Preview of US Stock Market | The three major stock index futures are mixed, the US and Iran have reached an agreement on documents, and the US May PCE costs are the focus of the market this week.

Pre-Market Market Trends 1. Before the market on June 22nd (Monday), the futures of the three major US stock indices fluctuated. As of the time of writing, Dow Jones futures were up 0.08%, S&P 500 index futures were down 0.05%, and Nasdaq futures were up 0.14%. 2. As of the time of writing, the German DAX index fell 0.20%, the UK FTSE 100 index rose 0.42%, the French CAC 40 index fell 0.50%, and the Euro Stoxx 50 index rose 0.14%. 3. As of the time of writing, WTI crude oil fell 0.80% to $75.24 per barrel. Brent crude oil fell 1.74% to $78.66 per barrel. Market News Inflation becomes this week's key indicator! After the hawkish move by the Federal Reserve, May PCE inflation tests are coming, and Micron Technology's earnings report provides insights into AI trends. The core focus of the market this week will be on inflation data, especially the May Personal Consumption Expenditures (PCE) report, which is a favored inflation indicator by the Federal Reserve. The Federal Reserve believes that PCE can more accurately measure price changes, as it is based on business surveys rather than consumer surveys, incorporating broader data. In April, the PCE price index rose 3.8% year-on-year, well above the 2% target, marking the largest increase in three years. This is the first important inflation data since Federal Reserve officials announced the interest rate decision last week. With Fed Chair Powell hoping to reduce reliance on economic forecasts, investors may pay more attention to PCE and other economic indicators. The market will also closely monitor a series of speeches by Federal Reserve officials this week to further understand how policymakers interpret recent inflation developments and whether officials continue to support the prospect of a "higher and more prolonged" policy outlook. In terms of earnings, FedEx Corporation and Micron Technology, Inc. will be in the spotlight on the earnings calendar, with Micron Technology, Inc. providing another important update on AI-related demand and memory price trends. Iran announces: After 18 hours of negotiations, Iran and the US reach an agreement document! Qatar and Pakistan issue a joint statement: First round of high-level US-Iran talks conclude with encouraging progress. Iranian Foreign Ministry spokesperson Bagaei stated that Iran and the US have reached an agreement document after 18 hours of negotiations, and the text of the agreement will be released by mediators Qatar and Pakistan. Bagaei said that Iran and the US discussed issues such as issuing Iranian oil sales permits and unfreezing Iranian assets, making good progress. After the first round of high-level US-Iran talks, Iranian negotiating team member and Foreign Minister Arlaqi stated that Iran's oil and petrochemical product exports have been exempted, the US maritime blockade has been lifted, some frozen assets have been released, and a major reconstruction and development plan for Iran has been initiated. Arlaqi also stated that Qatar and Pakistan have made significant progress in their mediation to end the Lebanon war. As mediators in the US-Iran negotiations, Qatar and Pakistan issued a joint statement on Tuesday (June 22) regarding the conclusion of the first round of high-level US-Iran Joint Commission meetings. The joint statement stated that the meeting made encouraging progress, including establishing mechanisms for further technical negotiations. Not afraid of rate hikes? The Federal Reserve's "new policy" may not stop the bull market! The new Federal Reserve Chairman Kevin Walsh is trying to break the long-standing tradition of "forward guidance." He believes that the Federal Reserve should reduce its interventionist messaging to the market and let financial markets pricing itself become the "wind vane" guiding economic, interest rate, and inflation expectations. For investors, the Fed's era of Walsh may mean a more volatile but less interventionist market environment. Although rate hikes may damage the Fed's short-term "popularity," if they can show determination to resist inflation through this "hardcore" approach, it may actually strengthen the market's foundation of trust in the long run. Before the AI premium is completely exhausted, there may still be a "second half" of the bull market to look forward to. Meanwhile, a rate hike cycle does not necessarily mean the end of the bull market. Looking back at historical data, in the five rate hike cycles since the early 1990s, the S&P 500 increased four times during rate hikes. Stronger signals for the reopening of the Hormuz Strait! Kuwait demands buyers to "self-collect" refined oil, Qatar urgently recalls empty LNG ships. Kuwait is adjusting its export method of refined oil, requiring buyers to go to its ports to collect the goods themselves. This change means that the circulation of related goods will again rely on the transportation route through the Hormuz Strait, which is seen as one of the signals for the gradual resumption of energy flow in the region. This move by Kuwait echoes other dynamics in the region. With the United States and Iran reaching temporary peace agreements, energy production and transportation activities are gradually resuming. Mediators revealed in follow-up talks last weekend that communication mechanisms have been established to reduce misjudgments and ensure the safe passage of commercial ships through the Hormuz Strait. In addition, Qatar has started preparations to restart LNG exports. To quickly restore this system, which accounts for about one-fifth of the global supply, Doha is reallocating resources and recalling previously stranded empty LNG ships. Doha aims to