U.S. Stock Market Outlook | Three Major Index Futures Decline, Oil Prices Rise, Google and Tesla to Release Earnings After Hours

Pre-Market Market Trends

1. As of July 22 (Wednesday), U.S. stock index futures are all down before the market opens. As of the time of publication, Dow futures are down 0.16%, S&P 500 futures are down 0.37%, and Nasdaq futures are down 0.90%.

1. As of the time of publication, the German DAX index is up 0.27%, the UK FTSE 100 index is up 1.28%, the French CAC40 index is up 0.86%, and the Euro Stoxx 50 index is up 0.15%.

1. As of the time of publication, WTI crude oil is up 3.53%, priced at $87.32 per barrel. Brent crude oil is up 3.86%, priced at $94.52 per barrel.

Market News

Middle East Conflict Escalates! On the evening of July 21, Eastern Time, and in the early hours of July 22 in Iran, the U.S. military launched military strikes on multiple locations within Iran for the 11th consecutive night. In response, the Iranian military attacked U.S. military bases in Kuwait, Jordan, and Bahrain. Reports indicate that in the early hours of July 22, Tehran's air defense system was activated multiple times, but as of now, Iran has not disclosed any casualties or property damage. Some Iranian analysts point out that the deep-rooted distrust between the U.S. and Iran, pressure from Israel, and domestic political issues in the U.S. limit and weaken the potential for negotiations to ease tensions. Currently, there are no signs of de-escalation in the new round of conflict between the U.S. and Iran, and the ongoing struggle over the Strait of Hormuz continues to destabilize the security situation in the entire Middle East. Additionally, U.S. Secretary of State Rubio stated that the U.S. is still willing to resolve the Iranian crisis through diplomatic means, but Iran has not shown a serious willingness to negotiate at this time.

$1.65 Trillion Off-Balance Sheet Bomb! The "Invisible Debt" of Five Tech Giants Soars Eightfold in Four Years, Could the AI Arms Race Trigger the Next Liquidity Disaster? The crazy "arms race" among the five major U.S. tech giants in artificial intelligence (AI) infrastructure is giving rise to an "invisible debt empire" that far exceeds their on-balance sheet liabilities. Recently, an analysis of the latest financial reports of Google (GOOGL.US), Microsoft (MSFT.US), Amazon (AMZN.US), Meta (META.US), and Oracle (ORCL.US) revealed that these five companies have accumulated "invisible debt" totaling $1.65 trillion through long-term procurement commitments, data center leases, and other means, which not only exceeds their officially disclosed liabilities of approximately $1.35 trillion but has also surged eightfold in the past four years. This massive off-balance sheet obligation has raised increasing concerns among Wall Street and global regulators: if AI demand falls short of expectations, these future payment commitments hidden in the footnotes could quickly transform into cash flow-consuming "debt bombs." The U.S. plans to impose new tariffs before Friday, continuing the soon-to-expire 10% temporary global tariff. According to informed sources, President Trump is preparing to impose new tariffs on products from dozens of economies before Friday, aiming to ensure that the tariff system remains intact after the expiration of the temporary 10% global tariff. It is reported that the new round of tariffs will range from 10% to 12.5%. Earlier this year, the U.S. Supreme Court rejected Trump's previous global tariff policy, after which Trump implemented the 10% global tariff. Trump's temporary tariffs will expire on Friday, and if new tariffs are implemented at that time, the White House can avoid a gap between the two. The plan has not been finalized and may still change. Reports indicate that as the midterm elections in November approach, Trump's push for the latest proposal will solidify his commitment to tariffs, despite voters' concerns about the cost of living. Critics argue that import taxes will raise prices for consumer goods, but Trump and other senior officials assert that tariffs are necessary to rebuild the strength of American manufacturing and protect domestic industries.

Trump hits hard on generic drugs: 100% tariff countdown of two years, doubling to 200% in 2029. Trump stated that generic drug manufacturers will have two years to relocate production to the U.S., or they will face a 100% import tariff starting in August 2028. This rate will double to 200% one year later, in August 2029. Trump stated in a post: "This move aims to 'bring back' generic drug production to the U.S., punishing companies that fail to build factories and acquire equipment within the specified timeframe." On the eve of the 2026 midterm elections, Trump views drug costs as a key variable affecting public affordability. He has long complained that American consumers pay much higher drug prices than overseas markets and has repeatedly attempted to narrow this price gap. Recently, his administration also launched a consumer discount drug direct sales platform named "TrumpRX." The White House has recently set multiple delayed effective dates for tariffs, accompanied by devastating consequences as the deadlines approach, using this as leverage in future negotiations with countries and companies.

