U.S. Stock Market Preview | Three Major Index Futures All Decline, SK Hynix Faces Downgraded Earnings Expectations from Korean Securities Firms, Chip Stocks Drop Ahead of Market

Pre-Market Market Trends

1. On July 13 (Monday), U.S. stock index futures fell across the board before the market opened. As of the time of writing, Dow futures were down 0.10%, S&P 500 futures were down 0.37%, and Nasdaq futures were down 1.14%.

1. As of the time of writing, the German DAX index was down 0.05%, the UK FTSE 100 index was down 0.20%, the French CAC 40 index was up 0.01%, and the Euro Stoxx 50 index was down 0.14%.

1. As of the time of writing, WTI crude oil was up 4.09%, priced at $74.33 per barrel. Brent crude oil was up 4.18%, priced at $79.19 per barrel. Iranian Foreign Ministry spokesman Baghaei previously stated that the memorandum of understanding with the United States "has undoubtedly entered a crisis stage." Baghaei indicated that as long as the U.S. continues to violate its commitments, Iran will not adhere to the memorandum of understanding.

Market News

U.S. Stock "Super Week" Approaches: Earnings Season Meets Inflation Data, Middle East Conflicts Stir Markets, and Waller to Make His First Appearance on Capitol Hill. After a relatively calm week, the U.S. stock market is set for a busy week: the second-quarter earnings season officially kicks off, with several key economic data releases; meanwhile, the U.S. military has launched a new round of strikes against Iran, and geopolitical uncertainties continue to disrupt the market; newly appointed Federal Reserve Chairman Kevin Waller is also set to make his first trip to Capitol Hill since taking office this week. In terms of earnings, JPMorgan (JPM.US), Goldman Sachs (GS.US), Bank of America (BAC.US), Wells Fargo (WFC.US), and Citigroup (C.US) will all release their earnings on Tuesday, while Morgan Stanley (MS.US) and another financial services giant, BlackRock (BLK.US), will report on Wednesday. Additionally, Johnson & Johnson (JNJ.US), Kinder Morgan (KMI.US), and leading airline United Airlines (UAL.US) will announce their earnings on Wednesday, and global AI chip foundry leader Taiwan Semiconductor Manufacturing Company (TSM.US), streaming giant Netflix (NFLX.US), and healthcare leader UnitedHealth (UNH.US) will report 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 U.S. inflation, while the University of Michigan Consumer Sentiment Survey report will be released on Friday. Waller will also attend the semi-annual monetary policy hearing on Capitol Hill on Tuesday and Wednesday US Stock Q2 Earnings Season Approaches: Profit Expectations Surge to Strongest Level in Post-Pandemic Era, Market Faces "Most Severe Test in History." As major Wall Street banks release their earnings this week, the US stock market is about to enter the second quarter earnings season. However, unlike previous years, this earnings season faces extremely high performance expectations—companies in the S&P 500 index are expected to record over 23% profit growth, marking the strongest level since the post-pandemic recovery. Against the backdrop of stock indices nearing historical highs, the unusually steep profit "passing line" means that the margin for error is rapidly shrinking, and any slight disturbance could trigger severe volatility. According to LSEG IBES aggregated analyst forecast data, overall earnings for the S&P 500 in Q2 are expected to grow by 23.4% year-on-year, significantly revised up from the 15.2% forecast at the beginning of the year.

New Federal Reserve Chair Waller Faces Congressional Test: Will "Less Talk, More Action" Work? Inflation and Independence Become Focus of Inquiry. In his first month as Federal Reserve Chair, Kevin Waller has made it clear that when expressing his views on the economy, less is more. In fact, Waller has largely remained silent on relevant market issues. However, this week, as Waller testifies before Congress for the first time as Fed Chair, he will face a group of legislators eager for answers. This hearing is part of the semi-annual monetary policy report that the Federal Reserve Chair is required by law to attend twice a year. The Federal Reserve submitted this official report to Congress last Friday (July 10), in which decision-makers reiterated the Fed's firm stance—"the committee will achieve price stability," vowing to bring the inflation rate back to the target level of 2%.

