U.S. Stock Market Outlook | Three major index futures mixed, U.S. inflation data to be revealed this week, Intel pre-market down over 3%

Pre-Market Market Trends

1. As of August 10 (Monday), U.S. stock index futures are mixed before the market opens. As of the time of writing, Dow futures are down 0.08%, S&P 500 futures are down 0.01%, and Nasdaq futures are up 0.02%.

1. As of the time of writing, the German DAX index is up 0.11%, the UK FTSE 100 index is down 0.24%, the French CAC 40 index is up 0.10%, and the Euro Stoxx 50 index is up 0.46%.

1. As of the time of writing, WTI crude oil is up 1.73%, priced at $79.53 per barrel. Brent crude oil is up 1.75%, priced at $85.01 per barrel.

Market News

Inflation data collides with AI infrastructure earnings reports, U.S. stocks face a "double test" this week after reaching new highs. The first week of earnings season for tech giants has concluded, and market performance has exceeded investor expectations. Although initial results were mixed, overall sentiment has turned optimistic as concerns about AI capital expenditures gradually dissipate. Following the unexpected release of non-farm payroll data last Friday, expectations for a Federal Reserve rate cut have been recalibrated, leading to a strong close for U.S. stocks over the weekend. As earnings season enters its second half, market focus will continue to be pulled in two directions: first, more companies will disclose their earnings, and second, whether economic data can provide calibration for the Federal Reserve, which is on the edge of "raising rates or holding steady." The Consumer Price Index (CPI) to be released this Wednesday has been highlighted by the market. Economists expect both overall CPI and core CPI (excluding energy and food) to rise by 0.2% month-on-month. On Thursday, wholesale inflation data will be released, with the Producer Price Index (PPI) also expected to show a higher increase than last month. The week's economic data will conclude with Friday's retail sales and University of Michigan consumer survey data. On the corporate side, the earnings schedule is relatively quiet this week: Cava Group (CAVA.US) on Tuesday, cloud infrastructure provider Nebius Group (NBIS.US) and Cerebras Systems (CBRS.US) on Wednesday, and Applied Materials (AMAT.US) on Thursday will successively release their earnings.

South Korea invests 50 trillion won to establish a special fund targeting semiconductor materials and fabless companies. According to reports, South Korean Chief of Staff Kang Hoon-sik stated on Monday that South Korea will launch a new 50 trillion won (approximately $35.2 billion) semiconductor fund, focusing on investing in promising chip materials, components, and fabless companies, which is also part of the government's plan to build a chip cluster Kang also announced that the government will provide 50 trillion won in trade financing to support export-oriented suppliers and aims to push for the passage of the "Super Large Special Industrial Park Law" within the year to accelerate the approval of permits, environmental assessments, and infrastructure construction in related areas. In addition, the government plans to secure 650,000 tons of water supply for semiconductor projects in the Hunan region by 2030, while the Yongin semiconductor cluster will receive a planned power supply of 14.7 billion watts by 2041.

U.S. Senator Issues "Ultimatum" to AI Giants: Pause Development or Congress Will Intervene. According to reports, U.S. Senator Sanders urged the CEOs of leading AI companies to pause AI development, warning that if no action is taken, lawmakers will intervene. The letter has reportedly been sent to OpenAI founder Sam Altman, Anthropic's Dario Amodei, and Zuckerberg. Sanders stated, "At a time when we have already seen humanity lose control and create potentially dangerous viruses, your companies are still racing ahead—investing billions of dollars in a technology that no one can fully understand, predict, or control." Currently, AI legislation, especially efforts led by progressives like Sanders, is unlikely to gain enough support in this Congress to become law. What can be expected now are symbolic bills and public pressure actions—and if the Democrats regain control of either chamber, there may be congressional investigations and subpoenas to hold tech CEOs accountable.

Bank of Japan Points to Upward Price Risks, Rate Hikes May Accelerate. The Bank of Japan noted in the summary of the July meeting minutes that inflationary upward risks are rising, with one committee member mentioning that the pace of rate hikes may accelerate. According to the summary of the July 30-31 meeting released on Monday, one of the nine committee members stated, "Given that the core CPI inflation rate has been consistently close to 2%, and that we should place greater emphasis on the upward risks to prices than before, it can be considered that the pace of policy rate hikes will be faster than the market expects." One member called for the Bank of Japan to demonstrate its determination to prevent inflation from deviating upward from its target, suggesting that larger rate hikes may be necessary, as central banks around the world are entering a rate hike phase. This member stated that the Bank of Japan "needs to adopt a flexible approach to respond to changes in the overseas financial environment and discuss the magnitude of rate hikes, rather than sticking to a certain pace of rate increases."

