Preview of US Stock Market | All three major stock index futures rise, oil prices rebound slightly, and SpaceX plummets after earnings.

Pre-Market Directions 1. As of 8:00 AM on August 5 (Wednesday), U.S. stock index futures are all up. At the time of writing, Dow futures are up 0.51%, S&P 500 futures are up 0.46%, and Nasdaq futures are up 0.21%. 2. As of the same time, Germany's DAX index is up 0.15%, the UK's FTSE 100 index is down 0.05%, France's CAC 40 index is up 0.08%, and the Europe STOXX 50 index is up 0.13%. 3. As of the same time, WTI crude oil is up 0.55%, priced at $76.19 per barrel. Brent crude oil is up 1.05%, priced at $80.19 per barrel. Market News Reports suggest that a temporary agreement to reopen the Strait of Hormuz is "close to being reached," but tensions in Red Sea shipping are rising. Regional sources and U.S. officials have indicated that the U.S., Iran, and Oman are "close to reaching" a temporary agreement to reopen the Strait of Hormuz, with the U.S. hoping to announce the agreement on August 5. Negotiations regarding this temporary agreement have been ongoing for weeks. The agreement aims to restore a ceasefire between the U.S. and Iran and restart negotiations on the Iran nuclear deal, while "partially meeting Iran's demands for greater control of passage through the Strait of Hormuz, control that Iran did not have before the conflict." However, at the same time, risks in Red Sea shipping are escalating, with Yemen's Houthi forces issuing new threats regarding Middle Eastern shipping. The Houthis stated on Wednesday that they targeted a Saudi oil tanker named "Wafa" in the Red Sea area north of Yanbu using ballistic missiles, claiming the missile directly hit the target. U.S. tech stocks make a dramatic comeback! Earnings season reignites faith in AI, with market cap of Nasdaq-100 surging by $3.5 trillion in four days. The performance of U.S. stocks in the second quarter earnings season far exceeded expectations, restoring investor confidence that massive AI investments will not only persist but have already begun to yield returns for some industry giants. Consequently, a dramatic reversal occurred in U.S. tech stocks, propelling the market cap of the Nasdaq-100 index to increase by $3.5 trillion in just four trading days. This rebound is a rapid counterattack for the Nasdaq-100 index. More importantly, the rebound in the tech sector was widespread, with semiconductor companies, software firms, and large-scale cloud computing enterprises all showing gains. Deutsche Bank strategist Parag Thakkar and others believe that the trend of funds flowing out of mega-cap tech stocks bottomed out last week. Since then, market positioning in these stocks has shown a mild recovery, indicating further upside potential in the future. JPMorgan believes that if the market narrative around AI shifts from "is capital expenditure excessive" to "returns on investment are materializing," the next phase of tech stock gains may come more from internal sector rotation rather than solely relying on a continued rise in chip stocks. Unfazed by soaring tech stocks! "Big Short" Michael Burry remains firmly bearish, warning that U.S. stocks may be approaching a significant top. Despite the S&P 500 index reaching a new all-time high, the "Big Short" investor Michael Burry, known for successfully predicting the 2008 financial crisis, continues to maintain his bearish stance, warning that the current U.S. stock market may be nearing a significant peak, and does not rule out the possibility of a major decline similar to "Black Monday" in 1987. Burry remains one of Wall Street's most steadfast skeptics of the AI hype. He believes that the current demand for AI infrastructure investment is largely driven by some potentially unsustainable financing arrangements, rather than being fully based on healthy fundamentals. He pointed out that the current market rally is creating a self-reinforcing cyclemarket volatility is decreasing, causing volatility-targeting quantitative funds to passively raise their stock positions, while other momentum strategy funds will further increase leverage, thus continuing to push the market higher. Dalio dissects the "paper wealth" trap, warning that the AI boom could lead to a recurrence of the bubbles seen in 1929 and 2000. Ray Dalio, founder of Bridgewater Associates, issued the strongest market warning yet, stating that the current investment frenzy surrounding AI is driving the market toward a bubble phase reminiscent of 1929 and 2000. He believes that the market is generating a lot of book wealth, but this wealth does not represent real cash flow. He