Preview of US Stock Market | The three major stock index futures are mixed, the chip stock sell-off continues, and bank earnings season begins.

Premarket Market Trends 1. On Tuesday, October 13, in the U.S. premarket session, the three major U.S. stock index futures were mixed. As of press time, Dow futures were up 0.39%, S&P 500 futures were down 0.08%, and Nasdaq futures were down 0.70%. 2. As of press time, Germany's DAX index was up 0.23%, the UK's FTSE 100 was up 0.64%, France's CAC 40 was up 0.11%, and the Euro Stoxx 50 was down 0.14%. 3. As of press time, WTI crude oil was down 1.95% at $91.91 per barrel. Brent crude oil was down 1.74% at $104.79 per barrel. Market News The chip stock sell-off continues, and bank earnings season begins. The sharp decline in memory chip stocks has brought market doubts about the sustainability of the AI narrative to the forefront. From Seoul to Taipei and then to Philadelphia, the semiconductor sector came under collective pressure, with the Kospi plunging more than 5% on Tuesday, while the Philadelphia Semiconductor Index has fallen more than 7% from its high this month. The core of this sell-off is not on the demand side, but rather in the sudden change in the competitive landscape on the supply side and the strain in the capital chain. At the same time, as the latest Wall Street earnings reports are released one after another, large U.S. bank stocks are entering a correction range. The KBW Bank Index has fallen about 12% from its August high, exceeding the 10% technical correction threshold. Fed's Waller: Surging U.S. Treasury yields help curb demand, AI investment becomes a inflation driver. Federal Reserve Governor Christopher Waller said that the sharp rise in long-term U.S. Treasury yields is helping to curb demand in interest-rate-sensitive sectors such as housing and autos, thereby playing a certain role in tightening monetary policy. Waller said on Tuesday at an economic forum in New Delhi: "Will higher yields have an impact on interest-rate-sensitive sectors such as housing and autos? Of course they will." He noted that although this is not the Fed's intention, higher yields do "play a certain role." Waller also said that AI is also pushing up prices because the rapid construction of AI infrastructure is stimulating demand. Waller is one of many Fed officials who hope AI will eventually boost productivity. If AI can improve productivity, the economy could achieve stronger growth without triggering excessive inflation. But he said such returns may still take years to materialize, while AI-driven price pressures could last two to three years. Is the buying opportunity here after the yield surge? Wall Street giants such as Goldman Sachs Group, Inc. and Morgan Stanley are bullish on the outlook for a U.S. Treasury rebound. After weeks of selling pushed U.S. Treasury yields to multi-year highs, Wall Street strategists have begun to reassess the investment value of U.S. Treasuries. Institutions including Goldman Sachs Group, Inc., Morgan Stanley, and Citi believe that as U.S. Treasury yields climb sharply, bond valuation attractiveness is increasing. However, major institutions still have clear differences over the Fed's future rate path and the timing of a U.S. Treasury rebound. Goldman Sachs Group, Inc. believes that signs of stress are beginning to appear in the credit market, combined with improved investor positioning structure and market technical risks, which may create conditions for a U.S. Treasury rebound. Citi prefers short-term U.S. Treasuries, with its strategists saying that as inflation slows and wage growth weakens, the Fed is unlikely to raise rates to 2023 highs. Morgan Stanley also believes U.S. Treasury yields are already attractive, but at the same time advises investors to wait until after the Fed's policy meeting this month and the U.S. midterm elections before considering entry. Is the Fed's rate cut signal hidden in Walmart Inc.'s stock price? This indicator has once again sounded the recession alarm. Analysis by Jim Paulsen, former chief investment strategist at Leuthold Group, shows that Walmart Inc.'s stock price underperformed from May to August 2026, but since August, Walmart Inc.'s stock price has outperformed the S&P Global, Inc. luxury goods stock index by about 21%, and Walmart Inc.'s stock price has also risen about 8% from its late-August low. Paulsen believes this change in relative performance indicates that consumers may once again be tightening their budgets, meaning the U.S. economy is losing momentum, and future economic weakness