U.S. Stock Market Outlook | Three Major Index Futures Decline Together, Panic Index Soars, Federal Reserve Officials Intensively "Dovish"

Pre-Market Market Trends

1. As of July 17 (Friday), U.S. stock index futures are all down before the market opens. As of the time of writing, Dow futures are down 0.56%, S&P 500 futures are down 0.84%, and Nasdaq futures are down 1.79%.

1. As of the time of writing, the German DAX index is down 0.38%, the UK FTSE 100 index is down 0.08%, the French CAC40 index is down 0.70%, and the Euro Stoxx 50 index is down 1.00%.

1. As of the time of writing, WTI crude oil is up 2.44%, priced at $80.88 per barrel. Brent crude oil is up 2.17%, priced at $86.06 per barrel.

Market News

Nasdaq futures plunge, chip sector's decline spreads globally. On Friday, Nasdaq 100 futures plummeted, and the global chip stock sell-off continued to accelerate. Meanwhile, the VIX, a measure of market volatility, reached a new high not seen in over a week. Traders are fleeing positions in stocks that have driven this year's market rally but are now increasingly overvalued. Chip manufacturers are facing growing scrutiny: whether the massive gains driven by AI infrastructure development have gone too far to support current high valuations. The core issue is whether the hundreds of billions of dollars invested by AI giants will ultimately yield substantial returns and maintain strong demand for chips. Renewed attacks and counterattacks in the Middle East have also dampened market sentiment.

Inflation concerns resurface, Fed officials intensify hawkish stance. As the labor market shows more signs of stability, the focus of discussions among Federal Reserve officials has shifted to inflation issues. The pressure from tariffs has eased, but energy prices affected by the situation in the Middle East remain a concern. Meanwhile, the market demand driven by AI development has become a new focal point. Federal Reserve Vice Chairman Philip Jefferson stated on Thursday that if inflation does not cool down quickly, the Fed should consider raising interest rates, although he also noted that the current monetary policy situation is good. Jefferson further mentioned that the implementation of artificial intelligence (AI) combined with energy disruptions from the Iran conflict puts the Fed's policy in a difficult balancing act. On the same day, two other Fed officials expressed stronger concerns about rising prices. Lori Logan, the Dallas Fed President and a voting member of the FOMC in 2026, became the first Fed official to call for a rate hike, stating that inflation does not seem to be returning sustainably to the Fed's 2% target level. Kansas City Fed President Jeff Schmid expressed that inflation is currently his biggest concern, given that inflation risks may further escalate in the coming months Despite the better-than-expected U.S. inflation data for June, Schmid warned that it is too early to determine a downward trend in inflation.

"The best-informed people about the company" are accelerating their exit: U.S. executives cashed out $77.6 billion in the first half of the year, marking the second-fastest record in over twenty years. In the first half of this year, U.S. corporate executives sold shares at the second-fastest pace in over two decades. For some investors, this is a classic danger signal—because it means that those who know the company best are feeling uneasy about the market outlook. According to EPFR Global market intelligence data, insiders at U.S. companies sold a total of $77.6 billion in stocks in the first half of 2026, a 20% increase compared to the same period last year. This wave of selling is only second to 2021—when the market was flooded with funds due to pandemic stimulus policies. In stark contrast, insider buying of stocks has remained sluggish. In the first half of the year, they purchased only $6.9 billion worth of stocks, slightly above the seven-year low of $6.7 billion set in the same period last year.

Escalation of U.S.-Iran mutual attacks, sharp decline in traffic through the Strait of Hormuz, multiple Gulf countries drawn into the conflict. The military confrontation between the U.S. and Iran has significantly intensified, with the U.S. expanding airstrikes on key Iranian infrastructure, while Tehran has launched missiles and drones at several U.S. ally countries in the Gulf in response, with the spillover effects of the conflict accelerating. The latest round of strikes has affected bridges, military facilities, and important infrastructure near the Strait of Hormuz, which is one of the busiest oil transport routes in the world, leading to a sharp deterioration in navigational safety and a significant decline in commercial shipping traffic. Iran's retaliation targets include U.S.-related facilities in Bahrain, Kuwait, Qatar, and Jordan, with regional tensions escalating comprehensively, and multiple governments entering a state of high alert, fearing further spread of the conflict. The prospects for diplomatic breakthroughs have dimmed again, as both sides continue to carry out retaliatory actions, with disruptions to energy supply chains and high risks of oil price fluctuations, putting the overall stability of the Gulf region under severe test.

