Pre-Market Market Trends

On July 24th (Friday), U.S. stock index futures rose across the board before the market opened. As of the time of writing, Dow futures were up 0.46%, S&P 500 futures were up 0.25%, and Nasdaq futures were up 0.15%.

As of the time of writing, the German DAX index was up 1.03%, the UK FTSE 100 index was up 0.18%, the French CAC40 index was up 0.42%, and the Euro Stoxx 50 index was up 0.70%.

As of the time of writing, WTI crude oil was down 2.44%, priced at $89.94 per barrel. Brent crude oil was down 2.81%, priced at $97.86 per barrel.

Market News

Trump threatens "massive attack" on Iran, global inflation alarm sounds again. Trump stated that he is considering launching a "massive attack" on Iran to force it back to the negotiating table, a move that could further drive up energy prices that are already putting pressure on the global economy. In an interview, Trump said he is "close to making a decision," and the level of attack will be "beyond anything seen before." Reports quote him saying that Iran is not yet ready to reach an agreement, "they have not suffered enough." This statement highlights the dilemma Trump faces—previously reignited hostilities have led to the collapse of a temporary ceasefire, and the Strait of Hormuz is nearly blocked. On Thursday, Trump warned on Truth Social that if Iran and its supported Houthi forces in Yemen attack merchant ships, they will face "significant military punishment." This week, the Houthis claimed to have attacked Saudi oil tankers, opening a new front in a conflict that has already pushed oil prices above $100 per barrel and U.S. retail gasoline prices above $4 per gallon. According to foreign media citing Iranian and Iraqi officials, the Iraqi Prime Minister brought Trump's ceasefire proposal to Iran, but Iran rejected it on Thursday, further thwarting mediation efforts.

Trump initiates new tariff arrangements. The Office of the United States Trade Representative (USTR) announced on the 23rd local time that it would impose tariffs of 10% to 12.5% on dozens of countries and regions under Section 301 of the Trade Act of 1974, under the guise of "forced labor," to replace the soon-to-expire global import tariffs. The new tariffs will take effect at 12:00 PM Beijing time on the 24th Black Sea and Red Sea in Double Emergency! U.S. Oil Faces Frenzied "Buying Spree" from Asian and European Buyers, WTI Premium Soars. The rising demand for U.S. crude oil from Asia and Europe is one of the first signs of increasing concerns about oil supply adequacy amid frequent geopolitical hotspots. The Iran-backed Houthi forces attacked two Saudi oil tankers in the Red Sea, adding new volatility factors to the Iran conflict. Meanwhile, after Ukrainian drone attacks on Black Sea shipping, Kazakhstan has cut oil production, prompting buyers to seek similar grades of crude oil, including supplies from the Permian Basin. According to traders, on Thursday, September-loaded WTI crude oil delivered along the U.S. Gulf Coast was priced at a premium of about $5 per barrel over the global benchmark oil price. The day before, this price difference was a discount of $2. Since the U.S. and Israel sparked the Iran conflict in late February, U.S. crude oil has maintained strong demand due to its distance from the war zone. Data from Kpler Ltd shows that U.S. oil exports surged to a historic high of 5.66 million barrels per day in May, highlighting its role as the "last supplier."

Surging Oil Prices Reignite Inflation Threats, Global Bond Market Faces New Round of Intense Selling. As the situation in the Middle East escalates, pushing international oil prices above $100, inflation concerns have resurfaced, leading to a new round of intense selling in the global bond market. Investors who previously bet on a bottoming out of the bond market adjustment have suffered losses again, and major global central banks will face critical credibility tests. This round of global bond market selling is unprecedented, with the average yield of the Bloomberg Global Government Bond Index, which tracks the performance of sovereign bonds from investment-grade countries, soaring to 3.68%, surpassing the three-year high and reaching the highest level since the 2008 global financial crisis. This benchmark index is currently facing its largest monthly decline since March. If the bond market selling trend continues to escalate, it will trigger a series of chain risks: the global debt sustainability issue will become increasingly prominent, global corporate financing costs will rise further, and market funds may begin to shift from the stock market to other assets, leading to cross-asset volatility.

