Preview of US Stock Market | All three major stock index futures are up, oil prices continue to drop, and chip and optical communication stocks are rising in pre-market trading. SpaceX (SPCX.US) released its financial report after hours.

Pre-Market Market Trends 1. As of August 4 (Tuesday), U.S. stock futures are all up before the market opens. At the time of this report, Dow futures are up 1.08%, S&P 500 futures are up 0.36%, and Nasdaq futures are up 1.16%. 2. As of this report, the German DAX index is up 0.70%, the UK FTSE 100 index is up 0.50%, the French CAC 40 index is up 0.34%, and the Euro Stoxx 50 index is up 0.82%. 3. As of this report, WTI crude oil is down 3.71%, trading at $77.36 per barrel. Brent crude oil is down 2.92%, trading at $81.32 per barrel. Market News U.S. Treasury Secretary: Agreement with Iran to open the Strait of Hormuz may be reached tomorrow. According to U.S. media reports on the 4th, U.S. Treasury Secretary Janet Yellen stated that the U.S. may reach an agreement with Iran tomorrow to open the Strait of Hormuz. Goldman Sachs Group, Inc. partner: Earnings are the core driver; the S&P 500 is expected to hit a new historical high this year. Strong corporate earnings are providing the most substantial support for U.S. stock bulls. Goldman Sachs Group, Inc. partner John Flood believes that as market positions become cleaner, the S&P 500 index is likely to set a new historical high this year, driven primarily by earnings. According to Goldman Sachs Group, Inc. data, the second-quarter year-on-year earnings growth tracking for the S&P 500 index was as high as 45%, far exceeding the consensus market expectation of 22% at the beginning of the season. Even after excluding around $151 billion in non-recurring "other income" related to equity investments of Alphabet Inc. Class C and Amazon.com, Inc., the S&P 500 earnings growth rate still reached 26%, which is not only an acceleration from the first quarter but also the fastest growth rate since 2021. From the perspective of upward revisions, the number of companies in the S&P 500 with upward revisions to earnings expectations continues to exceed those with downward revisions, maintaining a positive breadth of revisions. Goldman Sachs Group, Inc. believes this comprehensive upward revision trend is an essential basis for supporting market valuation. John Flood pointed out that the main dividends of the AI supercycle have not yet been fully released, and the world's largest tech companies continue to increase capital investment, driving the breadth and depth of earnings improvements. Castle Securities: Retail investors' speculative enthusiasm cools, but the core logic for the rise in U.S. stocks remains "intact." Castle Securities noted that although retail investors' speculative trading has noticeably cooled recently, the core driving forces behind the historic highs of U.S. stocks this year remain "intact." The market is gradually shifting from being dominated by capital flows to being driven by corporate fundamentals. Scott Rubner, Head of Equity and Equity Derivatives Strategy at Castle Securities, stated in the latest report: "The market is transitioning from a capital flow-driven environment back to one increasingly dominated by corporate earnings, company stock buybacks, and the macroeconomic environment." Rubner believes that after a certain release of the previous market's "over-speculation," the fundamentals of U.S. stocks have become even healthier. Recent corporate earnings reports have generally shown strong performance, with most companies exceeding already high market expectations, providing support for future market trends. The "sleeping giant" is awakening: The $30 trillion U.S. treasury market is undergoing subtle changes; how long can U.S. stocks hold out? The U.S. treasury market, long viewed as a "sleeping giant," is showing significant changes. With an approximate size of $30 trillion, the U.S. treasury market is a crucial foundation of the global financial system. In the coming days to weeks, investors are concerned that severe fluctuations in treasury yields may further transmit to other asset markets, such as stocks. After a sustained rise in early July, long-term U.S. treasury yields significantly accelerated upward in the last week of July. Some market participants believe this trend reflects that investors are testing the Federal Reserve's determination to curb inflation. Historical experience shows that when treasury yields approach current levels, financial pressures often begin to spread to other markets and may weigh on the stock market. As investors start to guard against further interest rate hikes, the ICE BofA Merrill Lynch MOVE Index, which measures expected fluctuations in the treasury market, continues to rise, reaching its highest level since May. Meanwhile, demand for put options related to the iShares 20+ Year Treasury Bond ETF is also rising, driving up the ratio of puts to calls. Communications from Kashkari trigger a crisis of confidence; JP Morgan brings forward its Fed rate hike expectations to December this year. After the policy meeting last week, Federal Reserve Chair Neel Kashkari's press conference raised concerns about the Fed's ability to combat