AI Investment Sparks Financing Boom! Goldman Sachs: U.S. Companies' Stock Issuance Expected to Reach Record Highs in 2026, but Buybacks Will Provide Strong Hedge. As artificial intelligence (AI) spending creates enormous financing demands, U.S. companies are issuing more stock to investors. According to Goldman Sachs, in the second quarter of this year, U.S. companies raised $252 billion through initial public offerings (IPOs), follow-on offerings, convertible securities, and SPACs, surpassing the previous quarterly record of $234 billion set in the first quarter of 2021. Among them, the follow-on offering scale in the second quarter reached $70 billion; as of July, the cumulative follow-on offering scale this year reached $105 billion, the highest level for the same period since 2021. However, Goldman Sachs strategist Ben Snyder pointed out that the increase in equity supply is more a return to normal levels rather than a surge in issuances that threaten the market Despite the huge issuance amount, Snyder stated that the current stock issuance volume is still below historical average levels relative to the overall stock market size. In addition, this year's issuance activities are highly concentrated. The top three IPOs and follow-on offerings account for nearly half of the cumulative issuance scale as of July.

The navigation prospects of the Strait of Hormuz remain unclear! Iran and Oman have not yet reached a new shipping route agreement, and a Saudi refinery has been attacked. As Iran and Oman have not yet reached an agreement on reopening the Strait of Hormuz, and the Yemeni Houthi armed group claims to have attacked a Saudi refinery near the Red Sea, oil prices continue to rise. Iranian Foreign Minister Abbas Araghchi stated this past weekend that Iran and Oman are "very close" to reaching an agreement to establish a shipping route across the Strait of Hormuz. However, he also reiterated that the establishment of a new shipping route between Iran and Oman does not mean the reopening of the Strait of Hormuz. This has lowered market expectations for a rapid recovery of energy transportation in the Middle East. According to reports, the Secretary of Iran's Supreme National Security Council, Zolghadr, stated that the Strait of Hormuz will remain closed if the United States does not change its behavior. The reopening of the Strait of Hormuz is contingent upon the U.S. meeting five conditions: permanently halting military actions against Iran and its regional allies, ceasing threats or insults towards Iran, lifting the maritime blockade and all sanctions against Iran, returning Iran's frozen assets, and compensating Iran for losses caused by related military actions. Additionally, the Iran-backed Yemeni Houthi armed group claimed responsibility for an attack on the Jizan refinery in Saudi Arabia. Meanwhile, a tanker operated by the Abu Dhabi National Oil Company was also attacked near the Strait of Hormuz over the weekend.

Wall Street's "8000-point camp" expands: JP Morgan raises S&P 500 target, AI profit realization reignites bull market confidence. JP Morgan on Monday raised its year-end target for the S&P 500 index from 7800 points to 8000 points, citing a robust corporate earnings outlook and the expectation that AI investments by large cloud service providers will drive faster revenue growth, thereby enhancing market confidence. The new target price implies about a 3.1% upside from the index's last closing level of 7757.64 points, joining the increasingly bullish wave—at least seven brokerages now expect the benchmark index to reach 8000 points by the end of 2026. JP Morgan analysts stated: "As high backlogs convert into confirmed revenue, cloud computing growth should receive strong support, helping to validate the increasing AI capital expenditures, strengthen order coverage, and further alleviate concerns about return on invested capital (ROIC)." The brokerage also raised its earnings per share forecast for the S&P 500 index from $350 to $365 for 2026, and from $390 to $420 for 2027.

Individual Stock News

Intel (INTC.US) plans to issue $15 billion in common stock to accelerate its layout amid the surge in AI data center demand. Intel recently announced that it will issue $15 billion in common stock to seize market opportunities arising from the surge in demand for artificial intelligence data centers, fully leveraging investors' renewed confidence in its business prospects. According to a statement released by Intel on Monday, the funds raised will be used for general corporate purposes Intel stated in a statement: "Continuous breakthroughs in emerging fields such as physical AI, dedicated chips, advanced packaging, and external wafers are bringing significant growth opportunities to Intel. This issuance aims to further enhance the company's ability to seize future growth opportunities while maintaining a robust balance sheet and adhering to its investment-grade credit rating commitment." As a result, Intel's stock price fell more than 3% in pre-market trading on Monday.

