Overnight US stocks | The price of crude oil and cotton surged by over 9%, while the three major indexes fell. SanDisk (SNDK.US) dropped by over 12%.

On Monday, the three major indexes fell. Crude oil prices surged as the US military announced strikes against Iran for the third consecutive night. With tensions between the US and Iran escalating again in the Persian Gulf, President Trump stated that he would give a speech on Thursday evening at 9 pm (9 am on Friday Beijing time). Trump did not specify the content of the speech, but this statement indicated that the war with Iran is actually accelerating again, despite both sides being supposed to enter negotiations after the signing of the memorandum of understanding. [US Stocks] At the close, the Dow Jones Industrial Average fell by 138.37 points, a decrease of 0.26%, to 52498.64 points; the Nasdaq fell by 408.43 points, a decrease of 1.55%, to 25873.18 points; the S&P 500 index fell by 60.05 points, a decrease of 0.79%, to 7515.34 points. Micron Technology, Inc. (MU.US) dropped by 4.3%, NVIDIA Corporation (NVDA.US) fell by 3.5%, Intel Corporation (INTC.US) fell by 6%, and SanDisk (SNDK.US) plummeted by over 12%. The Nasdaq Golden Dragon Index closed down by 0.14%, with NTES (NTES.US) and JD.com, Inc. Sponsored ADR Class A (JD.US) rising by over 2%. [European Stocks] The Germany DAX30 index rose by 22.95 points, an increase of 0.09%, to 25108.37 points; the UK FTSE 100 index fell by 5.86 points, a decrease of 0.06%, to 10491.43 points; the France CAC40 index rose by 25.68 points, an increase of 0.31%, to 8364.65 points; the Euro Stoxx 50 index fell by 1.51 points, a decrease of 0.02%, to 6268.46 points; the Spain IBEX35 index fell by 59.80 points, a decrease of 0.31%, to 19324.90 points; the Italy FTSE MIB index rose by 188.33 points, an increase of 0.36%, to 52802.50 points. [Asian Stock Markets] The Nikkei 225 index fell by 1.92%, and the South Korea Composite Stock Price Index fell by 8.95%. [US Dollar Index] The US dollar index, which measures the dollar against six major currencies, rose by 0.28% on that day, closing at 101.235 in the forex market. At the end of the New York forex market, 1 euro was exchanged for 1.1387 US dollars, lower than 1.1416 US dollars on the previous trading day; 1 pound sterling was exchanged for 1.3360 US dollars, lower than 1.3398 US dollars on the previous trading day. 1 US dollar was exchanged for 162.36 Japanese yen, higher than 161.69 Japanese yen on the previous trading day; 1 US dollar was exchanged for 0.8141 Swiss francs, higher than 0.8085 Swiss francs on the previous trading day; 1 US dollar was exchanged for 1.4151 Canadian dollars, lower than 1.4152 Canadian dollars on the previous trading day; 1 US dollar was exchanged for 9.7079 Swedish kronor, higher than 9.6638 Swedish kronor on the previous trading day. [Cryptocurrency] Bitcoin briefly fell below $62,000, dropping by 2.9% to $62,032 at the time of writing; Ethereum fell by over 2%, to $1762.28. [Crude Oil] The light crude oil futures price for August delivery on the New York Mercantile Exchange rose by $6.73, closing at $78.14 per barrel, an increase of 9.42%; the Brent crude oil futures price for September delivery rose by $7.29, closing at $83.30 per barrel, an increase of 9.59%. [Precious Metals] Spot gold briefly fell below $4,000, closing down by 2.86% at $4002.19 per ounce; spot silver traded at $57.65 per ounce. [Macro News] Volcker set the tone for CPI on Tuesday: If inflation heats up, it will support recent rate hikes. Federal Reserve Board Member Volcker stated on Monday that if future data shows that the inflation rate remains significantly above the 2% target, the Federal Reserve may need to raise interest rates "shortly." He stated that current monetary policy is at a "crossroads." Volcker said that the direction would depend on new information such as the CPI report released on Tuesday. If the data trend changes unfavorably, he said the Fed should not "slack off" at this stage. Volcker said, "With the current policy level, inflation may gradually fall back to the 2% target. But I am equally concerned that future data over the next few weeks will show that inflation will remain at a high level or even continue to rise, which would require a tighter monetary policy in the short term." He specifically expressed concern that recent inflation reports indicate that price pressures seem to be expanding throughout the entire economy, beyond the effects of last year's import tariff increases or recent energy cost hikes, reflecting a more widespread systemic inflation that would require a more stringent monetary policy. Volcker said, "If core inflation remains hot again this week, the FOMC will have to consider tightening monetary policy in the short term. It will take months to see inflation data continue to decline before we can say that inflation is moving in the right direction." Media: Trump has informed Congress of the resumption of war with Iran. According to reports, US President Trump has formally informed Congress of the resumption of hostilities with Iran. The report stated that the newspaper obtained a letter from Trump to congressional leaders on the 10th, in which he wrote that the US military conducted "defensive strikes" against targets inside Iran on the 7th. The report pointed out that this letter reignited the dispute between Congress and the White House, despite both the Senate and the House of Representatives previously voting to require the president to end the war or seek approval before continuing actions, the White House insisted that Trump, as commander-in-chief of the armed forces, was within his constitutional authority. Earlier, the US Senate passed a resolution on June 23 to limit the president's power to wage war, requiring President Trump to end military action against Iran and obtain congressional authorization before taking future military action against Iran. The resolution