U.S. stock market pre-market: Three major stock index futures all rose. The tension between the United States and Iran has eased, oil prices have plummeted, and a super heavy week for U.S. stocks is coming
The three major stock index futures all rose, and major European indexes generally rose; the situation between the United States and Iran eased, and oil prices plummeted; a super heavy week for the U.S. stock market is coming! The financial reports of the four major technology giants and the Federal Reserve's interest rate decisions are taking turns.
Before the market opened on Monday, all three major U.S. stock index futures rose, and major European indexes generally rose. As of press time, Nasdaq 100 futures were up 1.3%, Dow futures were up 1.04%, and S&P 500 futures were up 0.83%. In terms of commodities, Brent crude oil fell 5.57% to US$86.57/barrel; WTI crude oil fell 5.89% to US$84.05/barrel. Spot gold rose 0.86% to $4,088.3 an ounce. Spot silver rose 1.23% to $58.91. In terms of individual stocks, most star technology stocks rose before the market opened. AMD rose by more than 2%, Micron Technology rose by nearly 2%, Intel, Google, and Microsoft rose by more than 1%, and SpaceX fell. Popular Chinese concept stocks generally rose before the market opened, with Hesai rising nearly 3%, Ctrip rising nearly 4%, and Alibaba rising more than 1%. Storage concepts generally rose, with SK Hynix rising by more than 4% and SanDisk rising by nearly 3%. After the United States launched 13 consecutive nights of air strikes on Iran, the Pentagon suspended its bombings late last Friday night and did not launch new strikes on Saturday and Sunday. Iran also simultaneously stopped its retaliatory strikes against neighboring countries where US military bases are stationed, and did not open fire for two consecutive days. A senior Iranian official told reporters that Tehran's position is clear-"respond to attacks with attacks." If the United States stops its attacks, Iran will also stop its actions. This message has been conveyed to the United States. Walz, the U.S. ambassador to the United Nations, said that President Trump’s suspension of air strikes is to leave room for diplomatic negotiations and give a certain operating margin. The U.S. stock earnings season is reaching its climax this week, and the performance of four companies among the "Seven Big Technology Giants" has become the focus of the market: Microsoft and Meta will announce earnings on Wednesday; Apple and Amazon will announce earnings on Thursday. As with Alphabet and Tesla's earnings reports last week, the market's core concern is whether the huge AI capital expenditures can deliver real returns. The 100-day countdown to the U.S. midterm elections begins! Goldman Sachs: U.S. stocks will gradually feel the impact starting in August Currently, there are only about 100 days until the November congressional midterm elections in the United States. Goldman Sachs strategists warned that investors' attention may gradually turn to the political uncertainty caused by the mid-term elections in the coming weeks, and the U.S. stock market may gradually feel the impact of the mid-term elections starting in August. "In past cycles, the impact of policy uncertainty on the economy has typically risen before the August midterm elections and remained elevated in the months that follow," Goldman Sachs strategist Ben Snider said in a research note. The report also mentioned that although volatility at the individual stock level has increased significantly as the mid-term elections approach, the correlation between stocks is at historically low levels, which has instead suppressed significant fluctuations at the index level. Although the market is currently mainly volatile around topics such as artificial intelligence trading, Goldman Sachs predicts that when the U.S. stock earnings season ends in a few weeks, the market will "increase attention to macro issues such as elections, geopolitics, and interest rate fluctuations," thus driving up index volatility. It is also worth mentioning that the biggest change from previous years in this year’s election prediction market is that the market pays more attention to energy prices rather than the performance of other industries or factors. Specifically, according to survey data cited in the Goldman Sachs report, inflation remains the dominant issue among voters, while projected odds for a Democratic victory have been highly in lockstep with gasoline price movements in recent months. Bank of America: Oil price fluctuations themselves may push up inflation, raising the risk of global central banks raising interest rates. Bank of America pointed out that the rise of Brent crude oil above US$100 per barrel mainly reflected the obstruction of transportation in the Strait of Hormuz and Bab el-Mandeb, rather than the situation in the Middle East itself. Even if the long-term average of oil prices remains unchanged, frequent fluctuations may push up inflation: companies tend to raise prices when costs rise, but do not lower prices simultaneously when oil prices fall, and the indirect impact continues to seep into core inflation. After five years of above-target inflation and increasingly frequent supply shocks, the central bank's traditional approach of continuing to "see through" energy shocks faces challenges; if inflation and expectations rise while nominal interest rates remain unchanged, real interest rates will fall, equivalent to passive policy easing.