Cracks Widen in AI Bull Market! Analysts Advise: Stay Away from "Bleeding" Tech Giants, Buy Chip Stocks. As U.S. tech giants collectively pull back, Ben Reitzes, head of technology research at Melius Research, advises investors to avoid mega-scale cloud service providers like Alphabet (GOOGL.US), Meta (META.US), and Amazon (AMZN.US), as these companies have failed to generate substantial cash flow. In an interview, he stated, "I still don't have a positive outlook on mega-scale data center operators for a simple reason: they cannot generate truly valuable cash flow. Who cares? Buy chip companies instead." On Thursday, the U.S. tech sector faced selling pressure, with the combined market value of the "seven giants" evaporating nearly $800 billion in a single day. Among them, Google's parent company Alphabet fell by 7%, and Tesla plummeted about 15%, marking the worst single-day performance in over a year. These two companies had just released their earnings reports, and massive capital expenditures raised market concerns, with free cash flow turning negative facing strict scrutiny from investors. Reitzes believes that investors should reduce their focus on the growing capital expenditures and pay more attention to the profit margin pressures these investments bring The AI debt tsunami combined with oil price shocks has led to a comprehensive retreat of tech bonds under "multiple pressures." Concerns about the continuous expansion of debt driven by the market's AI investment frenzy have reignited, compounded by escalating conflicts in the Middle East, causing bonds of several large U.S. tech companies to collectively decline on Thursday. As inflation worries intensify, long-term Treasury yields have risen, further increasing the financing costs for companies that have already invested hundreds of billions in AI development. The massive borrowing for AI investments—amounting to approximately $350 billion so far this year—has exerted persistent pressure on the bond market, with signs that investors are struggling to absorb the vast amounts of new debt. At the same time, there is widespread skepticism about whether AI can generate sufficient profits to cover the high costs. Another sign of rising risk aversion is that, according to LSEG Lipper data, investors withdrew $7.1 billion from U.S. investment-grade bond funds in the week ending Wednesday, marking the largest single-week outflow since the early days of the COVID-19 pandemic in April 2020.

Individual Stock News

NVIDIA reportedly plans to raise prices on GDDR6 and GDDR7 memory kits. According to reports, NVIDIA (NVDA.US) has issued a price increase notice to its board partners, affecting GDDR6 and GDDR7 memory kits. It is understood that NVIDIA sells products to board partners by bundling GPU chips with VRAM (video memory) chips into kits, while partners are responsible for installing these chips onto their own designed PCBs (printed circuit boards) to produce custom graphics cards. With the price of GDDR6 and GDDR7 memory kits set to rise again, AIB (Add-in Board) manufacturers will have no choice but to correspondingly increase the prices of graphics cards.

The 944 billion won divorce case "comes to a close"! Cash settlement avoids split crisis, SK Hynix (SKHY.US) alarm lifted. After nearly ten years, the "century divorce case" of SK Group Chairman Choi Tae-won and his ex-wife Ryu Soo-young (daughter of former South Korean President Roh Tae-woo) has reached its latest ruling. The court ultimately ruled that Choi Tae-won must pay his ex-wife 944 billion won (approximately $644 million / 4.37 billion RMB) in cash property division. This hefty ruling quickly drew significant attention from global capital markets towards SK Group and its core semiconductor giant—SK Hynix. In terms of property division, the court adopted a compensation method, allowing Choi Tae-won to retain his stock while compensating the cash difference owed to Ryu Soo-young. This move was made to maintain corporate governance and ensure stability in the company's governance structure. The court ultimately clarified that the division payment would be made in "cash," which is a significant positive for SK Hynix.