Rumors of "Major Maneuver" in Japanese Pensions Denied by Insiders. According to informed sources discussing within the Japanese government, there are currently no immediate plans to adjust the target asset allocation of the national pension fund, but there may be a shift towards directing more funds into domestic assets within the current allowable range. Japanese Finance Minister Shunichi Suzuki stated last Friday that the government will explore ways to encourage various pension funds, including the world's largest pension fund—the Government Pension Investment Fund (GPIF), to "significantly increase investments in Japanese financial assets." This statement at the time led to a rise in the yen and Japanese government bonds, with the market anticipating that trillions of dollars could flow into the Japanese market through GPIF. However, two government sources revealed that while the government is studying how to increase such investments within the existing benchmark portfolio, this move will not immediately trigger a revision of GPIF's medium-term targets. One source stated, "The market's reaction far exceeded our expectations," while acknowledging that Suzuki's remarks do not imply a change in the asset allocation structure.

Will Bond Market Turmoil Trigger the Next Financial Tsunami? Wall Street Bear Peter Schiff Warns: US Debt Pressure Escalates, Stock Market and Crypto Space Will Suffer "Bloodbath." As global investors closely monitor the extreme volatility of risk assets, renowned pessimistic economist Peter Schiff recently issued a stern warning: the next global financial tsunami will not originate from turmoil in the cryptocurrency market, but rather from the seemingly calm US Treasury market This well-known investor, who has been bullish on gold for a long time, candidly stated in his latest podcast that the collapse of the U.S. Treasury market could trigger a chain reaction affecting the stock market, real estate, and even cryptocurrencies. He expects that as various risk assets decline simultaneously, investors will eventually withdraw from these areas and turn to gold for safety.

AI giants start a price war! OpenAI, Meta (META.US), and SpaceXAI collectively launch low-cost models. In the past week, the global AI industry has experienced a rare peak of "price wars." OpenAI, Elon Musk's SpaceXAI, 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 costs are. From GPT-5.6 to Grok 4.5, and then to Meta Muse Spark 1.1, the three major players have coincidentally made "cost efficiency" the core narrative.

OPEC maintains global economic growth forecasts for this and next year, while lowering oil demand growth expectations for 2026. On July 13, the Organization of the Petroleum Exporting Countries (OPEC) maintained its global economic growth forecasts for 2026 and 2027 at 3.1% and 3.2%, respectively, in its latest monthly crude oil market report. Meanwhile, OPEC slightly lowered its global oil demand growth forecast for 2026 to 800,000 barrels per day, describing this as a minor adjustment from last month's prediction; it expects global oil demand to grow by 1.9 million barrels per day in 2027, which is an upward adjustment from last month's forecast.

Individual Stock News

The reason for SK Hynix (SKHY.US) plummeting 15% has been found? Korean brokerage says Q2 earnings may be "below expectations." On Monday, shares of South Korean memory chip giant SK Hynix fell more than 15%, dragging the South Korean stock market back to a circuit breaker and collapsing Asian memory stocks. A report released today by local Korean brokerage 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 would be slightly below market expectations. Although KIS's forecast for SK Hynix's second-quarter performance is quite bright, the operating profit forecast it provided is about 8% lower than the market consensus expectation of 65 trillion Korean won. This ignited investor concerns. KIS explained in the report that due to SK Hynix's high revenue share from HBM, its average selling price (ASP) increase is lower than the market average. The reason behind this is that HBM prices are usually locked in by long-term supply agreements, so they do not fluctuate significantly with market prices in the short term. In contrast, when the overall market price rises, the average selling price increase for traditional DRAM and NAND products is greater.

U.S. chip stocks fall before the market opens. On Monday, before the U.S. market opened, SK Hynix fell about 9%, while last Friday the stock made a stunning debut in the U.S. market, soaring 13%. Another memory chip giant, Micron Technology (MU.US), fell 5%, and flash memory supplier SanDisk (SNDK.US) dropped nearly 6%. Additionally, stocks closely related to the AI supply chain, such as AMD (AMD.US), Intel (INTC.US), Lumentum (LITE.US), Marvell Technology (MRVL.US), and Western Digital (WDC.US), also saw declines Also generally declined in pre-market trading on Monday.

Intel invests $5.7 billion to expand its manufacturing plant in Ireland. Intel plans to invest $5.7 billion to significantly enhance the production capacity of its facility in Leixlip, Ireland, located about 12 miles west of Dublin. This investment will enable the plant to scale up production of Intel's Xeon 6 server processors and future generations of processors designed for high-density cloud and network, artificial intelligence, and enterprise workloads.

