Preview of US Stock Market | Three major stock index futures were mixed, the US-Iran situation remains uncertain, and quantum computing concept stocks rose across the board before the market open.

Pre-market Market Trends 1. As of April 15th (Wednesday), pre-market in the US stock market, the futures of the three major stock indexes in the US were mixed. As of the time of writing, Dow Jones futures rose by 0.08%, S&P 500 index futures rose by 0.03%, and Nasdaq futures fell by 0.05%. 2. As of the time of writing, the German DAX index rose by 0.11%, the UK FTSE 100 index rose by 0.16%, the French CAC40 index fell by 0.53%, and the European Stoxx 50 index fell by 0.46%. 3. As of the time of writing, WTI crude oil rose by 0.67% to $91.89 per barrel. Brent crude oil rose by 0.87% to $95.61 per barrel. Market News Reports indicate that the US and Iran have agreed in principle to extend the ceasefire. The US side has stated that mediators are close to reaching an agreement to extend the temporary ceasefire between the US and Iran and to restart negotiations. Sources claim that both sides have "agreed in principle" to extend the temporary ceasefire agreement set to expire on April 22nd to allow for more diplomatic time. The blockade of Iranian ports by the US and threats from the Iranian side have made the prospects of the ceasefire uncertain. The parties are currently seeking compromise on key disagreements such as the Iranian nuclear program, the Strait of Hormuz, and war reparations. However, President Trump continues to make some threatening signals, stating in an interview aired on April 15th that the war could last until the midterm elections in November and again threatening to attack Iranian civilian infrastructure, but also stating "hopefully it won't come to that," and saying "we can destroy all of Iran's bridges and power plants within an hour." No more fear of highs! Bank of America survey: The S&P 500 is just a step away from its historical high, but concerns about overvaluation have fallen to a new low since 2019. According to the April global fund manager survey released by Bank of America Corp, investors' concerns about the valuation of US stocks have fallen to their lowest level since February 2019, signaling a shift in the long-standing anxiety about high-priced stocks. Meanwhile, the S&P 500 has fully recovered from the losses caused by the GEO Group Inc conflict (Iran situation) and is now only about 1% below the historical high of 7000 points set on January 28th. This change indicates that some of the overvaluation concerns accumulated over the past few years are gradually dissipating due to the conflict with GEO Group Inc and the "higher and longer" borrowing cost environment. Are US software stocks starting a counterattack? After months of continuous decline and historic valuation compression, US software stocks have seen a strong rebound this week. Previously, the AI panic had mistakenly brought software stock valuation to historically low levels. In addition to low valuations, the marginal improvement in profit expectations is also driving fund inflows. Industry research data shows that Wall Street analysts have quietly raised their expectations for the software sector recently, with profit growth for software and service companies expected to reach 16.5% by 2027, up from the 15.7% forecast at the end of February. Revenue expectations are showing a similar upward trajectory. However, due to several challenges facing the software industry, such as slowing revenue growth and the rapid development of AI (each update seems to herald a leap in capabilities), many investors are cautious about buying software stocks on dips. Broad supply-side impact coming, but no runaway inflation, Yellen and Goldman Sachs Group, Inc. stabilize the Fed rate cut narrative. Currently, the swap market and interest rate futures market have completely abandoned bets on a Fed rate cut this year, with some traders even starting to price in the possibility of a Fed rate hike before the end of 2026. However, former US Treasury Secretary Yellen has stated that despite the significant impact of the sharp rise in oil prices triggered by the political conflict in the Middle East, which casts a shadow over the US and global economic outlook, she still believes there is a possibility of the Fed resuming rate cuts later this year. Yellen stated, "This is actually a broad-based supply-side shock, not another round of runaway inflation." While she does not completely rule out the need for a rate hike, the stability of long-term inflation expectations indicates that, for now, this extreme scenario is unlikely to materialize. Economists at Goldman Sachs Group, Inc. also judge that this round of price shocks resembles moderate stagflation, insufficient to repeat the runaway inflation of 2022, and therefore maintain expectations of rate cuts of 25 basis points in September and December. Risk-off halo fading! Hedge funds are taking advantage to "snipe" the US dollar. With increasing prospects of the US and Iran reopening negotiations and the possibility of reaching a peace agreement, hedge funds are increasingly bearish on the US dollar. The strong performance of the US dollar accumulated earlier due to war risk aversion has now been almost completely wiped out. Morgan Stanley's proprietary trading model shows that as of April 10th, investors have been adding to their bearish bets on the US dollar this month. At the same time, the so-called risk reversal indicator for the US dollar shows that the premium of bullish options (hedging the strength of the US dollar) relative to bearish options (betting on the weakness of the US dollar) has significantly narrowed this month. Morgan Stanley analysts stated, "The path of USD weakness is broadening, not narrowing." "In the short term, the ceasefire agreement may be a positive for risk currencies. However, in the medium to long term, we believe that the weakness of the US dollar will be more concentrated when compared against major non-US currencies such as the Euro, Yen, and Swiss Franc." Individual Stock News NVIDIA Corporation(NVDA.US) launches the world's first open-source quantum AI model, boosting stocks related to quantum computing concepts. NVIDIA Corporation launched the world's first open-source quantum AI model family, Ising, aimed