Following the finance minister, the prime minister speaks out! Prime Minister Kishi Nobuo emphasizes that GPIF should increase its allocation to Japanese assets. Japanese Prime Minister Kishi Nobuo emphasized the importance of encouraging households and the Government Pension Investment Fund (GPIF) to increase investments in Japanese financial assets, further intensifying market expectations that the fund may adjust its asset allocation. During a parliamentary meeting, Kishi stated, "As the stock market continues to perform robustly, we believe it is very important to take measures to encourage households and pension funds, including the GPIF, to further increase their investments in Japanese financial assets, allowing the public to share in the benefits of Japan's economic growth." She added, "By doing so, our goal is to promote a virtuous cycle between economic growth and household asset accumulation."

Individual Stock News

Meta (META.US) will hire an Amazon (AMZN.US) cloud executive to accelerate its data center and cloud computing layout. According to reports, a senior executive from Amazon Web Services (AWS) is set to join Meta Platforms in the coming weeks, indicating that the social media giant Meta's ambitions in building data centers and computing resources are strengthening. Sources revealed that one of the highest-level executives at Amazon Web Services, Dave Brown, will bring nearly 20 years of industry experience to Meta, reporting to Meta's infrastructure head Meta CEO Mark Zuckerberg stated at the annual shareholder meeting held in May that building a cloud computing business is "absolutely under consideration." He mentioned that companies contact Meta "almost every week" seeking access to its artificial intelligence models or paying a premium for the use of its idle computing capacity.

Micron (MU.US) signs long-term agreements with Qualcomm (QCOM.US) and others to secure AI automotive storage supply. Micron Technology is extending its AI chip demand from data centers to the automotive sector, locking in customers and stabilizing revenue sources through long-term supply agreements. Micron announced on Thursday that it has signed long-term agreements with several automotive suppliers, including chip designer Qualcomm, audio product manufacturer Harman, and automotive parts suppliers such as Visteon, JOYNEXT, DENSO, Astemo, and Hyundai Mobis. The agreements aim to provide a stable supply of storage and storage components for AI-enabled vehicles and help partners optimize production planning and investment decisions for future advanced vehicle platforms by locking in prices.

Trump's posts can be accessed early for a fee. According to reports, Trump Media & Technology Group (DJT.US), owned by former U.S. President Donald Trump, has recently launched a paid authorization data interface that will provide the "fastest" access to posts from top accounts on the "Truth Social" platform, including Trump's own account. The product, named "Truth API," officially launched on August 1 and will transmit real-time updates from the platform's 10 most influential accounts to customers at a speed far exceeding the regular push notifications of "Truth Social." A company spokesperson stated that the product is designed specifically for institutions like algorithmic trading firms that are "most affected by information delay costs." Previously, institutions closely monitoring popular posts on "Truth Social" could only rely on manual tracking.

From a February probe to a $53 billion hunt, PayPal (PYPL.US) refuses to be Stripe's "discount prey"! The battle for digital payment "full-stack hegemony" intensifies. Media reports citing informed sources indicate that the board of directors of PayPal, one of the largest digital payment service providers globally, believes that the $53 billion acquisition offer from fintech infrastructure platform Stripe, aimed at businesses and developers, in partnership with private equity firm Advent International, undervalues the company's overall worth and will face global antitrust scrutiny and financing obstacles in the future. PayPal spokespersons and representatives have yet to formally respond to the proposal. According to media reports, the PayPal board is weighing this offer—along with the possibility of other offers—against the management's business turnaround strategy.

Disappointing earnings guidance causes Netflix (NFLX.US) stock price to plummet. Due to earnings guidance falling short of expectations, the stock price of streaming giant Netflix dropped sharply in pre-market trading, at one point falling over 10%. The company expects third-quarter revenue for 2026 to be $12.9 billion, with earnings per share of $0.82, both below expectations. Netflix has also narrowed its full-year revenue guidance range to $51 billion to $51.4 billion, down from a previous range of $50.7 billion to $51.7 billion This has intensified investors' concerns about the company's growth peaking. Wall Street analysts have pointed out that investors generally believe that Netflix's business is deteriorating. Goldman Sachs has lowered its target price for Netflix from $110 to $94. Société Générale has also reduced its target price for Netflix from $100 to $95.

Important Economic Data and Event Forecast

Beijing time 20:30: U.S. June building permits month-on-month preliminary value, U.S. June housing starts annualized month-on-month rate.

Beijing time 21:15: U.S. June industrial production month-on-month rate.

Beijing time 22:00: U.S. July University of Michigan consumer confidence index preliminary value