In the United States, the Bank of America's baseline judgment is that the Federal Reserve will maintain interest rates at 3.5% to 3.75% in July, but the market has priced in a nearly 10 basis point interest rate increase, and WTI has risen by more than 10% since the silent period, making the decision closer. Not raising interest rates may damage the credibility of anti-inflation, while raising interest rates is inconsistent with Chairman Warsh's framework of ignoring supply shocks. Bank of America still expects to raise interest rates by 25 basis points each in September, October and December, and believes that WTI's annual average of $80 to $100 is most likely to trigger a hawkish reaction. The European Central Bank is expected to implement a second interest rate increase in September, and the risk of a third interest rate increase has increased again, but it will still cut interest rates in 2027, bringing the policy interest rate back to 2% or below. The Bank of England is expected to keep interest rates unchanged at 3.75% by 7 to 2, and the risk of a 6 to 3 vote is higher. Staying still during the year is still the baseline scenario, but if the energy shock continues, the peak inflation may reach 3.3% and 3.6% under the moderate and medium scenarios respectively, and the risk of raising interest rates will further increase. In other regions, Bank of America expects the Bank of India to "neutral maintain" interest rates in August; the Central Bank of Kazakhstan is expected to remain on hold in July and may still cut interest rates by up to 300 basis points cumulatively during the year; the Brazilian election cycle has begun, and fiscal consolidation will become a core economic issue. Greenspan's "difficulty" reappears. Will Warsh raise interest rates in exchange for a decline in long-term interest rates? New Federal Reserve Chairman Warsh is facing a policy topic with historical resonance: raising interest rates may just be able to lower long-term interest rates, thereby achieving the Trump administration's cherished goal of lowering mortgage interest rates. When the Federal Reserve meets this week to discuss interest rates, the bond market has priced in a probability of an increase in the federal funds rate target to 38%, a sharp jump from less than 10% before Warsh appeared before the Senate Banking Committee. Bloomberg Economics' sentiment index of Fed officials shows that the current overall degree of hawkishness among decision-makers is the highest since the 2023 interest rate hike cycle, and among the seven voting members, there is a clear hawkish tendency. Although this interest rate increase is not a baseline scenario, this logic chain is quietly circulating in the market: If Washer uses an interest rate increase to consolidate its anti-inflation credibility, it may squeeze the inflation premium embedded in long-term interest rates, thereby driving down mortgage rates, car loan rates and other entity borrowing costs - this is the result that the White House really desires. However, practical constraints cannot be ignored. The latest inflation data shows that price pressures have eased. The five working groups announced by Warsh are conducting a comprehensive review of the Fed's operations. The results are expected to be released before the end of the year. The timing of the sudden tightening of monetary policy before the review conclusions are released is quite subtle. Additionally, Warsh holds only one vote on the FOMC, with seven votes needed to change policy rates. Even if there is no interest rate increase this week, the market's mainstream judgment is that Warsh is systematically strengthening his anti-inflation credibility, and this in itself may be the most powerful prerequisite for lowering long-term interest rates. After Hynix and Samsung’s $700 billion investment, Bernstein shouted: Storage correction is the buying point At the AI Summit hosted by the Korean government in San Francisco, global storage giants and chip designers signed long-term cooperation agreements totaling hundreds of billions of dollars. The AI computing power supply chain is shifting from "on-demand procurement" to "ultra-long-term capacity lock-in." SK Hynix and Nvidia signed a letter of intent for cooperation worth more than US$500 billion, covering storage supply and a 2GW Vera Rubin DSX AI factory project planned to go online for SK Telecom in 2027. Samsung Electronics has reached a US$200 billion strategic memorandum with Broadcom to lock in high-bandwidth memory (HBM) supply and advanced foundry services below 2 nanometers until 2030. After the announcement of this series of agreements, the well-known institution Bernstein reiterated its bullish stance on the storage sector, maintaining the "outperform" rating of Samsung Electronics, SK Hynix and Micron Technology, and pointed out that the recent correction of the sector provides a "good entry opportunity." Bernstein's analyst team, led by Mark Li, noted that the storage partnership covers "long-term technology development and stable supply of next-generation AI memory" and is intended to help SK Hynix "expand its growth base." Bernstein clearly pointed out in the report that the announced amounts of these agreements mainly point to the storage link, reflecting the urgent need of Nvidia and Broadcom to "ensure storage supply."