noted that current markets are exhibiting multiple classic bubble characteristicsSpaceX has completed the largest IPO in history, valuations of Anthropic and OpenAI continue to surge, and large amounts of capital are chasing AI assets that have not yet fully realized their profit potential. He added that the two major factors that usually trigger bubble bursts are rising interest rates and companies issuing stock to finance themselves on a large scale. When financing costs rise and investor sentiment shifts, overvalued assets may come under pressure quickly. Wash's vague statements spark a trust crisis for the Federal Reserve, Barclays, HSBC, and other major banks stand by inflation-protected bonds. Despite Federal Reserve Chairman Kevin Wash repeatedly emphasizing a core stance against inflation, the market remains skeptical of his policy actions being lagging and his resolve against inflation being insufficient. In this context, major international investment banks like Barclays and HSBC have unanimously expressed optimism about the allocation value of U.S. inflation-protected bonds, believing these anti-inflation bonds will continue to outperform ordinary government bonds. Among them, Barclays' head of U.S. inflation market strategy, Jon Hill, stated, "I expect the market to factor in greater inflation risk into the yield curve because the credibility of the previously interpreted 'dovish pause' position is in question. This will mean a widening of the breakeven inflation rate, and the performance of inflation-protected bonds will significantly outperform traditional ordinary bonds." Stock News Strong earnings but unable to counteract the cash burn black hole of AI! SpaceX (SPCX.US) Q2 capital expenditure surged to approximately $18.4 billion. The earnings report shows that SpaceX's revenue in the second quarter increased by 90.2% year-on-year to $7.8 billion, exceeding market expectations by $980 million; the company reported a loss of $0.09 per share, better than the market expectation of a loss of $0.24 per share; adjusted EBITDA reached $3.5 billion, up 191% year-on-year. Although the company outperformed expectations in revenue, loss control, and the growth of Starlink users in Q2, investors are more concerned about SpaceX's rapidly increasing capital expenditures. SpaceX's Q2 capital expenditure hit $18.369 billion, about 6.5 times the $2.825 billion from the same period last year; of this, $15.828 billion was allocated to AI computing infrastructure, accounting for over 80% of total capital expenditure. During the first investor call following the earnings report, CEO Elon Musk again set an aggressive targethe expects the company to achieve an annual revenue run rate (ARR) exceeding $100 billion by December 2026, and has moved up the $1 trillion annual revenue target from 2031 to 2030. He also mentioned that SpaceX plans to launch AI computing satellites starting in 2027 to send data centers into space. However, for SpaceX, which has seen its market value evaporate by over $1 trillion since its peak, stocks worth over $100 billion are set to be unlocked later this week, which may put additional downward pressure on its stock price. As of writing, SpaceX was down over 11% in pre-market trading on Wednesday. AMD (AMD.US) revenue soared 50%, and data center business doubled, yet it was sold off due to growth expectations that failed to "surprise" the market. Data shows that AMD's Q2 revenue reached $11.54 billion, a 50% year-on-year increase, surpassing analyst consensus of $11.28 billion; net profit reached $2.3 billion, significantly up from $872 million in the same period last year; adjusted earnings per share were $1.66, also above the market expectation of $1.62. The core driver of this impressive performance was the data center business, which saw sales soar 107% year-on-year to $6.72 billion, beating analyst expectations of $6.48 billion. AMD attributed this growth to strong sales of central processing units (CPUs) and graphics processing units (GPUs). One of the highlights of the earnings report is that AMDs first rack-scale AI system "Helios" is about to be delivered. The company expects the shipment volume for Helios to gradually increase in the fourth quarter, with initial customers including Meta, OpenAI, and Oracle Corporation, marking AMD's official entry into the "full system" competitive phase in AI infrastructure. However, AMD's Q3 revenue guidance was only slightly above consensus, falling short of some investors expectations for a "super explosion"the company expects Q3 revenue to be around $13 billion (with a fluctuation of $300 million), although it is