Preview of US Stock Market | The three major stock index futures are mixed, AI stocks continue to decline, and U.S. September PPI and retail sales are about to be revealed.

Pre-market Market Movements 1. On Thursday, October 15, before the U.S. stock market opened, the three major U.S. stock index futures were mixed. As of press time, Dow futures rose 0.28%, S&P 500 index futures fell 0.27%, and Nasdaq futures fell 1.24%. 2. As of press time, Germany's DAX index fell 0.46%, the UK's FTSE 100 index rose 0.56%, France's CAC 40 index rose 0.18%, and the Euro Stoxx 50 index fell 0.86%. 3. As of press time, WTI crude oil rose 0.15% to $95.23 per barrel. Brent crude oil fell 1.31% to $104.67 per barrel. Market News U.S. September PPI to be revealed soon: The inflation shock from soaring diesel prices is far from over. The U.S. September Producer Price Index (PPI) will be released at 20:30 Beijing time on Thursday. This data will become an important reference for the market in assessing the surge in diesel prices and its inflationary impact before the November midterm elections. Diesel prices already rose sharply in August, and there is usually a time lag before fuel costs are transmitted from production and transportation links to consumers, so price pressure on the corporate side may still be building. Changes in diesel prices are reflected more in PPI than immediately in CPI. Producer price data can provide early clues about the future direction of consumer prices, but previous PPI readings have not yet fully reflected the full impact of higher diesel prices. He expects the year-over-year readings for the relevant data in September and October may rise noticeably. This is also why Thursday's PPI is drawing attention: the market not only needs to look at the headline index, but also needs to judge whether rising diesel costs are beginning to affect producer selling prices more broadly. Another vote for the Fed to hold steady in October: Daly says there is enough time to make the right decision. San Francisco Fed President Mary Daly said the Federal Reserve may need to raise short-term interest rates further to curb excessively high inflation, but she suggested there is no need to do so at the Fed's October meeting. Daly said in an interview: "We are more likely to need further adjustments, but as far as I am concerned, the timing of these adjustments is still something we are weighing," "I do not feel an urgent need to decide with limited information. I think we have the time we need." Regarding the U.S. September CPI data released on Wednesday, she said that although the initial reaction was "strong" - interest rate futures traders quickly bet on a Fed rate hike in October - investors "calmed down" after dissecting the data. Higher gasoline prices drove the headline increase, while underlying inflation, although still sticky, did not rise sharply. The "master forecaster" who was the first to predict the September rate hike changes tune: The Fed may go straight to 50 basis points in December. A forecaster who was the first to predict the Fed's most recent rate hike now says a larger 50-basis-point increase may come in December. Prestige Economics President Jason Schenker said he believes the Fed is unlikely to raise rates at this month's meeting. Instead, he believes the Fed may let the September rate hike "catch its breath" before possibly making a larger increase in December. Schenker said, "By December, if inflation has not been contained in a more meaningful way after the September hike, they may choose to raise rates by 50 basis points rather than 25 basis points, taking a bigger bite." In addition, Schenker believes the Fed will not have enough information at its October meeting to act again, because a large portion of the data released on Wednesday was collected before the Fed's September rate hike. "I think there are not enough data points to give them the kind of confidence they may need." BTIG: Inflation beat expectations, yet Treasury yields "cannot rise"; "rates and Nasdaq falling together" may become the most painful trade. U.S. investment bank BTIG said that after inflation data came in above expectations, the bond market showed a typical "news failure," confirming that U.S. Treasury yields (SHY, TLT, IEF) have already reached a tactical top. This change has planted a highly contrarian trap trade for the stock market - "rates falling while the Nasdaq also falls." Krinsky warned that the truly painful trading direction is exactly the opposite - rates and tech stocks falling in tandem. For investors, this means the previous one-sided logic of "betting on rate cuts and buying tech stocks" may be being replaced by a new combination: falling yields no longer equate to a rebound in risk appetite, but rather look more like a repricing of growth and earnings expectations. "Big Short" Burry issues another U.S. stock warning: If the "Magnificent Seven" follow semiconductors lower and bond yields fall, Wall Street may face a "Bloody October." Burry proposed a bearish "Bloody October" scenario: if the "Magnificent Seven" U.S. stocks follow semiconductor shares lower and bond yields fall at the same time, then his conviction in this scenario would become even stronger. The decline in U.S. Treasury yields on Wednesday failed to benefit tech stocks. Burry pointed out that this phenomenon is worth watching. He said: "Although the general market view is that lower yields are good for stocks, the current pain trade is still falling rates and a falling Nasdaq index." What needs to be watched next is whether weakness in semiconductor stocks spreads to the "Magnificent Seven." Burry said: "We have already seen semiconductor stocks and rates fall together, but if in the end we also see the 'Magnificent Seven' fall along with rates, then that will further strengthen our judgment of a 'Bloody October.'" JPMorgan warns: This tech stock selloff is completely