AI hardware demand proves resilient! TSMC (TSM.US) saw a 45% surge in July revenue, market volatility does not change its resilience. TSMC recently announced its July revenue data, showing that AI hardware demand remains strong and has not been significantly impacted by recent market fluctuations. As a core chip supplier for Nvidia (NVDA.US) and Apple (AAPL.US), TSMC's revenue for the month reached NT$467.58 billion (approximately $14.5 billion), a year-on-year increase of 45%. Analysts expect TSMC's revenue growth for this quarter to be around 46.8%. Last month, TSMC raised its full-year capital expenditure and revenue guidance, demonstrating confidence that the rapid growth in AI chip demand will continue until 2027 and beyond. The company currently expects capital expenditures to reach a record $60 billion to $64 billion in 2026, with full-year revenue growth (in USD) expected to be slightly above 40%.

Storage crisis intensifies, will Apple raise iPhone 17 prices today? The fall launch event is expected to be scheduled for September 9. According to reports, due to soaring storage chip costs, Apple may raise the prices of the iPhone 17 series ahead of August 10 (Monday), breaking the tradition of not adjusting prices before new product launches. Additionally, well-known Apple leaker Mark Gurman revealed that Apple is most likely to hold its fall launch event on September 9 this year. Previously, Apple CEO Tim Cook publicly warned of an industry crisis, defining the current rise in storage chip prices as a "once-in-a-century flood," making price increases inevitable. The core reason for the surge in storage chip prices is the global AI infrastructure boom, which has significantly squeezed chip supply in the consumer electronics sector, leading to continued price increases for core components such as DRAM and NAND flash memory, and sharply rising cost pressures in Apple's supply chain. Apple has already raised prices for several product lines, including iPad, Mac, Apple TV, Apple Vision Pro, and HomePod, but the prices of iPhone, AirPods, and Apple Watch remain unchanged. However, recent media reports indicate that Apple will adjust the prices of the iPhone 17 series on August 10, and production plans have also changed.

The five giants raked in $48 billion in the second quarter, attracting attention! Trump blasts "too much profit," and the shadow of windfall taxes on the oil industry re-emerges. Major oil companies experienced explosive profits in the second quarter. A key question now is whether the industry will use this unexpected windfall to reward shareholders, strengthen balance sheets, or invest for the future—while also striving to avoid increasing political backlash. Benefiting from rising fossil fuel prices amid the hostile situation between the U.S. and Iran, the five major oil giants—ExxonMobil (XOM.US), Chevron (CVX.US), BP (BP.US), Shell (SHEL.US), and Total (TTE.US)—generated up to $48 billion in profits from April to June During the same period, their cash generation reached nearly $90 billion, setting a historical high—surpassing even the levels after the outbreak of the Russia-Ukraine conflict in early 2022. This substantial profit has drawn the ire of environmental activists, who are once again calling for a windfall tax on the industry's excess profits; it has also sparked dissatisfaction from U.S. President Trump.

Massive investment layout! NVIDIA invests $3 billion in power company Lancium behind Stargate. According to reports, NVIDIA has agreed to invest up to $3 billion in Lancium, a power infrastructure developer backed by Blackstone Group (BX.US). It is reported that Lancium is also the power service provider for Texas's OpenAI and Oracle's artificial intelligence park "Stargate." The agreement will include an initial investment commitment of $2 billion, with an additional $1 billion to be added based on Lancium achieving specific grid access milestones. This deal values Lancium and its land and power access assets at approximately $10 billion, including this investment and corporate debt. This means that the initial $2 billion investment will allow NVIDIA to acquire about 20% equity in this power developer, with the final ownership stake potentially rising to about 30%. Notably, NVIDIA's investment is purely equity-based and does not involve credit guarantees for data center construction and leasing. This is NVIDIA's direct measure to combat power shortages, which could hinder the deployment of its next-generation Vera Rubin architecture in locations designed for high power consumption.

Alibaba Cloud plans to double global data center capacity. Based on its pioneering fully modular design architecture, Alibaba Cloud, a subsidiary of Alibaba (BABA.US), has shortened the delivery time for large AIDC data centers to 100 days. In contrast, the traditional delivery period in China is 6 to 12 months, while in the U.S. it is 12 to 18 months. While significantly reducing the construction time, the overall construction cost of Alibaba Cloud's data centers has decreased by more than 10%. This year, Alibaba Cloud plans to more than double the global capacity of its modular data centers.

Earnings Forecast

Tuesday morning: AST SpaceMobile (ASTS.US), Rocket Lab (RKLB.US)

Tuesday pre-market: Tencent Music (TME.US), Huya (HUYA.US)