at accelerating the development of quantum computing. This news has boosted stocks related to quantum computing concepts pre-market on Wednesday. As of the time of writing, Quantum Computing(QUBT.US) rose by over 4%, Infleqtion(INFQ.US), Rigetti Computing(RGTI.US), and IonQ Inc(IONQ.US) rose by over 5%, and D-Wave Quantum(QBTS.US) rose by over 8%, while Hynade Quantum Technology(XNDU.US) rose by over 11%. Morgan Stanley(MS.US) exceeds Q1 earnings expectations. The financial report shows that Morgan Stanley's Q1 net revenue increased by 16% year-on-year to $20.58 billion, beating the market's estimate of $19.71 billion; net profit increased by 29% year-on-year to $5.57 billion; earnings per share were $3.43, better than the market's expected $3.02. Net interest income was $27.0 billion, better than the market's estimate of $26.7 billion. Stock trading revenue was $51.5 billion, better than the market's expected $47.8 billion. As of the time of writing, Morgan Stanley rose by over 2% pre-market on Wednesday. Business diversification, Bank of America Corp(BAC.US) exceeds Q1 earnings expectations. Bank of America Corp exceeded Q1 earnings expectations, as market volatility boosted trading activity and a rebound in merger activity also raised investment banking fees. The financial report shows that the bank's Q1 revenue increased by 7% year-on-year to $30.3 billion, exceeding market expectations; earnings per share increased by 25% to $1.10, also surpassing market expectations. Net interest income reached $15.7 billion, a 9% year-on-year increase, largely driven by the increase in net interest income related to global market activity, deposit and loan balances, and repricing of fixed-rate assets. In addition, Bank of America Corp disclosed that its exposure in the private credit field is approximately $20 billion, as the bank and its Wall Street peers are seeking to calm concerns about the exposure in this asset class. AI investment frenzy sparks demand for equipment, ASML Holding NV ADR(ASML.US) raises sales forecast for 2026. Data shows that ASML Holding NV ADR's net sales in Q1 were 8.77 billion, higher than the expected 8.5 billion; net profit was 2.8 billion, higher than the expected 2.5 billion. The Q1 gross margin reached 53.0%, at the high end of the previously predicted range. This reflects ASML Holding NV ADR's powerful pricing power in the industry chain, enough to offset component costs and supply chain volatility. The most striking structural change in this quarter's financial report is the rise of storage customers. ASML Holding NV ADR stated that in the net sales of new equipment in Q1, the proportion in the storage chip sector surged from 30% in the previous quarter to 51%, on par with logic chips for the first time. The company also raised its sales outlook for 2026, expecting net sales to be between 36 billion and 40 billion. This is up from the previous range of 34 billion to 39 billion. However, the Q2 outlook was below expectations, with net sales expected to be between 8.4 billion and 9.0 billion, below the expected 9.07 billion. Tesla, Inc.(TSLA.US) successfully mass produces A15 chip! Musk exclaims: it will become one of the highest-volume AI chips globally in the future. Tesla, Inc. CEO Elon Musk announced that Tesla, Inc.'s AI chip design team has successfully mass-produced the AI5 chip. This marks an important milestone as the chip moves towards the production stage. Musk also mentioned that AI6, Dojo3, and other exciting chips are also in development. Musk also thanked partners Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR(TSM.US) and Samsung for their support in the chip mass production process, stating that the AI5 chip will become one of the highest-volume AI chips globally in the future. Mass production is a key stage before chip production, testing the viability of the chip design, and preparing for large-scale production. Musk previously stated that the AI5 chip is slated to enter mass production in 2027. Billions of dollars are spent on customization! Meta(META.US) deepens ties with Broadcom Inc.(AVGO.US) regarding chip integration. Meta announced an expanded partnership worth billions of dollars with Broadcom Inc., where both will jointly design and manufacture custom chips to support Meta's artificial intelligence business layout. Under the agreement, the two companies will co-develop multiple generations of Meta Training and Inference Accelerators (MTIA), with the collaboration framework extending until 2029. At the same time, it was revealed that Broadcom Inc.'s CEO, Hock Tan, will officially step down from the Meta board of directors after the annual shareholders meeting. The two companies stated in a joint statement that the collaboration includes a commitment to develop chips that can provide over 1 GW of computational power. According to an insider, the agreement is expected to be the first phase of a deployment plan worth billions of dollars, and plans are in place to expand the deployment to several GW levels with the support of Broadcom Inc.'s technology. Fixed income giant Pimco bets 4 billion dollars! Blue Owl(OWL.US) in the eye of the storm of private credit receives crucial endorsement. According to sources, The Pacific Assets Management(Pimco), one of the world's largest fixed income investment giants, bought $400 million in bonds issued by one key private credit fund under Blue Owl Capital(OWL.US) which is currently in the eye of the storm of private credit. Whether Pimco intends to hold these bonds is still undecided, but this deal is a positive vote of confidence in the global private credit industry. This industry has been severely affected by the surge in redemption requests, as well as increasing concerns about the impact of AI disruption on software asset fundamentals, valuations, asset liquidity, transparency, and more. Upcoming Economic Data and Events 20:30 Beijing time: US New York Fed Manufacturing Index for April 01:45 the next day Beijing time: Federal Reserve Governor Bowman speaks at the IIF forum 02:00 the next day Beijing time: Federal Reserve releases Beige Book on economic conditions Earnings Forecast Pre-market on Thursday: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR(TSM.US), PepsiCo, Inc. (PEP.US), Abbott Laboratories(ABT.US), Charles Schwab Corp(SCHW.US)