Preview of US Stock Market | The three major stock index futures show mixed reactions, and tonight the PPI data will be released.

1. Before the U.S. stock market opens on July 16 (Wednesday), the futures of the three major U.S. stock indexes show mixed movements. As of the time of writing, the Dow Jones futures rose by 0.24%, the S&P 500 index futures rose by 0.03%, and the Nasdaq futures fell by 0.13%. 2. As of the time of writing, the German DAX index rose by 0.26%, the UK FTSE 100 index rose by 0.21%, the French CAC40 index rose by 0.13%, and the Euro Stoxx 50 index fell by 0.28%. 3. As of the time of writing, WTI crude oil fell by 1.10% to $65.79 per barrel. Brent crude oil fell by 0.93% to $68.07 per barrel. Individual Stock News The June CPI performance is mixed, and the market is waiting for the reaction of the PPI data. The core CPI increase in June met the Federal Reserve's target, which is good news for policymakers, but it may not be enough to support a rate cut in July. Interest rate swap data shows that traders believe there is a 62% probability of a 25 basis point rate cut by the Federal Reserve in September, and they expect two rate cuts by the end of the year. In this context, there is cautious optimism towards a rate cut, and the U.S. index fluctuated but ultimately trended upward. Today, the U.S. June PPI data is worth watching. Who will be the next Federal Reserve Chairman? It is rumored that Kevin Hassett, who currently serves as the Director of the National Economic Council (NEC), is the leading candidate, while former Federal Reserve Board Governor Kevin Warsh is another popular choice. Treasury Secretary Steven Mnuchin is participating in the selection process and providing advice, and if other candidates are unconvincing, he may also be considered for the position. Meanwhile, Federal Reserve Board Governor Lael Brainard is still seen as a dark horse candidate. President Trump has expressed his dissatisfaction with current Federal Reserve Chairman Jerome Powell, criticizing the high interest rate policy hindering economic growth and calling for rate cuts. Trump has made it clear that he expects the next Federal Reserve Chairman to quickly initiate rate cuts, with clearer conditions than at the beginning of his term. Risk of Jerome Powell's resignation increases, investors bet on long-term inflation and steepening of U.S. bond yield curve. President Trump's calls for Federal Reserve Chairman Jerome Powell to resign are prompting investors to start portfolio protection against the risk of rising inflation. If a more dovish Fed takes office, it may boost inflation and lead bondholders to demand higher returns to hold bonds. Bond investors are pricing in potential future price increases in the inflation market. On Monday evening, the breakeven inflation rate on U.S. 5-year Treasury Inflation-Protected Securities (TIPS) rose to 2.476%, a new high in three months. Trump: Tariffs on pharmaceuticals and semiconductors may be imposed before August 1, with small country rates slightly higher than 10%. President Trump said on Tuesday that import tariffs on pharmaceuticals are likely to be imposed by the end of this month, with semiconductor tariffs also advancing at the same time, possibly coinciding with the comprehensive "equivalent" tariffs that will take effect on August 1. "It will probably start by the end of this month. We'll start with a lower tariff rate, giving pharmaceutical companies about a year to move production back, then we'll raise the tariffs significantly," Trump said to reporters on his way back from attending an AI summit in Pittsburgh. He also revealed that the timetable for semiconductor tariffs would be "similar," and that chip tariffs are "easier to implement," but did not provide specific details. Huang Renxun: China's AI is "world-class," very much wants to buy a Xiaomi car. On July 16, NVIDIA Corporation CEO Huang Renxun delivered his first speech in Chinese at the opening ceremony of the third Chain Expo. He praised China's world-class AI models, emphasized the importance of the Chinese market, and promised that NVIDIA Corporation will continue to invest in China. Surprisingly, he did not wear his iconic leather jacket, but instead wore traditional Chinese clothing. He pointed out that in the next decade, AI that can understand the physical world and perform