significantly higher than the analyst consensus of $12.52 billion, some estimates on Wall Street were already far above $13 billion, with the highest reaching $14 billion. As of writing, AMD was down over 8% in pre-market trading on Wednesday. Record earnings met with policy dividends! Astera Labs (ALAB.US) Q3 guidance exceeds expectations, with a potential ban on optical modules opening up significant upside for the stock price. The earnings report shows that the companys Q2 revenue reached $392.4 million, a 104.5% year-on-year increase, exceeding expectations by $315.9 million; adjusted earnings per share were $0.80, exceeding expectations by $0.11. Astera Labs expects Q3 revenue to be between $540 million and $560 million, far above the previous expectation of $417 million; it also anticipates adjusted earnings per share to be between $1.16 and $1.21, again far exceeding the previous expectation of $0.81. Astera Labs is currently showing upward momentum, driven by strong demand signals in high-performance computing and AI infrastructure. As major cloud service providers continue to expand their data center capabilities to accommodate the next generation of large language models, demand for advanced connectivity solutions has surged. Additionally, the recent initiative by the U.S. Federal Communications Commission (FCC) to prohibit the import of new model optical modules from abroad places Astera Labs in a favorable position to benefit from changes in business structure and supply chain, especially in terms of short-distance copper interconnect replacements, reshaping the North American compliant supply chain, and the evolution of next-generation silicon photonics/optical interconnects. As of writing, Astera Labs was down over 1% in pre-market trading on Wednesday. The data center sector ignites a "high-speed connectivity revolution"! Arista (ANET.US) sees revenue surge 38%, with strong guidance validating the AI Ethernet supercycle. The earnings report shows that the company's Q2 revenue increased by 38% year-on-year to $3.04 billion, exceeding market expectations of $2.82 billion; adjusted earnings per share were $1.02, also above market expectations of $0.88. The company expects Q3 revenue to be $3.3 billion, higher than the market expectation of $2.94 billion; it anticipates Q3 adjusted earnings per share to be between $1.06 and $1.08, also above market expectations of $0.91. Additionally, the companys management conveyed several key signals during the earnings conference callthere is no doubt about demand from the customer side, and the actual limiting factor on revenue recognition is the supply chain. Arista Networks focuses on producing high-speed computing network equipment that supports large AI data centers, with core clients including Microsoft Corporation and Amazon.com, Inc. Its Q2 performance and Q3 guidance highlight that, against the backdrop of a global wave of AI computing infrastructure development, demand for its high-performance networking equipment will continue to expand robustly. As of writing, Arista was up over 12% in pre-market trading on Wednesday. Novo Nordisk A/S Sponsored ADR Class B (NVO.US) Q2 performance exceeds expectations and raises annual guidance, but concerns remain! Sales of the oral drug Wegovy show weakness, casting shadows on the return to growth path. The earnings report shows that, at constant exchange rates, Novo Nordisk A/S Sponsored ADR Class B's Q2 adjusted sales grew by 7% year-on-year to DKK 78.488 billion, and adjusted operating profit rose by 11% year-on-year to DKK 33.389 billion, both exceeding market expectations. The highly anticipated Q2 sales of the Wegovy oral medication were DKK 3.22 billion, slightly below market expectations of DKK 3.27 billion. The initial rapid growth of Wegovy had led investors to expect explosive growth potential. However, the latest results have raised concerns about the company's long-term competitiveness. Looking ahead, Novo Nordisk A/S Sponsored ADR Class B has raised its full-year guidance for 2026. It now expects adjusted sales and operating profit at constant exchange rates to decline by 6% to flat, an improvement from the previous guidance of a 4% to 12% decline for both metrics. However, the better-than-expected Q2 performance and raised guidance have not resolved Wall Street's primary concerncan this Danish pharmaceutical giant find a clear path to sustainable growth amidst intensified competition in the weight-loss drug market? As of writing, Novo Nordisk A/S Sponsored ADR Class B was up over 2% in pre-market trading on Wednesday. Demand for weight-loss drugs continues to rise; Eli