inflation. JP Morgan's economic team believes Kashkari failed to clarify the future policy path, which weakened market confidence in the Fed's inflation control and subsequently adjusted its rate forecasts. Michael Feroli and his team, Chief U.S. Economist at JP Morgan, stated that after the Fed's credibility has been damaged, the urgency for policy tightening is rising, with expectations that the next rate hike could be moved up from the previously predicted second half of 2027 to December of this year. However, the team also acknowledged that the Fed might take action as soon as the September meeting. Risk of attacks escalates; shipping traffic through the Strait of Hormuz has plummeted. According to monitoring by shipping data companies Kpler and Vortexa, the visible traffic flow in the Strait of Hormuz has diminished to sporadic levels. Just this Monday, only three tankers passed through the strait, a significant decline from seven the previous Sunday. To avoid potential strikes, more and more tankers are choosing to turn off their signal transmitters and enter "stealth mode" when passing through critical waters. Additionally, U.S. media reported on the 3rd, citing Iranian and U.S. officials, that Iran and Oman are nearing an agreement regarding navigation through the Strait of Hormuz. According to the discussed agreement, vessels entering the Persian Gulf will navigate through a channel near the Iranian coast controlled by Iran, while outbound vessels will take a route closer to Oman. However, Iranian officials stated that even if an agreement is reached with Oman, the Strait of Hormuz will remain closed if the U.S. does not lift its blockade on Iranian ports or restore the implementation of the prior 14-point memorandum of understanding between the U.S. and Iran. Buying spree of 200,000 tons! The U.S. is experiencing a record surge in copper imports, betting on President Trump's next tariff card. The U.S. is currently witnessing the largest influx of copper imports in at least 12 years, as traders are betting on refined copper tariff policies that President Trump is expected to announce soon, pre-exporting large quantities of copper resources to the U.S. Shipping data shows that in July alone, copper entering the U.S. exceeded 200,000 tons, setting a new single-month record since IHS Markit began tracking in 2014. Meanwhile, U.S. copper inventories continue to climb, and as of last Friday, the combined inventory at the COMEX and the London Metal Exchange exceeded 740,000 tons. Data from the LME indicated that the copper inventory at U.S. ports' private warehouses reached about 110,000 tons. The significant influx of copper into the U.S. is reshaping the global supply landscape. Because market prices in the U.S. are significantly higher than those in London, traders are redirecting copper from other regions to the U.S. to capitalize on the arbitrage opportunities presented by anticipated tariffs. Individual Stock News Chip stocks and optical communication stocks rally pre-market. As of the time of this report on Tuesday morning, in the chip sector, Western Digital Corporation (WDC.US) is up nearly 7%, Seagate Technology Holdings PLC (STX.US) is up nearly 6%, SanDisk (SNDK.US), Intel Corporation (INTC.US), and AMD (AMD.US) are up over 5%, SK Hynix (SKHY.US) and Micron Technology, Inc. (MU.US) are up over 4%, while Qualcomm (QCOM.US) and Broadcom Inc. (AVGO.US) are up nearly 3%; in the optical communication sector, Coherent (COHR.US) is up over 17%, Lumentum (LITE.US) is up over 14%, Corning Inc. (GLW.US) is up over 9%, Marvell Technology, Inc. (MRVL.US) and Astera Labs (ALAB.US) are up nearly 8%, Credo Technology (CRDO.US) is up over 7%, and Nokia Oyj Sponsored ADR (NOK.US) is up over 5%. After the most expensive debut, which is now below its initial price, can Starship, Starlink, and AI computing power save SpaceX (SPCX.US) from its trillion-dollar valuation? After experiencing a steep sell-off that saw its stock price halve from its peak and over $500 billion in market value evaporate, SpaceX, owned by Elon Musk, is expected to release its first earnings report since going public after the market closes on Tuesday. This report will not only test its highly cash-burning business model but also represent a crucial showdown between bulls and bears against the backdrop of an impending unlock of a massive amount of restricted shares and a sharp increase in short-selling pressure. The market will focus on metrics such as Starlink user numbers, satellite internet revenue, rocket launch frequency, government contracts, and expenditures on the Starship project. Given the volatility of SpaceX stock since going public, this initial earnings report will help investors assess whether the company's business model, profitability, and cash flow can support its lofty valuation. The U.S. military's largest AI supplier sees explosive earnings! Palantir (PLTR.US) significantly raises its full-year outlook, with the CEO stating that commercial demand is "extraordinary." The earnings report shows that Palantir's Q2 revenue grew by 94.0% year-on-year to $1.94 billion, exceeding expectations by $130 million; adjusted earnings per share are $0.41, surpassing expectations by $0.06. The