tasks will be born, which will disrupt traditional factory models, with humans and AI working side by side to manufacture intelligent products, driving a new industrial revolution and growth opportunities. Interestingly, Huang Renxun also expressed a strong interest in buying a Xiaomi car on that day, stating that the progress of Chinese electric vehicles in the past five years has been "astonishing." Earnings season for U.S. stocks is approaching! Hedge funds urgently change tactics: cutting bank stocks and increasing holdings of essential consumer goods stocks. A report from Goldman Sachs Group, Inc. shows that for the second consecutive week before the earnings season for U.S. stocks, hedge funds have been selling off bank stocks and buying essential consumer goods stocks at the fastest rate in nearly two years. This week, the bullish trend in U.S. stocks that hit historic highs may face a test as major banks begin to report second-quarter earnings, and the U.S. June consumer price data was released on Tuesday. Data from Goldman Sachs Group, Inc.'s bulk brokerage department shows that hedge funds have been selling off long positions in major U.S. banks and global financial services companies for the second consecutive week. Goldman Sachs Group, Inc. states that these investors sold long positions in European financial stocks and increased short positions. The company also noted that banks, financial services companies, and insurance companies were net sold, while trading and consumer finance companies were net bought. Individual stock news Morgan Stanley (MS.US) reported net revenue of $16.79 billion for the second quarter, exceeding market expectations. Morgan Stanley reported net revenue of $16.79 billion for the second quarter, exceeding the estimated $16.04 billion; earnings per share for the second quarter were $2.13; stock trading revenue for the second quarter was $3.72 billion, with market expectations at $3.53 billion; fixed income, currency and commodity business sales and trading revenue for the second quarter was $21.8 billion, with market expectations at $21.1 billion. Goldman Sachs Group, Inc. (GS.US) set a record with $4.3 billion in stock trading revenue in Q2. Goldman Sachs Group, Inc. reported a stock trading revenue of $4.3 billion in the second quarter, setting a new record, exceeding expectations by $600 million and increasing by $1 billion compared to the previous quarter; fixed income trading revenue was $3.47 billion, also setting a record; investment banking fees rose to $2.19 billion, with financial advisory revenue increasing by 71%, stock underwriting staying the same, and debt underwriting slightly decreasing; asset and wealth management net revenue was $3.78 billion, with management fees increasing by 11%; the total number of employees decreased by 700 to 45,900, with cost-cutting plans continuing. Bank of America Corp (BAC.US) reported Q2 EPS exceeding expectations at $0.89, keeps NII guidance for the year at $15.5-15.7 billion. Bank of America Corp reported earnings per share of $0.89 for the second quarter, higher than the expected $0.86; Net Interest Income (FTE) was $14.8 billion, increasing for the fourth consecutive quarter, with full-year Q4 guidance maintained at $15.5-15.7 billion; Non-interest income was $11.8 billion. Credit reserves increased to $1.59 billion, with net charge-offs and non-performing rates remaining steady. Non-interest expenses were $17.2 billion, a decrease of $600 million compared to the previous quarter. Average deposits were $1.97 trillion, and loans were $1.13 trillion, both increasing compared to the previous quarter, with personal banking revenue of $10.8 billion and global wealth client assets of $4.4 trillion, a 10% year-over-year increase. Global market revenue was $6.03 billion, with sales and trading revenue excluding DVA at $5.3 billion, an increase of 15% year over year, fixed income rising by 16% to $3.2 billion, and equities by 10% to $2.1 billion. Not afraid of Trump's threat of pharmaceutical tariffs! Johnson & Johnson (JNJ.US) beat second-quarter earnings expectations and raised full-year guidance. Johnson & Johnson exceeded Wall Street expectations for the second quarter and raised its full-year guidance, demonstrating confidence in the face of dual threats of tariffs and drug price cuts in the pharmaceutical industry. The