Preview of US Stock Market | The three major stock index futures all rise, the probability of a rate hike by the US Federal Reserve in July halved, Apple Inc. will integrate Alibaba (BABA.US) and Baidu Inc Sponsored ADR Class A (BIDU.US) AI.

Pre-market Market Trends 1. On July 15th (Wednesday), before the U.S. stock market opened, the futures of the three major U.S. stock indexes all rose. As of the time of writing, the Dow Jones Industrial Average futures rose by 0.10%, the S&P 500 index futures rose by 0.17%, and the Nasdaq futures rose by 0.47%. 2. As of the time of writing, the German DAX index fell by 0.60%, the UK FTSE 100 index fell by 0.20%, the French CAC40 index fell by 0.16%, and the European Stoxx 50 index fell by 0.10%. 3. As of the time of writing, WTI crude oil rose by 0.05% to $79.38 per barrel. Brent crude oil rose by 0.09% to $84.81 per barrel. Market News Surprise cooldown in U.S. June CPI! The probability of a July rate hike by the Federal Reserve slashed, U.S. stocks may see some "timely rain". Data released on Tuesday showed that the U.S. Consumer Price Index (CPI) in June rose by 3.5% year-on-year, lower than the market expectation of 3.8%, and significantly lower than the previous value of 4.2%; on a month-on-month basis, it dropped by 0.4%, the first month-on-month decrease in six years. The core CPI, excluding energy and food, rose by 2.6% year-on-year, also lower than the market expectation of 2.8%; the month-on-month increase was 0%, significantly slower than the previous 0.2%. This better-than-expected inflation data has reduced market expectations for a rate hike by the Federal Reserve. Traders have lowered their bets on a July rate hike by the Federal Reserve. Currently, the market expects the probability of a 25 basis point rate hike by the Federal Reserve at the July 28-29 meeting to have dropped from the previous 35% to about 15%. At the same time, expectations for a rate hike in September have also fallen, currently at around 70%, lower than the previous level of over 90%. Market analysis believes that weakened inflation has reduced the urgency of the Federal Reserve to further tighten monetary policy in the short term, leading to a rebound in market risk appetite. Trump convenes a meeting to discuss plans for a large-scale attack on Iran. According to informed sources, U.S. President Trump held a meeting in the White House situation room on the 14th to discuss plans for a large-scale attack on Iran, stating that "the scale will be broader than the current strikes around the Strait of Hormuz." The meeting reportedly discussed strikes against Iranian targets in the Strait of Hormuz, with the core issue being a new plan for "destructive strikes on Iranian strategic targets." "Trump seems willing to escalate the war to cause enough damage to force Iran to open the Strait of Hormuz and accept Trump's demands on the nuclear issue." Attendees at the meeting included Vice President Pence, Secretary of State Pompeo, Defense Secretary Esper, Chairman of the Joint Chiefs of Staff Milley, CIA Director Haspel, U.S. Special Envoy for President Whitkof, among others. "The Dr. Doom" Roubini warns: Inflation remains the biggest risk in the market, U.S. bond yields may rise to 30-year highs. The renowned economist Roubini, known for his pessimistic predictions and nicknamed "Dr. Doom," warned that inflation remains the biggest risk facing the market, with key drivers of rising inflation including political tensions at GEO Group Inc, deglobalization, and increased government spending. Roubini warned that if the inflation trend continues to rise, long-term bond yields could experience significant volatility. He stated that if the U.S. Consumer Price Index (CPI) reaches 5%-6%, the 10-year U.S. Treasury bond yield could reach "close to" 8%. This would be the highest level since 1994, a significant increase from the current level of around 4.58%. He stated that structural factors, in addition to market factors, could also drive rising yields. For example, the increasing government debt levels mean the Treasury needs to issue more bonds. If demand does not grow simultaneously, the increase in bond supply will lead to higher yields. "ChatGPT Entity" strikes! OpenAI's first hardware surfaces: screenless smart speaker positioned as "AI companion". According to reports, the highly anticipated artificial intelligence giant OpenAI's first product in the consumer device sector will be a portable, screenless smart speaker. This device, still in development, is internally positioned as an "AI home companion with human traits" that can control smart home devices, play media, answer questions, reply to messages, and fully utilize ChatGPT's various functions, aiming to become a new type of household computer in the AI era. OpenAI's hardware department is developing approximately five different products, but plans to start with this speaker as a starting point. Longer-term plans include creating "a mobile AI device that can replace smartphones." The company is also exploring wearable products, including a pendant-type device, and has shown strong interest in the home robot and automation company Siasun Robot & Automation. Japanese retail investors crazily short the U.S. dollar! Net short positions soar to 2.79 trillion yen, the highest since 2008. Japanese retail investors' net short positions in the U.S. dollar held last month soared to the highest level in