Individual Stock News

U.S. tech stocks fell before the market opened. As of the time of writing on Wednesday, SK Hynix (SKHY.US) fell over 6%, Micron Technology (MU.US) and Western Digital (WDC.US) fell nearly 4%, SanDisk (SNDK.US) and Seagate Technology (STX.US) fell over 3%; Intel (INTC.US) fell over 3%, AMD (AMD.US), TSMC (TSM.US), and Qualcomm (QCOM.US) fell over 2%, Broadcom (AVGO.US) and ASML (AMSL.US) fell nearly 2%, NVIDIA (NVDA.US) fell over 1%; optical communication stocks fell broadly, with Astera Labs (ALAB.US) falling over 4%, Lumentum (LITE.US) and Marvell Technology (MRVL.US) falling nearly 3%.

Market "false joy"! SK Hynix (SKHY.US) denies rumors of acquiring Intel's (INTC.US) Ohio wafer fab, a trillion-dollar merger falls through. SK Hynix officially denied on Wednesday the market rumors that it was negotiating to acquire Intel's semiconductor park in New Albany, Ohio The company clarified through formal regulatory documents submitted to the Korean Exchange (DART) that, although it has been evaluating global investment opportunities, "it has neither sought nor decided to acquire Intel's factories and wafer fabs in Ohio." Although this transaction was ultimately confirmed to be a false rumor, the market's initial high attention was due to the fact that this assumption perfectly matched two key contradictions in the current global semiconductor industry chain restructuring— the "North American manufacturing anxiety" of storage giants and the "funding gap" of Intel's foundry business. Behind this market reaction is investors' strong expectation for SK Hynix to accelerate its manufacturing layout in the United States.

Trump's strong push for "American manufacturing" raises costs, TSMC (TSM.US) warns that overseas expansion will long-term erode profit margins. Pressure from U.S. President Trump to manufacture advanced semiconductors in the U.S. is driving up costs for TSMC, the world's largest chip manufacturer, and squeezing its profit margins. After Trump returns to power in 2025, TSMC has announced a total investment commitment of $200 billion in the U.S., including an additional $100 billion investment in advanced semiconductor manufacturing and packaging facilities announced last week. TSMC stated that, despite being driven by the AI boom, strong earnings this quarter were still affected by overseas expansion. TSMC CFO Jensen Huang noted that the gross margin growth exceeded the expected guidance but was offset by the dilution effect from overseas wafer fabs. He added that as the "capacity ramp-up" of overseas wafer fab projects continues, profit margins will be further diluted in the coming "years."

New orders exceed $60 billion, backlog hits a record high, Supermicro (SMCI.US) surges pre-market. Supermicro's preliminary performance shows that new orders for the quarter exceeded $60 billion—mainly due to sustained strong demand for advanced AI servers, with its backlog reaching a historical high. These new orders "are expected to be delivered in the coming quarters," which is a positive signal for future revenue and indicates that the company is winning more contracts. The company also stated that the gross margin for the fiscal quarter ending June 30 is expected to be between 15% and 17%, which is better than expected and indicates progress in selling high-margin products. The company also mentioned that revenue for the fourth fiscal quarter will fall at the lower end of the previously provided guidance range of $11 billion to $12.5 billion, while the average analyst expectation is $11.8 billion. As of the time of writing, Supermicro's stock rose nearly 16% in pre-market trading on Wednesday.

AT&T (T.US) Q2 earnings exceed expectations, accelerates stock buyback. The financial report shows that AT&T's Q2 revenue increased by 2.3% year-on-year to $31.6 billion, falling short of the market expectation of $31.77 billion; adjusted earnings per share were $0.65, better than the market expectation of $0.59. The company plans to maintain its current annual dividend level of $1.11 per share and conduct a stock buyback of approximately $24 billion. The company still expects adjusted earnings per share to be between $2.25 and $2.35 in 2026, with a midpoint of $2.30 below the market expectation of $2.32. As of the time of writing, AT&T's stock rose over 4% in pre-market trading on Wednesday Volatile market conditions spur trading frenzy, Interactive Brokers (IBKR.US) reports Q2 profits and revenues exceeding expectations. The American online brokerage Interactive Brokers released a strong financial report for the second quarter of 2026 after the market closed on Tuesday. Benefiting from sustained customer trading activity, significant expansion in margin loans, and steady growth in net interest income, the company's revenues and profits both surpassed Wall Street expectations. The financial report showed that Interactive Brokers' net revenue for the second quarter reached approximately $1.9 billion, marking a substantial 28% increase from $1.48 billion in the same period last year, and significantly higher than the market consensus estimate of $1.79 billion; adjusted diluted earnings per share were $0.69, up from $0.51 in the same period last year, and clearly exceeding analysts' expectations of $0.64.

Earnings Forecast

Thursday morning: Alphabet (GOOGL.US), Tesla (TSLA.US), Texas Instruments (TXN.US)

Thursday pre-market: Nokia (NOK.US), STMicroelectronics (STM.US), TotalEnergies (TTE.US), Southwest Airlines (LUV.US), T-Mobile US (TMUS.US), Union Pacific (UNP.US), American Airlines (AAL.US)