had previously been passed by the House of Representatives. The US will block Iranian ports from 4 am on the 15th. On the 13th local time, the Joint Maritime Information Center (JMIC) led by the US Navy stated that the US military would begin a maritime blockade of all Iranian ports and coastal areas starting at 20:00 Greenwich Mean Time on July 14 (04:00 on July 15 Beijing time). The blockade will apply to all vessels, regardless of their flag. The blockade covers the entire Iranian coastline, including but not limited to Iranian ports and oil terminals. The blockade will not hinder the transit of neutral vessels through the Strait of Hormuz to and from non-Iranian destinations. The transport of humanitarian supplies will be allowed passage but must undergo inspection. Goldman Sachs Group, Inc.: Profit growth remains the DRIVE for US stocks, but rate hikes by the Federal Reserve will have an impact from three aspects. Analysts from Goldman Sachs Group, Inc. stated that even if the Federal Reserve's more hawkish stance continues to pose risks to the stock market, profit growth may still be the main DRIVE for the US stock market. Goldman Sachs Group, Inc. expects the Federal Reserve to maintain interest rates this year, but sees the likelihood of rate hikes at 25%. Goldman Sachs Group, Inc. stated that a resumption of rate hikes by the Federal Reserve may impact the stock market in three ways. First, higher rates could weaken prospects for economic growth, and historically, economic growth has typically had a more significant impact on stock market performance than the rates themselves. Secondly, the current investment cycle driven by AI has an unusually high capital intensity, making companies more sensitive to higher financing costs. Additionally, past tightening cycles by the Federal Reserve have often been accompanied by periods of weak stock market returns. Goldman Sachs Group, Inc. analysts stated, "Regardless of whether the Fed raises rates, the uncertainty surrounding the Fed's policy path will increase the risk of interest rate volatility, which will also act as a headwind for the stock market." Apollo warns of the vulnerability of the US dollar in an AI correction. Tosten Slok, chief economist at Apollo Global Management Inc., stated that if there is further selling of AI tech stocks, the recent rally of the US dollar may face risks. Slok pointed out that international investors actively positioning in AI themes have driven record rolling net inflows into the US stock market over the past 12 months. However, most of these investors have not hedged against foreign exchange risks. "Therefore, if AI disappointments lead to a decline in capital inflows, there could be significant downside risks for the US dollar." This means that the US dollar is actually "dependent on AI trading." The AI frenzy and subsequent record highs in the US stock market have attracted a large amount of overseas capital inflow. Before purchasing US stocks, overseas investors need to convert their currency into dollars, providing crucial support for the US dollar. Meanwhile, compared to other major economies, US interest rates remain high, making the cost of purchasing rate-hedging tools against currency risks for the US dollar too expensive, thus making the US dollar more susceptible to stock market volatility. He said that if investors lose confidence in AI trading and begin selling stocks, the US dollar may also fall in response. [Company News] Intel Corporation to invest 50 billion euros to expand its factory in Ireland. Intel Corporation(INTC.US) will invest 50 billion euros (approximately 57 billion US dollars) to expand its factory located in Ireland, in an attempt to regain a dominant position in the manufacturing sector amid the artificial intelligence trend. In a statement, Intel Corporation stated that this investment will expand its capacity at the Leixlip campus in the outskirts of Dublin as part of the company's plan to increase the production capacity of data center processors. The expansion project will increase the production capacity of products, including flagship Xeon server processors, as well as advance research and development activities. Naga Chandrasekaran, Executive Vice President of Intel Corporation, stated in a statement that this move is also part of the company's plan to enhance its delivery capabilities for its foundry business customers. Intel Corporation's foundry business primarily produces chips for other tech companies and is an important part of the company's revitalization strategy to compete with rivals like Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. Meta adds an additional $400 billion investment to its largest data center project. Tech giant Meta(META.US) announced that it will invest an additional $400 billion to expand the scale of its data center in Louisiana, bringing its computing capacity to 5 gigawatts (GW). Meta stated in a press release that the latest announced data center expansion project will involve an investment of over $50 billion locally. Earlier, the company had announced an investment of $10 billion for the data center and the surrounding community. The data center located in Richland Parish, Louisiana, is Meta's largest and most ambitious project to date. Two months ago, there were reports that Meta planned to invest around $200 billion on top of the $100 billion investment, mainly for purchasing and deploying high-end AI computing chips in the park. Sources revealed that the latest statement from Meta indicates that the total investment for this project is expected to reach at least $250 billion. [Major Bank Ratings] UBS Group AG: Lowered the target price for Alphabet (GOOG.US) from $410 to $400; lowered the target price for Meta Platforms (META.US) from $865 to $766; raised the target price for Intel Corporation (INTC.US) from $83 to $121. Bank of America: Raised the target price for AMD (AMD.US) from $550 to $620.