,000 barrels per day, citing a slight adjustment from its previous month's forecast; it is expected that global oil demand in 2027 will grow by 1.9 million barrels per day, an increase from the previous estimate. Stock News SK Hynix (SKHY.US) plunges 15%, as South Korean brokerage firms forecast Q2 profits to be "below expectations". On Monday, the share price of South Korean storage chip giant SK Hynix fell over 15%, dragging the South Korean stock market down to a circuit breaker once again and causing a collapse in Asian storage-related stocks. A report released by South Korean brokerage firm Korea Investment Securities (KIS) is seen as the trigger for SK Hynix's stock price drop. KIS predicted in its latest report that SK Hynix's operating profit for the second quarter of this year will be slightly below market expectations. While KIS's forecast for SK Hynix's second-quarter performance was fairly strong, the brokerage's operating profit forecast was about 8% lower than the market consensus forecast of 6.5 trillion won. This ignited investors' worries. KIS explained in the report that SK Hynix's revenue from HBM is higher than its competitors, and the rise in its average selling price (ASP) is lower than the market average. The reason behind this is that HBM usually locks in prices through long-term supply agreements and does not fluctuate significantly with market conditions in the short term. In contrast, when the market as a whole raises prices, the average selling price of products such as traditional DRAM and NAND increases more. Pre-market trading for US chip stocks sees a general decline. On Monday, pre-market trading for US stocks saw SK Hynix fall by about 9%, while the stock had a stunning debut in the US market last Friday, soaring by 13%. Another storage chip giant, Micron Technology, Inc., fell by 5%, and flash product supplier SanDisk dropped nearly 6%. Additionally, AMD, Intel Corporation, Lumentum, Marvell Technology, Inc., and Western Digital Corporation, which are closely linked to the AI industry chain, also saw a general decline in pre-market trading on Monday. Intel Corporation to invest $5.7 billion to expand its manufacturing facility in Ireland. Intel Corporation plans to invest $5.7 billion to significantly increase production capacity at its Leixlip facility in Ireland. The facility is located approximately 12 miles west of Dublin. This investment will allow the factory to expand the production scale of Intel Corporation's Xeon 6 server processors and future generations of processors designed for high-density cloud and networking, artificial intelligence, and enterprise workloads. Escaping the storm of the AI arms race! Wall Street funds flock to the "cash king," Apple Inc., which has surged $600 billion in market value in 20 days. Concerns about AI expenditures causing the stocks of chip manufacturers and cloud computing giants to decline have prompted investors to once again turn to Apple Inc. This iPhone manufacturer's stock price incurred a significant drop last month due to a disappointing future AI feature demonstration, but has since rebounded by 15% since hitting bottom on June 25, increasing the market value by nearly $600 billion and pushing the stock price back into the historical high territory. During the same period, the Philadelphia Semiconductor Index fell by 7%, the S&P 500 Index rose by 3%, and the Nasdaq 100 Index, dominated by tech stocks, only rose by 1.3%. The reversal of this stock reflects the market's growing unease about the returns from high AI spending, and Apple Inc.'s decision to not participate in the data center arms race is increasingly seen as an asset rather than a liability, despite the frustration felt by investors with their AI products. Meta's total investment in the Louisiana data center will exceed $250 billion. Meta Platforms has pledged to invest an additional $40 billion in its large data center complex in Louisiana, with the estimated total investment for the project surpassing $250 billion as the company continues to expand its AI computing infrastructure. Meta announced on Monday that it will expand the data center project in a rural area of Louisiana to at least 5 gigawatts (GW) of computing capacity, with a total investment of $50 billion. Earlier, the company had announced a $10 billion investment to build the data center and surrounding community. In May of this year, reports indicated that Meta plans to invest an additional $200 billion in the project, mainly to procure high-cost computing chips to be installed in the nearly 4,000-acre site. According to an insider, this will bring the expected total investment for the project to at least $250 billion. Meta has yet to disclose any specific expenses for this project beyond the $50 billion. Strong demand for AI spreads to mature processes, Taiwan Semiconductor Manufacturing Co., Ltd. (TSM.US) plans to raise prices, expected to take effect in January next year. Taiwan Semiconductor Manufacturing Co., Ltd. is planning to raise prices for mature processes, with several IC design companies revealing that they have received notifications from the company. The extent of the price increase, ranging from single-digit percentages for various product lines and companies, will be finalized in the fourth quarter and expected to take effect in January next year. The estimated increase is around single-digit percentages. This is the first time in over three years that Taiwan Semiconductor Manufacturing Co., Ltd. has adjusted its prices for mature processes, as high demand for advanced processes has led to price increases in multiple advanced process nodes (including cutting-edge nodes like 3nm and 5nm), with price hikes of up to 15%; additional increases of 5% to 10% expected next year. SpaceX (SPCX.US) stock price drops nearly 30% from its peak, veteran investor gives a harsh review: a flood of unlocks is imminent, worth only $30 per share. The stock price of SpaceX has fallen by about 28% from its closing peak of over $200 after its IPO, veteran investor George Noble has once again issued a bearish view and warned that the stock will face pressure from concentrated insider selling in the coming months. Noble, who participated in the founding of Fidelity Overseas Fund, pointed out that SpaceX's valuation is significantly disconnected from its fundamentals. He also believes that the initial rise in the stock price was not driven by fundamentals but rather by what he calls "artificially squeezing shorts." But Noble believes that this situation is about to reverse. He noted that the disclosed lock-up arrangement shows that insider shares will be released in batches - starting after the release of the second-quarter earnings report and continuing until the end of the year, with the final round scheduled to be unlocked in June 2027. He believes that the main catalyst for the stock price in the coming months will not be the company's fundamentals, but rather the disclosed unlocking schedule. Noble estimates that SpaceX's reasonable valuation is around $30 per share and describes the company as "the most severe overvaluation of a large cap stock I've ever seen." Important Economic Data and Events Forecast At 23:00 Beijing time: The 1-year inflation expectations of the New York Fed for June in the United States. At 00:30 the next day Beijing time: Speech by Federal Reserve Governor Waller. Earnings Forecast Tuesday pre-market: Telefonaktiebolaget LM Ericsson Sponsored ADR Class B, JPMorgan Chase, Bank of America Corp, Goldman Sachs Group, Wells Fargo & Company, Citigroup.