Lilly (LLY.US) Q2 performance far exceeds expectations while raising full-year revenue guidance. The earnings report shows that Eli Lilly's Q2 revenue grew by 48% year-on-year to $22.97 billion, far exceeding market expectations of $20.59 billion; adjusted earnings per share were $8.38, far surpassing market expectations of $6.31. The core driver of Eli Lilly's growth remains its GLP-1 drug portfolio. For Q2, the diabetes drug Mounjaro and the weight loss drug Zepbound combined contributed nearly $15 billion in revenue, becoming the main sources of the company's performance growth. Of this, Mounjaro's global sales reached $9.9 billion, up 91% year-on-year. In the first half of the year, its cumulative revenue has already exceeded $18.6 billion, up 106%, making annual sales exceeding $30 billion almost a market consensus. As the GLP-1 business grows rapidly, Eli Lilly is also expanding future growth avenues through acquisitions. Additionally, Eli Lilly raised its guidance for full-year 2026, adjusting its revenue guidance from $82 billion-$85 billion up to $85 billion-$87 billion; the profit margin guidance was raised from 47.0%-48.5% to 49.0%-50.5%. As of writing, Eli Lilly was up nearly 5% in pre-market trading on Wednesday. Motorcycle "cash cow" hedges against weak automotive business! Honda (HMC.US) benefits from weak yen; Q1 net profit surges 129%, raises fiscal 2027 guidance. The earnings report shows that Honda's first quarter operating income reached JPY 6.06 trillion, a 13.5% year-on-year increase, exceeding market expectations of JPY 5.87 trillion; operating profit soared 117.4% year-on-year to JPY 530.77 billion, far exceeding market expectations of JPY 300.16 billion. This is Hondas first quarter with year-on-year profit growth in six quarters. The motorcycle business was the largest profit engine this quarterthis segment contributed approximately JPY 234 billion in operating profit, accounting for nearly half (JPY 530.8 billion) of the total quarterly operating profit. With the strong support of this "cash cow," Honda was able to cushion the significant financial impact caused by the restructuring of its automotive business. Meanwhile, the automotive segment achieved an operating profit of JPY 192.1 billion this quarter, significantly reversing from a loss of JPY 29.6 billion in the same period last year. The depreciation of the yen was one of the key factors driving the improvement in automotive business profits. Honda raised its full-year operating profit forecast to JPY 650 billion, upped its full-year revenue expectation to JPY 24.15 trillion (above analyst expectations), and significantly revised its net profit forecast from JPY 260 billion up to JPY 400 billion. As of writing, Honda was up over 4% in pre-market trading on Wednesday. Walt Disney Company (DIS.US) Q3 performance mixed, entertainment division operating profit surged 64%. The earnings report shows that Walt Disney Company's third-quarter revenue grew by 7% year-on-year to $25.248 billion, missing market expectations of $25.41 billion; adjusted earnings per share were $2.06, better than market expectations of $1.86; the operating profit margin reached 22%, a significant increase from 15.7% in the same period last year; free cash flow profit margin increased from 8% in the same period last year to 12.2%, reflecting the effectiveness of cost optimization. The core experiential business segment, which includes theme parks and cruise businesses, saw operating profit grow by 20% year-on-year to $3.02 billion, easing investor concerns regarding potential disruptions to the tourism industry from the conflict in the Middle East. The entertainment division's operating profit soared 64% to $1.68 billion, attributed mainly to box office successes including "Toy Story 5" and "The Devil Wears Prada 2." Overall, Walt Disney Companys performance this quarter reflects a "weak revenue, strong profit" pattern, with significant profit margin improvement driven by cost-cutting measures, but ongoing pressure on revenue growth remains a core risk, and the sustainability of long-term growth awaits confirmation from future earnings reports. As of writing, Walt Disney Company was up nearly 3% in pre-market trading on Wednesday. Key Economic Data and Event Forecasts 22:00 Beijing Time: U.S. July ISM Non-Manufacturing PMI 04:05 next day Beijing Time: Federal Reserve Governor Lisa Cook to speak on economic outlook Earnings Forecast Thursday morning: SanDisk (SNDK.US), Western Digital Corporation (WDC.US), AppLovin (APP.US), Occidental Petroleum Corporation (OXY.US) Thursday pre-market: ConocoPhillips (COP.US), ZAI LAB (ZLAB.US)