company stated that U.S. commercial sales in the second quarter were "stunning," surging 149% year-on-year to $764 million, far above the analyst consensus estimate of $716.4 million. Palantir now projects that its 2026 revenue will reach $8.16 billion, higher than analysts' average estimate of about $7.7 billion; they also expect full-year adjusted operating profit to be between $4.89 billion and $4.91 billion, surpassing the previous upper forecast of $4.45 billion. The stronger outlook helps alleviate investor concerns. Previously, investors worried that software sales from AI developers like Anthropic, as well as governments outside the U.S. increasingly leaning towards collaborating with local tech companies, could harm Palantir's business. As of this report, Palantir is up over 16% pre-market on Tuesday. The AI frenzy spills over to the power chain! ON Semiconductor Corporation (ON.US) exceeded expectations in both Q2 earnings and Q3 outlook. The company reported Q2 revenue of $1.6 billion, a 9.2% year-on-year increase, slightly surpassing analysts' average expectation of about $1.59 billion; adjusted earnings per share reached $0.74, growing approximately 40% year-on-year, better than market expectations of $0.71. The company expects Q3 revenue to be between $1.65 billion and $1.75 billion, with the median of the forecast range above analysts' average expectation of $1.67 billion; adjusted earnings per share for Q3 are expected to be between $0.81 and $0.93, with the median of the forecast range also significantly higher than analysts' average expectation of $0.83. This strong outlook reflects a surge in demand for power management chips used in AI data centers. The company's CEO stated: "The AI data center-related business remains our fastest-growing segment, and we currently anticipate that this business will double its revenue by 2026, showcasing the strength of our smart power product portfolio and the expanding adoption among customers throughout the power tree architecture." As of this report, ON Semiconductor Corporation is up over 8% pre-market on Tuesday. Leveraging the weak yen and hybrid vehicle dividends! Toyota Motor Corp. Sponsored ADR (TM.US) announces a massive 1 trillion stock buyback and raises fiscal 2027 profit forecasts. The earnings report shows that Toyota Motor Corp. Sponsored ADR's revenue for Q1 of fiscal 2027 reached 13.5 trillion, a year-on-year increase of 10.4%; net profit attributable to parent company was 1.48 trillion. The company benefits from the continued popularity of hybrid vehicles in the U.S., which, coupled with the weak yen in the first half of the fiscal year, provides a buffer against surging raw material costs and supply chain disruptions triggered by the Middle East conflict. Meanwhile, the company announced a stock buyback plan worth 1 trillion (approximately $6.3 billion) and raised its profit outlook. Toyota raised its operating profit forecast for the fiscal year ending in March next year by over 10%, to 3.4 trillion, while analysts' average forecast was 3.9 trillion. World Cup advertising warms things up: Snap (SNAP.US) exceeds Q2 revenue expectations. The earnings report reflects that in the second quarter ending June 30, Snap achieved revenue of $1.6 billion, a year-on-year increase of 19%, significantly exceeding analysts' average expectation of $1.54 billion. Among this, advertising revenue, which constitutes the bulk of total revenue, grew by 9% year-on-year, reaching $1.28 billion. Net losses narrowed significantly from $262.6 million in the same period last year to $164 million. Adjusted profit reached $250 million, significantly better than the market expectation of $192 million. Snap's outstanding performance in advertising this quarter is largely due to the boost from FIFA World Cup-related marketing expenditures and a notable improvement in advertising momentum from large North American advertisers. As of this report, Snap is up nearly 7% pre-market on Tuesday. Pfizer Inc. (PFE.US) exceeds Q2 expectations and raises annual revenue guidance. The earnings report shows that Pfizer Inc.'s second-quarter revenue reached $15.03 billion, better than the market expectation of $14.41 billion; adjusted earnings per share were $0.77, exceeding the market expectation of $0.68. The company expects full-year revenue to be between $60.5 billion and $62.5 billion, higher than the prior expectation of $59.5 billion to $62.5 billion, but the median of the forecast range is lower than the market estimate of $61.8 billion. The company also maintains its adjusted earnings per share guidance for the full year at $2.80 to $3.00, the analyst consensus being $2.94. Pfizer Inc. separately announced that it is expanding two cost-cutting programs, expecting the combined net savings from the two plans to rise to $9.7 billion by 2029. Important Economic Data and Events Preview Beijing Time 22:00 U.S. June JOLTs Job Openings Earnings Forecast Wednesday morning: SpaceX (SPCX.US), AMD (AMD.US), Arista Networks (ANET.US), Astera Labs (ALAB.US) Pre-market Wednesday: Honda (HMC.US), Novo Nordisk A/S Sponsored ADR Class B (NVO.US), Walt Disney Company (DIS.US), Uber Technologies, Inc. (UBER.US), Eli Lilly (LLY.US), CVS Health (CVS.US)