U.S. Stock Outlook | Three Major Index Futures All Decline Ahead of U.S.-Ukraine Presidential Talks

Pre-Market Market Trends

1. As of August 18 (Monday), U.S. stock index futures are all down before the market opens. As of the time of writing, Dow futures are down 0.07%, S&P 500 futures are down 0.10%, and Nasdaq futures are down 0.13%.

1. As of the time of writing, the German DAX index is down 0.48%, the UK FTSE 100 index is down 0.07%, the French CAC40 index is down 0.81%, and the Euro Stoxx 50 index is down 0.65%.

1. As of the time of writing, WTI crude oil is up 0.45%, priced at $62.26 per barrel. Brent crude oil is up 0.30%, priced at $66.05 per barrel.

Market News

Powell's Jackson Hole closing speech, interest rate cut expectations and retail earnings will shape U.S. stock trends. In the coming week, investors will focus on Federal Reserve Chairman Powell's most important policy speech during his tenure at the Jackson Hole annual economic symposium on Friday. On the eve of Powell's (likely his last as Fed Chairman) speech, the market's expectation probability for at least a 25 basis point rate cut by the Fed next month has reached 85%. In terms of corporate earnings, retailers such as Walmart, Target, and Home Depot will release their earnings reports, providing investors with more information about the health of consumer spending. This week’s economic data is sparse, with initial jobless claims and the services activity index to be released on Thursday being the main highlights.

The world is watching! Countdown to the Jackson Hole annual meeting, Powell's speech may focus on five major themes. Powell will deliver a speech at 22:00 Beijing time on August 22, and he is likely to discuss high inflation, rising producer prices, and a weak job market. Based on his 2024 speech, he is unlikely to address White House or tariff policies, nor will he discuss the pressure from President Trump to resign.

U.S.-Ukraine presidential talks are imminent, and the EU is "grouping" to visit the U.S. Reports indicate that Trump will first meet with Ukrainian President Zelensky on the afternoon of August 18 local time, followed by a larger meeting with visiting European leaders to discuss the Ukraine crisis. Earlier on August 17, Trump posted that if Zelensky is willing, the Russia-Ukraine conflict could "almost immediately" end, claiming that Ukraine "cannot recover" Crimea and cannot join NATO. Media reports suggest that Trump's remarks indicate that Zelensky will face significant pressure during the meeting on the 18th Goldman Sachs warns: The "Goldilocks" market for U.S. stocks may end, and the risk of a pullback increases. After experiencing several months of an ideal market environment, Goldman Sachs has issued a warning that potential risks could trigger a sharp adjustment in the stock market. Currently, U.S. stocks continue to rebound supported by stable growth, moderate inflation, and a strong earnings season. Significant investments in the artificial intelligence sector and expectations of interest rate cuts have further boosted large technology stocks. Goldman Sachs points out that this "Goldilocks" state (economic growth neither overheating nor cooling) is often accompanied by low volatility and stable returns. However, the institution warns that if economic growth slows or the Federal Reserve shifts to a tightening policy, the current calm could quickly evolve into a market storm.

Divergence on Fed rate cuts intensifies: Bostic says there may be one cut this year, warns that tariff costs have been passed on to consumers. Atlanta Fed President Bostic stated that consumers are under greater pressure, and the costs brought by tariffs have become a reality. Bostic expressed his willingness to adjust interest rates as soon as possible but reminded officials to remain patient and wait for a clearer economic outlook. He added that as long as the labor market remains strong, he still believes there may be one rate cut this year, but he remains open on the specific timing. Regarding policy outlook, Bostic admitted that he finds it difficult to determine whether the impact of tariffs on prices is temporary or persistent, but he will continue to monitor policies and data, ready to adjust policies as needed.

U.S. Q2 earnings reports raise concerns? Goldman warns that 2026 profit margin forecasts may be overly optimistic. Despite U.S. companies exceeding expectations in their second-quarter earnings, Goldman Sachs warns that the market's general forecasts for profit margins in 2026 may be overly optimistic. Goldman’s chief U.S. equity strategist David Kostin noted that the S&P 500's earnings per share grew by 11% year-on-year, nearly three times the 4% increase previously predicted by analysts. Kostin stated that although the impact of tariffs has been weaker than expected so far, the implied "significant expansion" in the 2026 profit margin forecasts appears unrealistic—even if companies can continue to offset rising cost pressures. He expects analysts to lower their forecasts in the coming quarters, but the extent will not exceed long-term trend levels.

UBS warns: Removing Powell could trigger market risks. U.S. President Trump has repeatedly criticized the Federal Reserve for being too slow in its rate-cutting actions, raising concerns about the Fed's independence in the market. However, UBS believes that Trump is unlikely to take such a risk. The Fed's policies will still primarily be guided by labor market and inflation data. Based on this, UBS expects that by June 2026, the rate cut could reach 100 basis points. Additionally, UBS believes that concerns about the Fed's independence will not diminish the attractiveness of U.S. Treasury bonds and still considers high-quality bonds to have investment value.

Individual Stock News

Dayforce (DAY.US) may face privatization! Thoma Bravo acquisition talks have advanced to an in-depth stage. According to informed sources, private equity firm Thoma Bravo is in negotiations to acquire human resources management software provider Dayforce. The sources indicate that the acquirer plans to take Dayforce private, with the deal potentially being announced in the coming weeks. As a result of this news, Dayforce surged nearly 27% in pre-market trading on Monday Tesla (TSLA.US) rental prices in the UK have nearly halved! Sales plummet forcing a 40% channel discount. According to reports, the cost for UK owners to rent Tesla electric vehicles has dropped by nearly half compared to a year ago. The report indicates that to boost sales, Tesla has had to offer discounts of up to 40% to car rental companies. The report also reveals that the introduction of the discount strategy is due to a severe backlog of vehicles in Tesla's UK inventory. According to the latest data from the Society of Motor Manufacturers and Traders (SMMT), Tesla's sales in the UK fell by about 60% year-on-year in July, with only 987 units sold. During the same period, the overall new car registration in the UK decreased by about 5% year-on-year.

Google (GOOGL.US) fined $36 million by Australia for anti-competitive agreement with telecom companies. Google has agreed to pay AUD 55 million (approximately USD 35.8 million) in fines in Australia. Previously, Australian consumer regulators found that Google paid the country's two major telecom companies to pre-install Google's search application on Android phones, thereby excluding competing search engines and harming market competition.

Earnings Forecast

Tuesday morning: BHP (BHP.US), Agora (API.US)

Tuesday pre-market: Home Depot (HD.US), XPeng (XPEV.US)