may force the Fed to shift back toward easing policy. But if energy prices continue to rise and push overall inflation higher, or if corporate investment and consumer demand remain strong, policymakers may continue to maintain a tightening stance. In addition, the historical performance of this indicator has also attracted market attention. According to Paulsen's analysis, the "Walmart Inc. recession signal" rose significantly before each of the past four recessions, and since 1990, similar changes have appeared before the start of every Fed easing cycle. Goldman Sachs Group, Inc. and JPMorgan slam the brakes on AI infrastructure financing: only dare to take on $1.3 billion of a $5 billion AI loan, and even at 11% high interest they dare not fully underwrite it. JPMorgan and Goldman Sachs Group, Inc. took a rare step to limit their exposure to the sale of a $5 billion loan for AI startup Volta Infrastructure Holdings Ltd., because investors demanded higher yields for risky debt tied to the AI boom. The two banks are leading the issuance of the loan for Volta, a newly established AI cloud company. According to people familiar with the matter, the two banks underwrote a $1.3 billion term loan for Volta, while a $3.7 billion chip loan was not underwritten by the two banks - a move aimed at protecting themselves from potential risk. Volta's debt is being marketed to investors at a yield of about 11%, one of the highest borrowing costs in the leveraged loan market, which has become a popular channel for AI financing. ETF buying is not enough to support the broader market! Bank of America analysts predict: Can gold hold above $4,000 in the next three months? A precious metals research report recently released by Wall Street financial giant Bank of America Corp shows that the institution tends to put gold's $4,000 threshold over the next three months under multiple sell-off pressure tests - namely weak physical spot gold demand, gold ETF buying being unable to support the market alone, and even some global central banks possibly restarting gold sales. The institution's analysts expect that gold will find it difficult to continue fluctuating above the key $4,000 level over the next three months or so as it does now. Bank of America said that for gold to find a bottom and resume its long-term upward trend, the market needs clearer guidance from the Fed. Although a shift toward a dovish Fed monetary policy will become a more important driver for gold, if market concerns about currency value dilution heat up again, gold may also regain upward momentum. Individual Stock News JPMorgan (JPM.US) Q3 revenue and EPS missed expectations, dragged down by lower fixed-income trading. The earnings report showed that JPMorgan's Q3 revenue was $50.907 billion, up 8% year over year, below market expectations; adjusted earnings per share were $5.75, also below market expectations. Net profit was $15.305 billion, up 6% year over year. Net interest income was $27.1 billion, up 13% year over year. The earnings miss was mainly dragged down by lower fixed-income trading revenue and higher costs. Quarterly markets revenue was $10.3 billion, up 15% year over year. Among this, equity trading revenue was $4.954 billion, up 49% year over year; fixed-income trading revenue was $5.366 billion, down 4% year over year, significantly below market expectations of about $6 billion. CEO Dimon said all business lines performed well, and that "large fiscal deficits, sticky inflation, elevated asset prices, rising rates and the political situation in GEO Group Inc" are still evolving, and these forces are "perhaps manageable," but the company is "prepared for a wide range of outcomes." As of press time, JPMorgan was up nearly 1% in Tuesday's U.S. premarket, after previously falling more than 3%. Regulatory relief fails to deliver strong revenue generation, Wells Fargo & Company (WFC.US) Q3 revenue missed expectations. The earnings report showed that Wells Fargo & Company's Q3 revenue rose 2% year over year to $21.87 billion, but was below market expectations of about $22.32 billion; GAAP earnings per share were $1.87, up 13% year over year, slightly above market expectations. Q3 net interest income rose 5% to $12.52 billion; this was driven by higher loan and investment securities balances, repricing of fixed-rate assets amid lower rates, and balance sheet expansion in the markets business, partially offset by lower yields on floating-rate assets and higher costs on interest-bearing commercial deposits. Quarterly provision for credit losses was $1.029 