report shows that Johnson & Johnson's sales in the quarter reached $23.7 billion, surpassing analysts' average expectation of $22.8 billion, with second-quarter adjusted EPS of $2.77, beating market expectations by $0.09. Johnson & Johnson raised the mid-point of its 2025 revenue forecast by $2 billion to $93.4 billion, and raised its full-year adjusted EPS forecast by $0.25 to a range of $10.80-10.90. Competitor to NVIDIA Corporation! Broadcom Inc. (AVGO.US) launches new Tomahawk Ultra network chip. Broadcom Inc. announced that its groundbreaking new network processor "Tomahawk Ultra" has entered mass production, designed for high-performance computing and artificial intelligence applications. The Tomahawk Ultra series is optimized for the tight coupling and low-latency communication patterns present in high-performance computing (HPC) systems and artificial intelligence clusters. According to the company, with ultra-low latency switching technology and adaptable optimized Ethernet header values, it can provide predictable and efficient performance for large-scale simulations, scientific computing, and synchronized artificial intelligence model training and inference. ASML Holding NV ADR (ASML.US) slashes growth expectations, stock price plunges nearly 8% in pre-market trading. ASML Holding NV ADR announced in its financial report that CEO Christophe Fouquet withdrew the company's growth forecast for next year citing trade tensions and global tensions as reasons. Fouquet stated in the quarterly financial statement, "The escalating uncertainty caused by macroeconomic and geopolitical developments continues. Therefore, while we are still preparing for growth in 2026, we cannot confirm it at this stage." ASML Holding NV ADR expects net sales in the third quarter to be in the range of 7.4-7.9 billion (approximately $8.6 billion), lower than analysts' average estimate of 8.2 billion. The company maintains its expectation for revenue growth of 15% for the full year. The report shows that the company received new orders of 5.5 billion in the second quarter, exceeding market expectations. However, ASML Holding NV ADR announced that it will stop reporting quarterly order data from next year, believing that this indicator does not accurately reflect business momentum. Rio Tinto plc Sponsored ADR (RIO.US) reports lower-than-expected iron ore shipments in Q2, copper production may reach upper-end of guidance to boost confidence. Rio Tinto plc Sponsored ADR group announced that second-quarter iron ore shipments grew less than expected, but copper production is expected to reach the upper end of the guidance range for the FY2025. As the world's largest producer of steelmaking raw materials (iron ore), Rio Tinto plc Sponsored ADR's operations were previously hindered in the first quarter of this year due to frequent tropical cyclones, but its iron ore shipments are gradually recovering. In the three months ending June 30, the group shipped 79.9 million tons of iron ore from the Pilbara mining area, a 13% increase from the previous quarter but lower than the Visible Alpha consensus expectation of 81.98 million tons. During this period, the proportion of low-grade SP10 iron ore shipments from Rio Tinto plc Sponsored ADR increased, accounting for 29% of total Pilbara shipments. Upcoming important economic data and events 8:30 PM Beijing time: U.S. June PPI y/y (%). 9:15 PM Beijing time: U.S. June Industrial Production m/m (%). 10:30 PM Beijing time: Weekly EIA Crude Oil Inventories as of July 11 (thousand barrels). 8:00 PM: 2027 FOMC Voter, Richmond Fed President Barkin speech. 9:15 PM: 2026 FOMC Voter, Cleveland Fed President Mester speech. 10:00 PM: FOMC Board of Governors Bart on Financial Regulation speech. To be determined: NVIDIA Corporation CEO Huang Renxun holds a media briefing in Beijing. To be determined: 2027 FOMC Voter, Richmond Fed President Barkin speech. 2:00 AM the next day: The Federal Reserve releases the Beige Book. 5:30 AM the next day: FOMC Permanent Voter, New York Fed President Williams speech on U.S. economy and monetary policy. Earnings forecast Thursday morning: Alcoa Corporation (AA.US) Thursday pre-market: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), Novartis AG Sponsored ADR Pharmaceutical (NVS.US), Abbott Laboratories (ABT.US), PepsiCo, Inc. (PEP.US), GE Aviation (GE.US)