Preview of US Stock Market | The three major stock index futures fell together, and the heavyweight April CPI is on the way. Chip stocks are trading lower before the market opens.

Pre-market market trends 1. Pre-market on May 12th (Tuesday), pre-market of US stocks, the futures of the three major US stock indexes are all falling. As of the writing, Dow Jones futures fell by 0.07%, S&P 500 index futures fell by 0.42%, and Nasdaq futures fell by 0.90%. 2. As of the writing, the DAX index in Germany fell by 1.05%, the FTSE 100 index in the UK fell by 0.40%, the CAC40 index in France fell by 0.58%, and the Euro Stoxx 50 index fell by 0.99%. 3. As of the writing, WTI crude oil rose by 3.46% to $101.46 per barrel. Brent crude oil rose by 3.21% to $107.56 per barrel. Market News "Inflation Beast" may once again sweep the United States? The upcoming CPI report may lead to short-term market correction. The data expected to be released by the US Bureau of Labor Statistics is projected to show a 3.8% year-on-year increase in the overall CPI in April. If economists' latest forecasts are accurate, this will be higher than the 3.3% year-on-year increase in March. Economists unanimously predict that the overall CPI in April will increase by 0.6% month-on-month. At the same time, the core CPI is also expected to see a significant jump, with a possible increase from 0.2% to 0.4% month-on-month, and a possible increase from 2.6% to 2.7% year-on-year. According to the latest predictions from Wall Street strategists, an overly hot US CPI report could trigger a major market shift - shifting from "the Fed pausing rate cuts this year" to the possibility that "the Fed may have to reconsider raising rates." The global stock, bond, and currency markets may enter a stronger repricing phase, especially for the global stock market bullish trend around AI computing power trading under the scenario of increasing risk appetite might mean a significant downward trend at least in the short term. The United States may consider resuming military action against Iran. According to the latest news, sources within the US government revealed that, due to the lack of progress in US-Iran negotiations, the US is now "more seriously considering" resuming military action against Iran than in the past few weeks. The US sources stated that there are different views within the US government on the Iran issue. Some officials advocate taking a tough stance, including conducting more targeted strikes to weaken Iran and force concessions at the negotiating table; others hope to give diplomatic negotiations more time. It is also reported that one of the options currently under consideration by the US is to restart the so-called "Freedom Plan" to "channel" ships in the Strait of Hormuz; another option is to resume military action against Iran. "Big Short" Burry warns: The "parabolic" rise of the Nasdaq is akin to the eve of the Internet bubble, and a significant reversal is imminent. Michael Burry, an investor famous for the movie "The Big Short," has once again warned that the Nasdaq 100 index is on the verge of a sharp reversal after experiencing a "parabolic" surge, which has pushed the valuations of tech stocks to unsustainable highs. Burry posted that the current market conditions are similar to the peak before the bursting of the Internet bubble, specifically pointing out the sharp rise of chip stocks, which has led to a nearly 70% increase in the Philadelphia Semiconductor Index since the end of March. He estimated that the P/E ratio of the Nasdaq 100 index is 43 times - much higher than the implied level of around 30 times - because "Wall Street may have overestimated the earnings of our fastest-growing, highest-valued companies by more than 50%." He said, "We are witnessing history. This is not good news for the stock market." He likened it to the scene just minutes before a "fierce car crash." As the "Big Short" sounds the alarm, a well-known investor provides a "AI bull market timetable": The bubble may expand for another year. According to Dan Niles, founder and portfolio manager of Niles Investment Management, the AI-driven uptrend is far from over - it will last at least another year before reaching a true peak. He compared today's AI-driven market with the Internet bubble era, but emphasized a key difference - this time, there is strong fundamental support behind the growth. This judgment has been confirmed by data - information technology and communication services accounted for 77% of the S&P 500's rise and 67% of first-quarter profit growth, also contributing to 55% of actual GDP growth for the quarter. Earnings growth for the S&P 500 in the first quarter reached 28%, a new high since the fourth quarter of 2021, with the semiconductors and equipment industry showing the highest growth at 99%. Niles explained, "The bubble may already exist, but it may still expand further before it bursts." Oil prices may soar to $150! JP Morgan warns: High inflation will force the Fed to "definitely not cut rates" before 2027. JP Morgan has issued a grim assessment of the global oil market, warning that supply disruptions caused by the US-Iran conflict could push Brent crude oil prices up to $150, raise US inflation to 4%, and keep the Fed on hold until 2027. Geneva, head of global commodities strategy at JP Morgan, said that in April, global oil supply disruptions reached 13.7 million barrels per day, accounting for about 14% of global demand. With the closure of the Strait of Hormuz and the remaining production capacity in Saudi Arabia and the UAE unable to be used, the global oil market relies heavily on inventory drawdowns to fill the gap, with inventories dropping by 7.1 million barrels per day last month. Even so, the market still faces a gap of about 2 million barrels per day. In terms of prices, JP Morgan expects Brent crude oil prices to fluctuate between $120 and $130 per barrel in the near term, and if the disruptions continue until mid-May, prices could reach $150 per barrel or higher. The illusion of rate cuts ends! Goldman Sachs Group, Inc. and Bank of America Corp collectively turn against it, and the April non-farm payrolls may be the "last straw" for the Fed. Goldman Sachs Group, Inc. and Bank of America Corp are the latest Wall Street banks to join the camp predicting a delay in rate cuts. They