Fleeing the AI arms race storm! Wall Street funds flock to "King of Cash," Apple (AAPL.US) surges $600 billion in market value in 20 days. As concerns over AI spending weighed on chip manufacturers and cloud computing giants' stocks, investors are increasingly turning back to Apple. The iPhone maker's stock plummeted last month due to a disappointing future AI feature demonstration, but has rebounded 15% since hitting a low on June 25, adding nearly $600 billion in market value and pushing the stock back into historical high territory. During the same period, the Philadelphia Semiconductor Index fell 7%, the S&P 500 rose 3%, while the tech-heavy Nasdaq 100 index only increased by 1.3%. The stock's reversal reflects growing market unease over whether high AI spending will yield returns, and Apple's decision not to participate in the data center arms race is increasingly seen as an asset rather than a liability, despite its AI product launches repeatedly frustrating investors.

Meta's total investment in Louisiana data center will exceed $250 billion. Meta Platforms has committed an additional $40 billion investment to its large data center campus in Louisiana, USA, as the company continues to expand its artificial intelligence computing footprint, bringing the project's expected total investment to over $250 billion. Meta announced on Monday that it will expand its data center project in rural Louisiana to at least 5 gigawatts (GW) of computing capacity, with a total investment reaching $50 billion. Previously, the company announced a $10 billion investment to build the data center and surrounding community. Reports in May indicated that Meta planned to invest an additional $200 billion in the project, primarily for the procurement of high-cost computing chips to be installed in the nearly 4,000-acre campus. According to a source familiar with the matter, this will bring the project's expected total investment to at least $250 billion. To date, Meta has not disclosed any specific expenditures for the project beyond this $50 billion.

AI orders remain strong! TSMC (TSM.US) June revenue surged 67.9% year-on-year, advanced packaging expansion continues. TSMC reported on Monday that its sales in June increased by 67.9% year-on-year, and the company will release its second-quarter financial report later this week. In the first half of 2026, TSMC's total revenue reached NT$2.4 trillion (approximately $74.99 billion), a 35.6% increase compared to the same period in 2025. TSMC reported June revenue of NT$442.68 billion, a 6.2% increase from the previous month. Additionally, TSMC will add three advanced packaging factories in the second phase of its Chiayi Science Park construction plan in southern Taiwan The individual stated that the approximately 90-hectare park will develop into an advanced packaging industry cluster led by TSMC. Reports indicate that the two advanced packaging factories planned in the first phase began mass production last month. He mentioned that once all four factories are operational, the Chiayi Science Park is expected to generate an annual output value of over NT$300 billion (approximately US$9.35 billion) and create over 9,000 job opportunities.

AI demand spreads to mature processes, TSMC plans to raise prices, expected to take effect in January next year. According to reports, TSMC plans to raise prices for mature processes, with multiple IC design companies revealing that they have received notifications from TSMC. As for the extent of the price increase, it varies by company and product line and will be finalized in the fourth quarter, with an expected increase of about single-digit percentages. This is the first price increase for mature process quotes by TSMC in over three years. Previously, due to overwhelming orders for advanced processes, several advanced process nodes (covering cutting-edge nodes such as 3nm and 5nm) had their prices raised, with increases reaching up to 15%, and may further rise by 5% to 10% next year.

SpaceX (SPCX.US) stock price has fallen nearly 30% from its peak, veteran investor harshly comments: the unlocking wave is coming, only worth $30 per share. SpaceX's stock price has dropped about 28% from its post-IPO closing peak of over $200. Veteran investor George Noble has once again issued a bearish outlook and warned that the stock will face pressure from insiders' concentrated sell-offs in the coming months. Noble, who was involved in founding Fidelity Overseas Fund, pointed out that SpaceX's valuation is severely disconnected from its fundamentals. He also believes that the initial rise in the stock price after its listing was not driven by fundamentals but rather by what he calls "artificial short squeezes." However, Noble predicts that this pattern is about to reverse. He noted that the company's disclosed lock-up arrangements show that insider shares will be unlocked in batches—starting after the second quarter earnings report and continuing until the end of the year, with the final batch scheduled for release 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 the disclosed unlocking timeline. Noble stated that Starlink is the only consistently profitable business for SpaceX, but this alone is insufficient to support the company's current market value. He estimates SpaceX's reasonable valuation to be around $30 per share and describes the company as "the most severe large-cap stock valuation bubble I have ever seen."

Important Economic Data and Event Forecasts

Beijing time 23:00: U.S. June New York Fed 1-year inflation expectations.

Beijing time the next day 00:30: Federal Reserve Governor Waller speaks.

Earnings Forecast

Tuesday pre-market: Ericsson (ERIC.US), JP Morgan, Bank of America, Goldman Sachs, Wells Fargo, Citigroup