--- title: "U.S. Stock Market Outlook | Three major index futures mixed ahead of the Federal Reserve's interest rate decision, Microsoft and Meta to announce earnings after hours" type: "News" locale: "en" url: "https://longbridge.com/en/news/294204739.md" description: "On July 29th, before the US stock market opened, the three major stock index futures showed mixed results. The market is focused on the upcoming interest rate decision from the Federal Reserve, with rising expectations for interest rate hikes causing anxiety among traders to hedge. Additionally, Microsoft and Meta will announce their earnings after the market closes, and European stock markets and oil prices are also experiencing fluctuations" datetime: "2026-07-29T12:07:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294204739.md) - [en](https://longbridge.com/en/news/294204739.md) - [zh-HK](https://longbridge.com/zh-HK/news/294204739.md) --- # U.S. Stock Market Outlook | Three major index futures mixed ahead of the Federal Reserve's interest rate decision, Microsoft and Meta to announce earnings after hours ## Pre-Market Market Trends 1. As of July 29 (Wednesday), U.S. stock index futures are mixed before the market opens. As of the time of writing, Dow futures are down 0.38%, S&P 500 futures are up 0.19%, and Nasdaq futures are up 0.25%. ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260729/1785326589793213.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) 1. As of the time of writing, Germany's DAX index is up 0.30%, the UK's FTSE 100 index is up 0.32%, France's CAC 40 index is down 0.50%, and the Euro Stoxx 50 index is down 0.20%. ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260729/1785326519489634.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) 1. As of the time of writing, WTI crude oil is up 4.33%, priced at $82.69 per barrel. Brent crude oil is up 3.91%, priced at $85.29 per barrel. ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260729/1785326556711101.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) ## Market News **Beware of a "surprise rate hike" from the Federal Reserve tonight! Multiple Wall Street institutions are sounding the alarm, and traders are historically "hedging against anxiety."** Federal Reserve Chairman Kevin Warsh will announce his second rate decision since taking office at 2 AM Beijing time on Thursday, as global capital markets hold their breath in anticipation of an unprecedented suspense. Just a month ago, the market was almost certain that there would be no action in July; now, the CME FedWatch tool shows that the probability of a 25 basis point rate hike has surged from 13% a week ago to 30%. Citigroup bluntly stated that this is "the moment of greatest divergence since September 2024." Even more concerning is that the open interest in federal funds futures reached 909,714 contracts last Friday and further soared to 967,136 contracts on Monday, setting a new historical record. "In the past, by this time before the meeting, market expectations for policy outcomes were usually highly consistent," but this time is completely different. According to BMO Capital Markets, since 2015, the average prediction error for traders on the final rate decision the day before the Federal Reserve's decision has only been 2.4 basis points—this time, the error could be measured in "digits." **The AI wave is distorting economic signals, posing a risk of "misjudgment" for central bank decisions.** Economists at the Bank for International Settlements warn that the rise of artificial intelligence is distorting the economic signals that central banks rely on to formulate monetary policy, with effects strong enough to "reshape the global outlook in real-time," driving growth amid trade tensions and geopolitical crises, while also increasing the risk of policy errors. In the short term, AI has the effect of pushing inflationary pressures, with U.S. spending on data centers and information technology manufacturing facilities rising to 0.8% of GDP, and the wealth effect from rising stock markets further stimulating consumer spending; these "significant and visible" impacts are fermenting However, AI may also bring about deflationary effects. If it significantly enhances productivity, concerns over job losses could suppress spending and weaken workers' bargaining power, leading to a reduction in price pressures. However, these more sustainable productivity improvements are "uncertain and difficult to measure," and are expected to manifest more gradually. The rise in uncertainty directly increases the risk of "miscalibration" in monetary policy. If central banks overestimate productivity gains or underestimate the strength of potential demand, they may keep interest rates too low, making it difficult to effectively curb inflation. Federal Reserve Chairman Waller believes that AI is driving the U.S. into a productivity renaissance, allowing for a reduction in borrowing costs without stimulating inflation. However, inflation remains well above the Federal Reserve's target, and some officials warn that investments in data centers and AI-related demand are temporarily pushing up prices, putting pressure on Waller to demonstrate a commitment to controlling inflation. The Chief Economist of the European Central Bank also pointed out that the ultimate impact of AI depends on whether the technology replaces labor or helps increase production, whether energy supply can match electricity demand, and whether AI activities will continue to concentrate in a few countries. Assessing its comprehensive impact on inflation will become a significant challenge for central banks in the coming years. **Opposition parties criticize "the country has become a casino"! Kospi plummets 40%, South Korean finance minister holds emergency meeting tonight to stabilize the market.