believe that both employment and inflation data support the reasons for the Fed to keep rates unchanged until at least the end of this year. Bank of America Corp's chief US economist Bailey said, "The data simply does not support rate cuts this year. Core inflation is too high and rising. The strong performance in the April jobs report is the last straw, especially considering the hawkish comments from Fed officials." Bailey and his colleagues now predict that the Fed will not cut rates again until July 2027, a significant change from the previous forecast of September this year. Following the release of the April non-farm payrolls data last Friday, the Goldman Sachs Group, Inc. team also postponed their prediction of the next rate cut by the Fed from September to December 2026. Individual stock news Leading tech stocks fall broadly in pre-market trading, with chip stocks leading the decline. In pre-market trading on Tuesday, as of writing, Intel Corporation (INTC.US) fell by over 4%, Micron Technology, Inc. (MU.US) and Qualcomm (QCOM.US) fell by over 3%, AMD (AMD.US), ASML Holding NV ADR (ASML.US), Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) fell by nearly 2%, Tesla, Inc. (TSLA.US), Broadcom Inc. (AVGO.US), and Oracle Corporation (ORCL.US) fell by over 1%. eBay (EBAY.US) rejects GameStop Corp. Class A (GME.US) $56 billion acquisition offer, calling it untrustworthy. Last week, GameStop Corp. Class A CEO RyanConn's, Inc. revealed that the company plans to acquire e-commerce platform eBay for approximately $56 billion in cash and stock. However, eBay rejected the acquisition offer on Tuesday, with the company's chairman stating in a letter that the offer was "neither reliable nor attractive." Prior to this, many investors doubted Conn's, Inc.'s ability to complete the deal as he had not fully explained how he would pay for the acquisition. There are also market views speculating that Conn's, Inc.'s move is not a genuine attempt to merge but rather an attempt to boost GameStop Corp. Class A stock price in an unconventional way. In addition, eBay's rejection may trigger a proxy fight to replace eBay's board with a board favorable to GameStop Corp. Class A transactions. As of writing, in pre-market trading on Tuesday, GameStop Corp. Class A fell by nearly 3%, and eBay fell by nearly 1%. Vodafone Group Plc Sponsored ADR (VOD.US) exceeds Q4 sales growth expectations, with service revenue in the German market returning to growth. Vodafone Group Plc Sponsored ADR stated that due to the company's focus on core markets and the recovery of its business in Germany, organic revenue growth in the last quarter exceeded analyst expectations. In the fourth quarter ending in March, organic service revenue increased by 5.1% year-on-year to 8.6 billion euros (approximately $10.1 billion), higher than the average analyst expectation of 4.9%. Vodafone Group Plc Sponsored ADR expects adjusted EBITDAal for the financial year 2027 to be between 11.9 billion and 12.2 billion euros, with adjusted free cash flow between 2.6 billion and 2.9 billion euros. In the 2026 financial year, EBITDAal increased by 3.8% year-on-year to 11.4 billion euros. This indicator is commonly used in industries with heavy lease burdens to reflect cash flow conditions. As of the writing, Vodafone Group Plc Sponsored ADR fell by nearly 6% in pre-market trading on Tuesday. AST SpaceMobile (ASTS.US) reports dismal Q1 revenue and profits, but full-year financial forecasts provide some solace. Satellite communication company AST SpaceMobile released disappointing first-quarter financial results that missed market expectations. The report showed that the company achieved revenue of only $14.73 million in the first quarter, a significant increase from $717,000 in the same period last year, but far from the market's expectation of $39 million. The net loss attributable to shareholders for the quarter was a staggering $191 million, compared to a loss of $45.7 million in the same period last year, with the market's prior loss expectations at $86.8 million. Loss per share was 66 cents, compared to a loss of 20 cents per share in the same period last year, with the market expecting a loss of 24 cents per share. The significant increase in operating expenses was a key driver of the expanded loss. Additionally, AST SpaceMobile maintains its full-year revenue guidance for 2026 between $150 million and $200 million, providing rare comfort to the market. Wall Street currently forecasts the company's full-year revenue to be approximately $181 million. As of writing, AST SpaceMobile was down by over 12% in after-hours trading on Tuesday. Non-member service revenue related to music grows by nearly 30%, Tencent Music Entertainment Group Sponsored ADR Class A (TME.US) Q1 total revenue is 79.0 billion. In the first quarter of 2026, Tencent Music Entertainment Group Sponsored ADR Class A continued its steady growth. Tencent Music Entertainment Group Sponsored ADR Class A reported total revenue of 79.0 billion in the first quarter, a 7.3% year-on-year increase; adjusted net profit was 23.3 billion, a 4.8% year-on-year increase; adjusted EBITDA was 28.3 billion, a 10.5% year-on-year increase. The revenue from music-related services grew diversely, with a 12.2% year-on-year increase to 65.1 billion this quarter. Among them, revenue from music-related membership services reached 45.7 billion, a 6.6% year-on-year increase; non-member service revenue related to music grew particularly strongly, with a 28.0% year-on-year increase to 19.4 billion. In addition, the State Administration for Market Regulation announced additional restrictive conditions for approving Tencent's acquisition of a stake in Himalaya. As of writing, Tencent Music Entertainment Group Sponsored ADR Class A rose by over 6% in pre-market trading on Tuesday. Upcoming important economic data and events preview 20:30 Beijing time - US April CPI data Next day 00:00 Beijing time - EIA releases the Monthly Short-Term Energy Outlook report Next day 01:00 Beijing time - Chicago Fed President Evans participates in a Q&A session hosted by the local chamber of commerce Earnings preview Pre-market on Wednesday: Alibaba Group Holding Limited Sponsored ADR (BABA.US), Nebius (NBIS.US), Wenyuan Zhixing (WRD.US), Flex LNG (FLNG.US), uCloudlink Group, Inc. Sponsored ADR Class A (UCL.US)