UBS: Intel's foundry business narrative continues to improve, but high capital expenditures limit valuation space UBS said in its latest research report that Intel's second-quarter results and third-quarter guidance were better than investors' previous expectations. Increased wafer output and shortened production cycles have eased supply bottlenecks, and the outlook for the manufacturing business continues to improve. However, product competitiveness, capital expenditure financing and potential shareholder dilution risks have not been eliminated, so we maintain a "neutral" rating and a target price of US$121. UBS believes that server CPU supply will improve significantly by the end of the third quarter, creating conditions for revenue acceleration in the fourth quarter. As inference and agent AI workloads grow, the ratio of CPU to GPU purchases is approaching parity, and server CPU industry shipments are expected to maintain double-digit growth at least until 2028. The annualized revenue of Intel's custom ASIC business has risen from US$1 billion in the fourth quarter of 2025 to approximately US$2 billion, and may exceed US$4 billion in the future. In terms of foundry business, Intel has promised to promote the 14A process into mass production in 2028. UBS believes that this may mean that the company has received support from potential customers. The company raised its capital expenditure forecast for 2026 from approximately US$17 billion to US$20 billion, and expected a significant increase in 2027, which may be close to US$30 billion. UBS raised Intel's earnings per share forecast from 2026 to 2028 to US$1.56, US$2.17, and US$2.82, but believes that high investment and free cash flow pressure limit further upside. After going sideways in July, it soared 20% and approached a new high. Options before Apple’s financial report suddenly showed a “bullish” signal. Before Apple’s big performance test, the options market is sending out unusual bullish signals. With the U.S. stock market as a whole in two months of volatility, Treasury yields hitting new highs, and Google and Tesla’s earnings reports both disappointing the market, Apple has become the only stock among the top ten S&P 500 stocks whose stock price is close to its all-time high. Apple will announce its latest fiscal quarter results after the U.S. stock market closes on Thursday. Prior to this, big funds in the options market were buying in-the-money call options on a large scale, and speculative funds were betting that the stock price would break through a record high before this Friday. At the same time, the post-earnings volatility implied by option pricing is close to 4% - a figure that far exceeds the historical volatility level of about 1% on average over the past year. According to Cboe LiveVol data, this is an unusually large implied volatility. Apple's stock price was almost stagnant in the first seven months of this year, but it has risen about 20% since the lows in late June and is less than $2 from its latest all-time high set two weeks ago. When the market as a whole is under pressure, Apple is regarded as a rare safe haven by the market, and its boost to market sentiment is highly anticipated. Goldman Sachs: Nokia optical network orders accelerate, AI and cloud demand support growth, but valuation space is limited Goldman Sachs said in its latest research report that Nokia's second-quarter revenue was in line with market expectations and was 16% higher than expected earnings before interest and tax. Calculated on a fixed exchange rate and comparable basis, the group's sales increased by 9% year-on-year, of which optical networks and IP networks increased by 20% and 16% respectively. If the fixed wireless access terminal and enterprise campus edge business had not been classified as discontinued operations, sales would have increased by 66 million euros, but comparable EBIT would have decreased by 13 million euros. AI and cloud demand have become core driving forces. Nokia received 2.8 billion euros in orders from relevant customers in the second quarter, a significant increase from the 1 billion euros in the first quarter, and about half of it is expected to be converted into revenue in the next 12 months; AI and cloud business sales more than doubled year-on-year, mainly driven by data center interconnection and extended network demand. Indium phosphide wafer and memory supply remains tight, and customers are locking in capacity through long-term orders. The AI-RAN platform cooperated by the company and NVIDIA plans to launch a pilot program at the end of 2026 and be put into commercial use in 2027. In order to alleviate the bottleneck of optical device production capacity, Nokia has acquired NXP's Arizona factory site. The San Jose factory is expected to enter mass production by the end of the year, and Pennsylvania's advanced testing and packaging capabilities will be expanded approximately tenfold. At the same time, the company expects to incur restructuring charges of approximately 800 million euros in 2026.
Goldman Sachs believes that optical network and IP network orders are strong, but the recent growth of mobile infrastructure still requires caution, and it lowers its revenue forecast from 2026 to 2030 by 0% to 2%, and its earnings per share forecast by 1% to 2%. The bank maintained a "neutral" rating and lowered the target prices of European stocks and ADRs from 8.9 euros and 10.4 U.S. dollars to 8.5 euros and 9.7 U.S. dollars respectively.