** South Korea will hold an emergency meeting on Wednesday evening to discuss the market situation after the stock market crash wiped out hundreds of billions of dollars in investor assets. According to lawmaker Yoo Dong-soo, the meeting will be chaired by South Korean Finance Minister Choo Kyung-ho, and all top financial officials will attend, starting at 6 PM local time. On Wednesday, senior government officials faced multiple rounds of questioning from lawmakers in the South Korean National Assembly. Lawmakers believe that the stock market crash is partly due to the single-stock leveraged products launched in May. During the hearing, Choo Kyung-ho expressed regret and acknowledged that regulatory authorities should have conducted more prudent reviews before the launch of these products. However, he insisted that leveraged exchange-traded funds (leveraged ETFs) are just one of several triggers for the recent market turmoil. Choo Kyung-ho told lawmakers on Wednesday, "We have launched a package of response measures, but if necessary, we will take additional steps to help the market return to normal." Currently, the Korea Composite Stock Price Index (Kospi) has plunged about 40% from its June peak. **Military conflict between the U.S. and Iran escalates again, joint strikes on Iraq push up oil prices.** International oil prices surged on Wednesday, driven mainly by the U.S. and Saudi Arabia's joint military strikes on Iraq, as well as Iran's launch of ballistic missiles at U.S. forces in the Middle East. The U.S. Central Command confirmed that it successfully intercepted ballistic missiles launched by Iran at U.S. forces in the Middle East, characterizing the attack as an "attempted raid." The Iranian Revolutionary Guard subsequently stated that it had launched multiple missiles at U.S. air bases and Central Command command centers located in Jordan in response to previous U.S. strikes against Iraqi armed groups supported by Iran. Meanwhile, Saudi Arabia announced that its armed forces coordinated with the U.S. Central Command to carry out "targeted strikes" against Iranian-backed armed groups in Iraq, accusing these groups of launching drone attacks on Saudi oil facilities. ING analysts pointed out that the latest developments have significantly weakened market expectations for a rapid easing of tensions in the Persian Gulf On the supply side, data from the American Petroleum Institute shows that as of the week ending July 24, U.S. crude oil inventories decreased by approximately 3.3 million barrels, further supporting oil prices. Additionally, sources indicate that OPEC+ may pause production increases for three months starting in October, after the organization has completed its planned return to voluntary production cuts. The market is awaiting the official inventory data to be released by the U.S. Energy Information Administration later on Wednesday to further assess the supply-demand dynamics. **Reports indicate that the Houthi armed group in Yemen is considering imposing fees on vessels passing through the Red Sea.** According to sources, the Houthi armed group is contemplating charging fees for commercial ships navigating the southern waters of the Red Sea. The Houthis announced a maritime blockade against Saudi Arabia on July 20, opening a new front against the U.S. and its allies, and expanding the range of attacks on tankers carrying global energy and other goods beyond the Gulf waters. Sources say the Houthis are studying the imposition of fees on most vessels passing through the Bab el-Mandeb Strait, although the timing for implementing such measures has not yet been determined. The Houthi media office has not yet responded. Sources indicate that this move aims to normalize the practice of charging fees for international waterways and to increase pressure on the U.S. On the other hand, a senior Iranian official stated that Tehran has formally rejected Oman’s proposal for a joint management scheme in the Strait of Hormuz, believing that the plan has no chance of success. Iran refuses the participation of other countries in the management of the strait, insisting that only Iran and Oman can decide on arrangements based on their respective shares of the waters. Iran insists that all inbound shipping channels and some outbound channels through the Strait of Hormuz must remain under Iranian control. **Smartphone memory prices surged over 80% in Q2, with DRAM surpassing SoC to become the most expensive component in flagship devices, putting pressure on BOM costs.