nearly twenty years, with market speculation suggesting that Japanese officials may intervene again to boost the yen exchange rate. According to data from the Financial Futures Association of Japan, retail traders' net short positions on the U.S. dollar more than tripled from the previous month to 2.79 trillion yen (approximately $172 billion), marking the largest scale since the end of 2008. Although these bearish bets may also involve other currency pairs, the size of the yen-related open positions is significant, indicating a major focus on U.S. dollar-Japanese yen positions. Stock News Apple Inc. (AAPL.US) Apple's intelligent domestic model passes approval, supported by Alibaba (BABA.US) and Baidu Inc Sponsored ADR Class A (BIDU.US). On July 15th, the NetEase China public account released an announcement of 7 models that have filed for registration information regarding mobile-end generative artificial intelligence services, among which "Apple Intelligence" large model of Apple Inc. Technology Development (Shanghai) Co., Ltd. was filed on July 8, 2026, with applicable scenarios for Apple Inc. phones. This means that the AI function of the domestic version of Apple Inc. phones is expected to accelerate online. It is understood that the partners of this AI function include Alibaba Group Holding Limited Sponsored ADR, and Baidu Inc Sponsored ADR Class A. Alibaba Group Holding Limited Sponsored ADR has stated that Alibaba Thousand Questions will integrate AI capabilities into Apple Intelligence; and according to insiders, Apple Inc. will collaborate with Baidu Inc Sponsored ADR Class A to develop an AI-based search function. SK Hynix (SKHY.US) ADR skyrocketed by 27% overnight! Barclays: expected to rise by another 70%, "storage shortage" to continue for several years. On Tuesday, Barclays initiated coverage of the new U.S. depositary receipt (ADR) of SK Hynix, giving it a "hold" rating and setting a target price of $330, citing continued memory shortages, pricing power, and a strong position in the high-bandwidth memory (HBM) market as reasons. This implies about a 70% upside potential for SK Hynix compared to the latest closing price. Analyst Simon Coles believes that the tight supply situation in the storage industry will worsen further by 2027, with limited improvement expected in 2028, providing support for SK Hynix's stock price to "further achieve significant growth from now." Barclays' global DRAM model shows that by 2027, the bit supply (total storage capacity of DRAM available in the market) will increase by 20% year-on-year, but this will not keep up with the pace of bit demand growth. Barclays expects the bit demand growth rate to accelerate to 35% by then, leading to continued tight supply for several years. Samsung (SSNLF.US) secretly researching the feasibility of listing in the U.S., company previously denied such plans. According to reports, sources revealed that Samsung Electronics has begun internal research on various plans for issuing ADRs in the U.S. and is evaluating the related operational processes. On July 14th, there were reports that Samsung Electronics had preliminary discussions with several investment banks on going public in the U.S. through ADRs, to which Samsung Electronics responded by denying that it was considering listing on the U.S. market by issuing ADRs. However, market participants believe that Samsung Electronics' denial this time does not mean that the possibility of issuing ADRs in the future has been completely ruled out. Although the company denied this plan, under the directive of the management, relevant business units have started evaluating the potential costs, benefits, and procedures required to issue ADRs. Semiconductor industry sources revealed on July 15th that the company's management recently requested relevant departments to research whether they could design a feasible architecture for issuing ADRs for the company. Samsung Electronics personnel have already inquired about the situation from SK Hynix, which recently completed the issuance of ADRs and listing on Nasdaq. Stripe and Advent propose to acquire PayPal (PYPL.US) for over $53 billion. According to two informed sources, the payment company Stripe and private equity firm Advent International have jointly proposed to acquire PayPal at a price of $60.50 per share, a transaction that would value the payment company at over $530 billion. The offer was submitted earlier this month and has received commitments for about $50 billion in bank financing, a premium of about 28% over PayPal's closing price on Tuesday. This proposal is a follow-up action after the initial contact in early April. Stripe and Advent have not received a response from PayPal and hope to advance negotiations in the coming weeks. Under this proposal, Stripe and Advent will collectively hold PayPal, with each holding half of the shares rather than splitting the company. AI "money-making machine" in full swing! ASML Holding NV ADR (ASML.US) surpasses Q2 expectations and raises full-year guidance again, Intel Corporation (INTC.US) first to use next-generation lithography machine. On July 15th, global lithography giant ASML Holding NV ADR announced its financial report for the second quarter of 2026, and announced the second adjustment of its full-year performance guidance. Net sales for the quarter reached 9.33 billion euros, far exceeding analysts' average expectations of 8.85 billion