billion, far above $681 million a year earlier, mainly reflecting higher reserves due to increased commercial and industrial loan and auto loan balances, while commercial real estate reserves declined somewhat. Since the Fed lifted its years-long regulatory asset cap on the bank, the bank has been able to deploy more balance sheet, giving it more room to compete for loans. Wells Fargo & Company relies on credit cards and auto loans to expand its consumer lending business. As of press time, Wells Fargo & Company was down more than 1% in Tuesday's U.S. premarket. UnitedHealth Group Incorporated (UNH.US) Q3 results beat expectations: lower medical loss ratio boosts profit, full-year earnings guidance raised again. The earnings report showed that UnitedHealth Group Incorporated's third-quarter revenue fell 0.4% year over year to $112.694 billion, still above market expectations of about $111 billion; adjusted earnings per share rose 61% year over year to $4.69, beating market expectations. Cost control was the main DRIVE behind the results. The quarterly medical loss ratio was 88.4%, better than analysts' expectations of 89.9% and 89.90% a year earlier, which the company attributed to insurance product design adjustments and new pricing. On guidance, the company raised its full-year 2026 adjusted earnings per share guidance to at least $20.50 (previously $19.50-$20.00), and raised its GAAP diluted earnings per share guidance to at least $19.50. This is the company's third upward revision to full-year guidance this year. According to LSEG data, analysts had previously expected the company's full-year 2026 adjusted earnings per share to be $19.86, and the lower end of the new guidance is already above consensus. As of press time, UnitedHealth Group Incorporated was up more than 1% in Tuesday's U.S. premarket. Johnson & Johnson (JNJ.US) Q3 profit beat expectations and full-year guidance raised! Innovative medicine business gained momentum, while the devices business still needs improvement. The earnings report showed that Johnson & Johnson's third-quarter sales rose 5.9% year over year to $25.4 billion, in line with general market expectations. Under GAAP, net profit plunged 95.9% year over year to $210 million, with diluted earnings per share of only $0.09 (compared with $2.12 a year earlier), mainly due to a one-time pre-tax charge of $5.519 billion related to a proposed talc litigation settlement. Adjusted net profit was $6.339 billion; adjusted earnings per share were $2.59, beating the consensus estimate of about $2.53, but still down 7.5% year over year (compared with $2.80 a year earlier). Innovative medicine business revenue rose 7.7% year over year to $16.757 billion, with new drug sales performance a highlight; the medical devices business was clearly weaker, with revenue up 2.5% year over year to $8.642 billion, of which overseas performance was basically flat. On guidance, Johnson & Johnson raised the midpoint of its full-year 2026 reported sales guidance to about $101.2 billion from about $101.1 billion (range $101.0-$101.4 billion), and raised the midpoint of adjusted earnings per share guidance to $11.10 from $11.04 (range $11.05-$11.15), both above consensus. As of press time, Johnson & Johnson was down more than 2% in Tuesday's U.S. premarket, and the weak performance of the medical devices business may be the main reason for the lukewarm market reaction. Apple Inc. (AAPL.US) will hold a smart home new product launch event on Tuesday. Apple Inc. will hold a "Welcome Home" themed event on local time October 13, focusing on its smart home product line. According to the latest revelations from well-known journalist Mark Gurman, in addition to the highly anticipated smart home hub HomeView, the new Apple TV 4K and new HomePod mini will also be released at the same event, with the latter two products expected to go on sale on October 30, while HomeView is expected to launch in mid-November. Although many industry observers expect that some upgrades to Apple TV and HomePod are merely modest performance improvements, chip iterations will actually bring unprecedented new capabilities to Apple Inc.'s smart home product line. These devices are expected to have stronger connectivity and further integrate Siri's artificial intelligence (AI) features. Important Economic Data and Event Preview Beijing time next day 04:00, 2028 FOMC voter and Boston Fed President Collins speaks Earnings Preview Wednesday premarket: ASML Holding NV ADR (ASML.US), Bank of America Corp (BAC.US), Morgan Stanley (MS.US), BlackRock, Inc. (BLK.US)