** According to Counterpoint Research, smartphone memory prices increased by over 80% quarter-on-quarter in Q2 2026, having a lasting structural impact on the BOM costs of end devices. The BOM cost of flagship models increased by nearly 50% year-on-year, with DRAM surpassing SoC to become the most expensive single component in flagship smartphones. The introduction of future 2nm flagship SoCs will further drive up BOM costs for flagship models, placing greater cost pressure on OEM manufacturers. Even if OEMs raise retail prices for end products, overall gross margins are expected to remain slightly below the levels of the same generation flagship products in 2025, as rising costs are difficult to fully cover through pricing adjustments. ## Individual Stock News **After Alphabet (GOOGL.US) faced setbacks, can Microsoft (MSFT.US) and Meta (META.US) escape the "curse" of AI capital expenditures tonight?** Microsoft and Meta Platforms Inc. are set to release their earnings reports, while the market is increasingly losing patience with the significant investments these tech giants are making in artificial intelligence (AI) and the resulting depletion of their cash reserves. Both companies are scheduled to announce their results after the U.S. market closes on Wednesday. Although external expectations suggest that both will maintain rapid growth, this is not the focus of Wall Street's attention. Last week, Alphabet Inc. delivered better-than-expected results across multiple metrics, yet its stock price recorded the largest single-day drop in over a year, due to the company's first negative cash flow since its IPO and sharply rising capital expenditures Microsoft and Meta, along with Alphabet and Amazon (AMZN.US), belong to the group with the largest investments in AI. However, the market believes that Microsoft and Meta are not as strong in industry leadership as Alphabet, so the scrutiny of their financial reports may be more stringent. Since the beginning of this year, Microsoft's stock price has fallen by 19%, making it one of the worst-performing stocks in the Nasdaq 100 index, which has risen 10% so far in 2026. Meta's stock price has dropped 10% during the same period, while Amazon (scheduled to announce its earnings on Thursday Eastern Time) has remained basically flat. **SK Hynix (SKHY.US) refutes concerns about a slowdown in AI investment: it will remain robust after next year.** SK Hynix stated during its second-quarter earnings call: "We have noticed that there are concerns about a potential slowdown in AI infrastructure investment due to some large tech companies re-evaluating their data center leasing businesses and the rise of efficient AI models. We believe these actions are not a process of cutting AI investment, but rather a process of improving utilization and accelerating the monetization of large-scale AI infrastructure." SK Hynix stated that the proliferation of efficient AI models is unlikely to lead to a decrease in demand for infrastructure and memory. As the efficiency of models and systems improves, more users can access various services on the same infrastructure, thereby expanding the accessibility and coverage of AI services. Given that even recently launched efficient AI models have explosive user demand, the improvement in efficiency is promoting the proliferation of services and increasing overall utilization. SK Hynix also confirmed the sustainability of AI investment in discussions with major customers regarding medium- to long-term demand. It believes that AI infrastructure investment will remain robust after next year. **GlobalFoundries (GFS.US) receives $300 million support from the U.S. Department of Commerce to accelerate silicon photonics technology development for AI infrastructure.** On July 29, GlobalFoundries announced that it has signed a letter of intent with the U.S. Department of Commerce to accelerate the development of next-generation silicon photonics technology. According to the agreement, the U.S. Department of Commerce is expected to provide $300 million in funding to GlobalFoundries to advance the research and development of advanced optical materials, wafer technology, and advanced packaging to support the next-generation optical interconnect technology required for AI and high-performance computing data centers. As part of the agreement, the U.S. Department of Commerce will also acquire approximately 1% equity in GlobalFoundries, allowing the U.S. public to share in the company's future growth benefits. GlobalFoundries stated that it will accelerate the scale-up manufacturing of silicon photonics technology based on its existing facilities in Malta, New York, and Burlington, Vermont. **"AI energy stock" Bloom Energy (BE.US) reports quarterly revenue exceeding $1 billion for the first time, significantly raises full-year guidance, CEO states on the call: chips without power are inventory.