gradually restore most of its export capacity within two months after the safe passage of the strait. Talks between the US and Iran trigger oil market changes: Options market excess betting reignites, IEA warns of "significant excess" countered strongly by OPEC. With the US and Iran set to reach a peace agreement and navigation through the Hormuz Strait expected to gradually resume, international oil prices have fallen to a three-month low. The market logic has sharply shifted from "supply disruption panic" to "expectations of oversupply," reviving oil surplus options bets that were almost forgotten. Just as the market sentiment shifted, the International Energy Agency (IEA) released its monthly oil market report last Wednesday, significantly lowering demand outlook and issuing a warning of a "significant excess" by 2027 for the first time. The report lowered the global average daily demand growth expectations for 2026 by 700,000 barrels to 1.1 million barrels per day, citing that high oil prices and shortfalls in refined oil have severely eroded consumption. However, the IEA's excess prediction has been positively countered by OPEC. Stock News SpaceX (SPCX.US) may continue to decline for the third consecutive day, with plans to issue at least $20 billion in bonds. As of the time of writing, SpaceX was down nearly 6% in pre-market trading on Monday. SpaceX's stock has been volatile since completing its record-breaking IPO. The stock fell 3.6% last Thursday, with a cumulative drop of 8.3% over two days. Despite this, SpaceX's closing price last Thursday was still 37% higher than the IPO price of $135. Insiders reveal that SpaceX's investment banking team is expected to hold a conference call with investors this week to discuss issuing bonds after the company's record IPO. The bond issuance is expected to be at least $20 billion, with the investor communication meeting potentially starting on Monday, with adjustments still possible in terms of issuance plans and timing. Pre-market declines in US space stocks. Before the market on Monday, Momentus (MNTS.US) was down over 5%, Redwire (RDW.US) was down over 4%, Rocket Lab (RKLB.US) was down nearly 3%, Firefly Aerospace (FLY.US), Intuitive Machines (LUNR.US), and AST SpaceMobile (ASTS.US) were down over 2%, and Voyager Technologies (VOYG.US) was down nearly 1%. Microsoft Corporation (MSFT.US) CEO calls for reshaping the AI industry: Moving away from the spiral of large models, towards a universal low-cost path. Microsoft Corporation's CEO Nadella calls for a different approach to the development of artificial intelligence (AI), believing that the industry must move away from a path dominated by a few companies constantly building super-large models, and focus on broader applications, lowering costs, and earning public trust. At the time of Nadella's comments, Microsoft Corporation is launching a series of low-cost AI products aimed at helping customers cope with the pressure of rapid growth in AI spending. The company recently launched the autonomous AI assistant Copilot Cowork, which allows users to choose from multiple AI models, including some lower-cost alternatives, for executing long-running tasks. Despite having developed its own AI systems, Microsoft Corporation lags behind some competitors in consumer adoption. Recon Analytics research found that many Copilot users gradually shifted to rival tools such as Alphabet Inc. Class C's Gemini by the second half of 2025. Microsoft Corporation seems to be moving away from just building cutting-edge models and focusing more on making AI models interchangeable and widely accessible. Microsoft Corporation (MSFT.US) signs a 20-year power supply agreement with Chevron Corporation (CVX.US) to provide energy for a data center in Texas. Microsoft Corporation has signed a 20-year agreement with Chevron Corporation to provide natural gas-generated electricity for a data center planned to be built in West Texas, USA. The data center is expected to become one of the largest projects in the United States. Chevron Corporation's power project will utilize cheap natural gas from the Permian Basin, the largest oil field in the United States, and generate electricity through multiple large gas turbines produced by GE Vernova to supply power to Microsoft Corporation's planned data center campus near Pecos City, Texas. As the competition for AI intensifies, Microsoft Corporation is accelerating the construction of data centers to compete with Alphabet Inc. Class C and Amazon.com, Inc. for AI market share. As a long-time supporter of OpenAI and its product ChatGPT, Microsoft Corporation plans to double its data center capacity in the next two years. This cooperation with Chevron Corporation, one of the largest natural gas producers in the United States, aims to provide a stable power supply needed for large-scale AI model operations. Premium up to 60%! AbbVie (ABBV.US) to acquire Apogee (APGE.US) for $10.9 billion. AbbVie will acquire the anti-inflammatory drug developer Apogee Therapeutics for $10.9 billion, with the deal expected to be completed in the third quarter of this year. AbbVie expects the deal to start boosting its adjusted earnings per share from 2032. This acquisition will further strengthen AbbVie's immunology product line, which is led by its anti-inflammatory drugs Humira, Skyrizi, and Rinvoq, which collectively generated $30.4 billion in revenue last year, representing a year-on-year growth of approximately 14%. As of the time of writing, in pre-market trading on Monday, Apogee surged nearly 51%, while AbbVie rose nearly 1%. Important Economic Data and Events Preview 9:00 PM Beijing time: Federal Reserve Governor Waller delivers welcome remarks at a conference on the international role of the US dollar Earnings Forecast Before the market on Tuesday: Jiayin Technology (JFIN.US)