The AI computing power wave drives soaring CPU demand, and doubts about foundry business are completely dispelled; Intel (INTC.US) Q2 revenue sees the strongest growth in fifteen years. According to the financial report, for the second quarter ending June 27, Intel achieved revenue of $16.13 billion, a year-on-year increase of 25.4%, marking the strongest quarterly revenue growth since 2011; adjusted earnings per share were $0.42, with an adjusted gross margin of 41.8%, significantly up 12 percentage points from the same period last year In comparison, the market's original average revenue expectation was only $14.42 billion, with earnings per share of $0.21 and a gross margin expectation of 38.8%. Management emphasized that this marks the company's seventh consecutive quarter of performance exceeding financial guidance, with demand across all business units continuing to outstrip the growing supply. Even more exciting for investors is the guidance for the third quarter. Intel expects revenue for the quarter to reach between $15.8 billion and $16.8 billion, and even the lower end of this range easily surpasses analysts' average estimate of $15.1 billion; adjusted earnings per share are expected to be $0.38, also well above the market expectation of $0.27.

Oracle (ORCL.US) secures a ten-year software contract with the U.S. Department of Defense, valued at nearly $7 billion. The U.S. Department of Defense announced on Thursday that it has signed a long-term enterprise software agreement with software giant Oracle, with a total value of nearly $7 billion. Boosted by this news, Oracle's stock price rose about 3% in after-hours trading. The contract, named the "Enterprise Software Agreement," was negotiated by the U.S. Navy and aims to consolidate the disparate on-premises software licenses of various departments within the U.S. Department of Defense, the U.S. Coast Guard, and the intelligence community into a single contract. The base term of the agreement is 5 years, with an additional 5-year renewal option, covering both perpetual and subscription software licenses, maintenance, and consulting services. As of Friday pre-market, the company's stock price had risen nearly 4%.

Due to "chip inflation," Apple (AAPL.US) demands a 20% price reduction on OLED panels for the high-end iPhone 18. Due to the continuous surge in memory chip prices driving up the overall cost of the iPhone, Apple is pressuring upstream suppliers to significantly lower the prices of OLED screens. On July 24, foreign media reported that Apple has requested panel suppliers to price the OLED panels used in the iPhone 18 Pro Max at around $70, a decrease of about 20% compared to the previous generation. Industry insiders estimate that the average price of panels currently supplied by Samsung Display and LG Display is $66.5, even lower than Apple's pricing.

The 2027 deadline accelerates customer "cloud migration," with SAP (SAP.US) Q2 cloud business exceeding expectations with a 24% growth. German software giant SAP SE announced on Thursday that driven by customers rushing to migrate from on-premises licenses to the cloud before the company stops supporting older software versions, its cloud business revenue grew by 24% year-over-year in the second quarter, reaching €6.28 billion (approximately $7.1 billion), surpassing the market-compiled average analyst expectation of €6.26 billion. For the quarter ending June 30, the German enterprise software giant recorded earnings per share of $2.15, exceeding the consensus estimate of $2.00. Second-quarter revenue grew by 9% year-over-year to $11.24 billion, roughly in line with expectations. The current cloud backlog increased by 26% year-over-year to $26.06 billion, also exceeding the market expectation of a 23.8% increase The AI computing power battle has spread to "advanced packaging": Nvidia (NVDA.US) invests $1.5 billion to strengthen Amkor Technology (AMKR.US) and jointly expand the Arizona packaging and testing plant. Nvidia has signed a $1.5 billion agreement to help solidify Amkor's chip packaging factory, which is part of a broader initiative to expand semiconductor operations in the United States. According to a statement on Thursday, the agreement involves a prepayment from Nvidia that will help Amkor enhance its manufacturing capabilities in Arizona. The two companies stated that this collaboration will focus on chip packaging and testing technology in the field of artificial intelligence.

American Express (AXP.US) Q2 revenue misses expectations. GAAP earnings per share were $4.53, exceeding expectations by $0.13; revenue was $19.64 billion, falling short of expectations by $60 million. The total credit loss provision was $1.1 billion, down from $1.4 billion a year ago. American Express raised its revenue growth forecast for fiscal year 2026 to 10%.

Important Economic Data and Event Forecast

Beijing time 21:45 U.S. July SPGI Manufacturing PMI preliminary value, U.S. July SPGI Services PMI preliminary value, U.S. July SPGI Composite PMI preliminary value