euros; net profit was 2.92 billion euros, also higher than the market's expected 2.64 billion euros; gross margin reached 54.0%, better than the expected 52%. The number of new lithography machines shipped this quarter surged from 67 units in the first quarter to 86 units, while the number of used lithography machines dropped from 12 units to 5 units. Based on a strong performance momentum, ASML Holding NV ADR has raised its full-year net sales forecast to 43-45 billion euros and its gross margin forecast to 54-56%. This is the second time this year that the company has raised its full-year estimate from 34-39 billion euros to 36-40 billion euros after the first adjustment in April. On the same day as the financial report release, ASML Holding NV ADR announced a key technological breakthroughIntel Corporation has already used its high-numeric aperture extreme ultraviolet High NA EUV lithography technology to mass-produce some Intel Core Ultra Series 3 (codenamed Panther Lake) processors, becoming the world's first enterprise to achieve high-volume production of logic chips with High NA EUV technology. BlackRock, Inc. (BLK.US) asset management scale surpasses $15 trillion in Q2, profit sharply rises. Thanks to continued strong inflows into exchange-traded funds (ETFs) and overall market improvement, BlackRock, Inc. delivered quarterly performance that surpassed Wall Street expectations. In its second-quarter earnings report, BlackRock, Inc. disclosed that net inflows for the quarter reached $192 billion, driving total net inflows for the first half of the year to a record high of $321 billion. As of the end of the second quarter, BlackRock, Inc.'s asset management scale reached $15.3 trillion, significantly higher than the $12.5 trillion in the same period last year. Revenue for the quarter was $7.084 billion, an increase of 31% year-on-year. Adjusted earnings per share for the quarter were $13.91, a 15% increase year-on-year and significantly higher than analysts' expected $12.69. Additionally, BlackRock, Inc. announced plans to increase its quarterly share buyback program from $450 million this quarter to $550 million. Morgan Stanley (MS.US) achieves record Q2 revenue and profit, stock trading revenue surges by 69%. Morgan Stanley released its second-quarter earnings on Wednesday, with both revenue and profit reaching record highs, primarily driven by a 69% year-on-year increase in stock trading revenue. The company stated that net profit for the quarter jumped 58% year-on-year to $5.58 billion, with earnings per share of $3.46, higher than analysts' expected $2.94; revenue increased by 27% year-on-year to $21.35 billion, exceeding the market's expected $19.64 billion. Similar to its peers Goldman Sachs Group, Inc. and JPMorgan Chase, the strong performance of the stock trading business was a key driver of the quarter's significant performance growth. Market activity in trading boosted by the global AI boom led to Morgan Stanley's stock trading revenue of $6.3 billion for the quarter, approximately $1.9 billion higher than analysts' expectations. Johnson & Johnson (JNJ.US) surpasses Q2 expectations, pharmaceutical business leads growth. Johnson & Johnson announced its second-quarter sales and profit on Wednesday, both surpassing Wall Street expectations, primarily driven by strong growth in the immunology drug Tremfya and the blockbuster cancer product Darzalex. The outstanding performance of these two products not only compensated for the decline in sales of old products but also offset the impact of a reduction in revenue from heart pump products due to the acquisition of Abiomed in 2022. Data shows that Johnson & Johnson achieved sales of $25.31 billion in the second quarter, a 6.6% year-on-year increase, higher than the analyst average expected revenue of about $250.5 billion. Adjusted earnings per share were $2.90, a 4.7% year-on-year increase, exceeding the market's expected $2.85. The company currently expects mid-range sales for the full year to be around $101.1 billion, up from the previous estimate of $100.8 billion; and has also raised the mid-range adjusted earnings per share for the full year to $11.68, from $11.55. Johnson & Johnson stated that its pharmaceutical division contributed sales of $16.38 billion in the quarter, surpassing analysts' expected $16.1 billion. Upcoming Economic Data and Events 8:30 PM Beijing time: U.S. July New York Fed Manufacturing Index, U.S. June PPI Annual Rate. 8:45 PM Beijing time: FOMC Permanent Voting Members, New York Fed President Williams to speak. 9:45 PM Beijing time: Bank of Canada announces interest rate decision and monetary policy report. 10:00 PM Beijing time: Federal Reserve Chair Powell testifies at the Senate Banking, Housing, and Urban Affairs Committee's "Federal Reserve Semiannual Monetary Policy Report" hearing. 10:30 PM Beijing time: U.S. EIA Crude Oil Inventory Change as of July 6. 1:00 AM the next day Beijing time: Federal Reserve Governor Lael Brainard speaks on economic outlook. 2:00 AM the next day Beijing time: Federal Reserve releases Beige Book on economic conditions. 6:30 AM the next day Beijing time: 2028 FOMC Voting Member, St. Louis Fed President Bullard speaks. Earnings Forecast Thursday morning: United Airlines (UAL.US) Thursday pre-market: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), UnitedHealth Group Incorporated (UNH.US), GE Aerospace (GE.US), Abbott Laboratories (ABT.US)