** With the global surge in AI infrastructure construction, as a "water seller" in the underlying energy supply, "AI energy stock" Bloom Energy has delivered its first-ever "quarterly revenue exceeding $1 billion" with an unexpected performance, and has significantly raised its performance guidance for 2026. Data shows that Bloom Energy's total revenue in the second quarter reached a record $1.065 billion, a year-on-year increase of 166%, significantly exceeding Wall Street's previous expectation of $826 million; Non-GAAP diluted earnings per share (EPS) were $0.78, far exceeding analysts' expectations of $0.41. Based on strong order conversion, the company raised its full-year revenue guidance for 2026 from $3.4 billion to $3.8 billion, significantly up to $3.9 billion to $4.2 billion; the full-year adjusted operating profit guidance was also doubled from the beginning of the year’s $425 million to $450 million, now set at $800 million to $900 million. During the conference call, CEO Sridhar made a striking statement regarding the company's positioning in the AI data center market: “Today, all major hyperscale cloud providers in the U.S., as well as over a dozen emerging cloud providers, AI labs, and managed data center operators in the U.S., have validated and approved our power solutions for their AI factories.” Sridhar also described the current pain points in impactful language: “Bloom is increasingly seen as the solution to eliminate the friction points of AI power availability. Chips without power are inventory, not intelligence.” **United Microelectronics Corporation (UMC.US) reported second-quarter revenue of $2.18 billion, achieving a milestone in silicon photonics business.** UMC disclosed its second-quarter operating report for 2026, showing a GAAP earnings per share of $0.54; revenue reached $2.18 billion, equivalent to NT$68.73 billion, an increase of 8.5% year-on-year, and $80 million higher than market expectations. The net profit attributable to shareholders of the parent company reached NT$42.26 billion, equivalent to $1.34 billion. UMC's CEO Jason Wang pointed out that benefiting from strong demand in the communications and consumer markets, wafer shipments increased by 10.6% quarter-on-quarter, with capacity utilization rising to 85%. Revenue from the 22/28 nanometer business reached a new historical high, with 22 nanometer-related revenue accounting for 17.5% of total quarterly sales. The company achieved significant progress in technology research and development, having delivered 12-inch photonic integrated circuits in bulk to customers, validating the mass production capability of 12-inch wafer silicon photonics, laying the foundation for launching a silicon photonics business platform for general customers in 2027. The company also released its operating guidance for the third quarter of 2026, expecting wafer shipments to achieve high single-digit growth, with average selling prices in U.S. dollars remaining strong; gross margin is expected to fall in the mid-range of 30%, and capacity utilization is expected to further rise to over 90%. In terms of capital expenditure planning, the company confirmed its total capital expenditure for 2026 to be $2 billion. **Procter & Gamble (PG.US) reported a decline in fourth-quarter profits, with a cautious outlook for the year.** Procter & Gamble's latest quarterly profits declined, primarily due to rising costs and weak sales, putting pressure on earnings. The consumer goods giant, which produces Crest toothpaste and Pantene shampoo, also released a more conservative performance guidance for the current fiscal year, predicting profits and sales below Wall Street expectations. Data shows that net profit for the fourth quarter was $3.04 billion, or $1.26 per share, down from $3.62 billion, or $1.48 per share, in the same period last year. The profit decline was mainly due to increased selling, general, and administrative expenses, which outweighed the positive effects of a slight increase in sales The adjusted earnings per share were $1.43, exceeding analysts' expectations of $1.41. Sales grew by 2% year-on-year to $21.2 billion, slightly below analysts' expectations of $21.38 billion. Looking ahead to the new fiscal year, the company expects adjusted earnings per share growth to be between 0% and 3%, with a midpoint estimate of about $7, while analysts expect $7.02. The company anticipates that full-year earnings per share will face headwinds of about $0.56, primarily due to rising costs of raw materials, energy, and transportation, as well as increased net interest expenses and adverse currency fluctuations. Procter & Gamble expects full-year sales growth to be between 1% and 3%, with a midpoint estimate of about $88.77 billion. Analysts expect full-year sales to be $89.4 billion. ## Important Economic Data and Event Forecast Beijing time 22:30: U.S. EIA crude oil inventory change for the week ending July 24. Beijing time the next day 01:30: Bank of Canada releases monetary policy meeting minutes. Beijing time the next day 02:00: Federal Reserve FOMC releases interest rate decision. 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