In the United States, the Bank of America's baseline judgment is that the Federal Reserve will maintain interest rates at 3.5% to 3.75% in July, but the market has priced in a nearly 10 basis point interest rate increase, and WTI has risen by more than 10% since the silent period, making the decision closer. Not raising interest rates may damage the credibility of anti-inflation, while raising interest rates is inconsistent with Chairman Warsh's framework of ignoring supply shocks. Bank of America still expects to raise interest rates by 25 basis points each in September, October and December, and believes that WTI's annual average of $80 to $100 is most likely to trigger a hawkish reaction. The European Central Bank is expected to implement a second interest rate increase in September, and the risk of a third interest rate increase has increased again, but it will still cut interest rates in 2027, bringing the policy interest rate back to 2% or below. The Bank of England is expected to keep interest rates unchanged at 3.75% by 7 to 2, and the risk of a 6 to 3 vote is higher. Staying still during the year is still the baseline scenario, but if the energy shock continues, the peak inflation may reach 3.3% and 3.6% under the moderate and medium scenarios respectively, and the risk of raising interest rates will further increase. In other regions, Bank of America expects the Bank of India to "neutral maintain" interest rates in August; the Central Bank of Kazakhstan is expected to remain on hold in July and may still cut interest rates by up to 300 basis points cumulatively during the year; the Brazilian election cycle has begun, and fiscal consolidation will become a core economic issue. Greenspan's "difficulty" reappears. Will Warsh raise interest rates in exchange for a decline in long-term interest rates? New Federal Reserve Chairman Warsh is facing a policy topic with historical resonance: raising interest rates may just be able to lower long-term interest rates, thereby achieving the Trump administration's cherished goal of lowering mortgage interest rates. When the Federal Reserve meets this week to discuss interest rates, the bond market has priced in a probability of an increase in the federal funds rate target to 38%, a sharp jump from less than 10% before Warsh appeared before the Senate Banking Committee. Bloomberg Economics' sentiment index of Fed officials shows that the current overall degree of hawkishness among decision-makers is the highest since the 2023 interest rate hike cycle, and among the seven voting members, there is a clear hawkish tendency. Although this interest rate increase is not a baseline scenario, this logic chain is quietly circulating in the market: If Washer uses an interest rate increase to consolidate its anti-inflation credibility, it may squeeze the inflation premium embedded in long-term interest rates, thereby driving down mortgage rates, car loan rates and other entity borrowing costs - this is the result that the White House really desires. However, practical constraints cannot be ignored. The latest inflation data shows that price pressures have eased. The five working groups announced by Warsh are conducting a comprehensive review of the Fed's operations. The results are expected to be released before the end of the year. The timing of the sudden tightening of monetary policy before the review conclusions are released is quite subtle. Additionally, Warsh holds only one vote on the FOMC, with seven votes needed to change policy rates. Even if there is no interest rate increase this week, the market's mainstream judgment is that Warsh is systematically strengthening his anti-inflation credibility, and this in itself may be the most powerful prerequisite for lowering long-term interest rates. After Hynix and Samsung’s $700 billion investment, Bernstein shouted: Storage correction is the buying point At the AI Summit hosted by the Korean government in San Francisco, global storage giants and chip designers signed long-term cooperation agreements totaling hundreds of billions of dollars. The AI computing power supply chain is shifting from "on-demand procurement" to "ultra-long-term capacity lock-in." SK Hynix and Nvidia signed a letter of intent for cooperation worth more than US$500 billion, covering storage supply and a 2GW Vera Rubin DSX AI factory project planned to go online for SK Telecom in 2027. Samsung Electronics has reached a US$200 billion strategic memorandum with Broadcom to lock in high-bandwidth memory (HBM) supply and advanced foundry services below 2 nanometers until 2030. After the announcement of this series of agreements, the well-known institution Bernstein reiterated its bullish stance on the storage sector, maintaining the "outperform" rating of Samsung Electronics, SK Hynix and Micron Technology, and pointed out that the recent correction of the sector provides a "good entry opportunity." Bernstein's analyst team, led by Mark Li, noted that the storage partnership covers "long-term technology development and stable supply of next-generation AI memory" and is intended to help SK Hynix "expand its growth base." Bernstein clearly pointed out in the report that the announced amounts of these agreements mainly point to the storage link, reflecting the urgent need of Nvidia and Broadcom to "ensure storage supply."
UBS: Intel's foundry business narrative continues to improve, but high capital expenditures limit valuation space UBS said in its latest research report that Intel's second-quarter results and third-quarter guidance were better than investors' previous expectations. Increased wafer output and shortened production cycles have eased supply bottlenecks, and the outlook for the manufacturing business continues to improve. However, product competitiveness, capital expenditure financing and potential shareholder dilution risks have not been eliminated, so we maintain a "neutral" rating and a target price of US$121. UBS believes that server CPU supply will improve significantly by the end of the third quarter, creating conditions for revenue acceleration in the fourth quarter. As inference and agent AI workloads grow, the ratio of CPU to GPU purchases is approaching parity, and server CPU industry shipments are expected to maintain double-digit growth at least until 2028. The annualized revenue of Intel's custom ASIC business has risen from US$1 billion in the fourth quarter of 2025 to approximately US$2 billion, and may exceed US$4 billion in the future. In terms of foundry business, Intel has promised to promote the 14A process into mass production in 2028. UBS believes that this may mean that the company has received support from potential customers. The company raised its capital expenditure forecast for 2026 from approximately US$17 billion to US$20 billion, and expected a significant increase in 2027, which may be close to US$30 billion. UBS raised Intel's earnings per share forecast from 2026 to 2028 to US$1.56, US$2.17, and US$2.82, but believes that high investment and free cash flow pressure limit further upside. After going sideways in July, it soared 20% and approached a new high. Options before Apple’s financial report suddenly showed a “bullish” signal. Before Apple’s big performance test, the options market is sending out unusual bullish signals. With the U.S. stock market as a whole in two months of volatility, Treasury yields hitting new highs, and Google and Tesla’s earnings reports both disappointing the market, Apple has become the only stock among the top ten S&P 500 stocks whose stock price is close to its all-time high. Apple will announce its latest fiscal quarter results after the U.S. stock market closes on Thursday. Prior to this, big funds in the options market were buying in-the-money call options on a large scale, and speculative funds were betting that the stock price would break through a record high before this Friday. At the same time, the post-earnings volatility implied by option pricing is close to 4% - a figure that far exceeds the historical volatility level of about 1% on average over the past year. According to Cboe LiveVol data, this is an unusually large implied volatility. Apple's stock price was almost stagnant in the first seven months of this year, but it has risen about 20% since the lows in late June and is less than $2 from its latest all-time high set two weeks ago. When the market as a whole is under pressure, Apple is regarded as a rare safe haven by the market, and its boost to market sentiment is highly anticipated. Goldman Sachs: Nokia optical network orders accelerate, AI and cloud demand support growth, but valuation space is limited Goldman Sachs said in its latest research report that Nokia's second-quarter revenue was in line with market expectations and was 16% higher than expected earnings before interest and tax. Calculated on a fixed exchange rate and comparable basis, the group's sales increased by 9% year-on-year, of which optical networks and IP networks increased by 20% and 16% respectively. If the fixed wireless access terminal and enterprise campus edge business had not been classified as discontinued operations, sales would have increased by 66 million euros, but comparable EBIT would have decreased by 13 million euros. AI and cloud demand have become core driving forces. Nokia received 2.8 billion euros in orders from relevant customers in the second quarter, a significant increase from the 1 billion euros in the first quarter, and about half of it is expected to be converted into revenue in the next 12 months; AI and cloud business sales more than doubled year-on-year, mainly driven by data center interconnection and extended network demand. Indium phosphide wafer and memory supply remains tight, and customers are locking in capacity through long-term orders. The AI-RAN platform cooperated by the company and NVIDIA plans to launch a pilot program at the end of 2026 and be put into commercial use in 2027. In order to alleviate the bottleneck of optical device production capacity, Nokia has acquired NXP's Arizona factory site. The San Jose factory is expected to enter mass production by the end of the year, and Pennsylvania's advanced testing and packaging capabilities will be expanded approximately tenfold. At the same time, the company expects to incur restructuring charges of approximately 800 million euros in 2026.
Goldman Sachs believes that optical network and IP network orders are strong, but the recent growth of mobile infrastructure still requires caution, and it lowers its revenue forecast from 2026 to 2030 by 0% to 2%, and its earnings per share forecast by 1% to 2%. The bank maintained a "neutral" rating and lowered the target prices of European stocks and ADRs from 8.9 euros and 10.4 U.S. dollars to 8.5 euros and 9.7 U.S. dollars respectively.