different from July! Retail investors have given up buying the dip, and short-squeeze ammunition has dried up. JPMorgan's latest research report pointed out that the current decline in AI infrastructure stocks is clearly worse than the correction in July last year. Retail investors have so far lacked "buy-the-dip" behavior, and multiple unfavorable factors - including a buyback flow cliff, thin short positioning, and the relatively large scale of leveraged ETFs - have made the technical support base for this rebound far more fragile than last time. A team led by strategist Nikolaos Panigirtzoglou, after comparing key indicators one by one including fund flows, short positions, ETF structure, and corporate buybacks, concluded that the current market lacks many of the key catalysts that drove the rapid repair in stock prices after last July's correction. The report also noted that despite the recent pullback, cyclical stocks have not entered oversold territory from the perspective of positioning and fund flows, which means downside risk remains considerable, and a full recovery in cyclicals requires multiple conditions to align, including lower bond yields, strong earnings, and a stabilizing labor market. Individual Stock News The AI stock selloff continues. Before the U.S. market opened on Thursday, as of press time, chip stocks were broadly lower. SK Hynix (SKHY.US) fell more than 7%, SanDisk (SNDK.US), Western Digital Corporation (WDC.US), and Seagate Technology Holdings PLC (STX.US) fell more than 5%, Micron Technology, Inc. (MU.US) fell nearly 5%, Intel Corporation (INTC.US) fell more than 4%, AMD (AMD.US) fell more than 3%, and Qualcomm (QCOM.US), NVIDIA Corporation (NVDA.US), and Broadcom Inc. (AVGO.US) each fell nearly 2%. Optical communications stocks were also hit: AXT Inc (AXT.US) fell more than 7%, Credo Technology (CRDO.US) fell more than 6%, Coherent (COHR.US) fell more than 5%, and Marvell Technology, Inc. (MRVL.US), Astera Labs (ALAB.US), Corning Inc (GLW.US), and Lumentum (LITE.US) all fell more than 4%. Stocks in the AI infrastructure sector that were hit by concentrated selling on Wednesday extended their declines in pre-market trading: CoreWeave (CRWV.US) fell nearly 7%, Nebius (NBIS.US) fell more than 4%, Oracle Corporation (ORCL.US) fell more than 2%, and Dell Technologies, Inc. Class C (DELL.US) fell more than 4%. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) Q3 net profit rose 68.7% year over year, beating expectations! AI orders poured in, and 2nm process contributed 8% of wafer revenue. Driven by continued inflows of AI orders, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR Q3 consolidated revenue was NT$1.4942 trillion ($46.72 billion), up 50.9% year over year and up 17.6% quarter over quarter, exceeding the company's own guidance range of $44.6 billion-$45.8 billion; net profit attributable to shareholders was NT$763.06 billion, up 68.7% year over year and up 8.0% quarter over quarter, marking the sixth consecutive quarter of record quarterly results and the 11th consecutive quarter of profit growth; diluted earnings per share were NT$29.43, above the market estimate of about NT$28.3. Fourth-quarter revenue guidance is $52.3 billion-$54.3 billion - the midpoint implies another increase of about 14% from the third quarter, far above the market estimate of $50.35 billion. By process node, the most advanced 2nm shipments accounted for 8% of third-quarter wafer sales value (3% in the previous quarter), 3nm accounted for 33%, 5nm accounted for 28%, and 7nm accounted for 10%, with advanced processes (7nm and below) accounting for 79% in total - higher volumes and prices at advanced nodes were the core reason revenue beat expectations. As of press time, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR fell more than 2% in Thursday's U.S. pre-market trading. Strong demand for mobile network equipment! Telefonaktiebolaget LM Ericsson Sponsored ADR Class B (ERIC.US) Q3 profit beat expectations, but component costs may weigh on next year's gross margin. Telefonaktiebolaget LM Ericsson Sponsored ADR Class B third-quarter profit beat analyst expectations, mainly benefiting from strong demand for mobile network equipment in core markets. However, the company also warned that component costs will pressure gross margin next year. Financial data showed that Telefonaktiebolaget LM Ericsson Sponsored ADR Class B third-quarter GAAP earnings per share were SEK 1.77, SEK 0.22 above analyst expectations; revenue was SEK 59.5 billion, up 6% year over year and SEK 4.17 billion above analyst expectations. Adjusted gross margin was 47.7%, compared with 48.1% a year earlier. Adjusted earnings before interest, taxes, and amortization (EBITA) was SEK 10.1 billion (about $1 billion), above the analyst average estimate of SEK 7.93 billion. However, this metric was below SEK 15.8 billion a year earlier; adjusted EBITA margin was 17.0%, compared with 28.1% a year earlier. The company explained that the year-earlier period included a capital gain of SEK 7.6 billion, and excluding that factor, adjusted EBITA achieved growth. As of press time, Telefonaktiebolaget LM Ericsson Sponsored ADR Class B rose nearly 12% in Thursday's U.S. pre-market trading. AI two years late: Apple Inc. (AAPL.US) Apple Intelligence reportedly to enter the Chinese market in December, with the first batch of features "trimmed" and prospects uncertain. Multiple people familiar with the matter revealed that Apple Inc. plans to officially launch its artificial intelligence platform, Apple Intelligence, in China in December with the iOS 27.3 system update, meaning that after a long regulatory approval process, the service will finally enter one of Apple Inc.'s most important markets. The initial launch will cover the first batch of AI features introduced in the U.S. market two years earlier, including Genmoji custom emojis, notification summaries, writing tools, and the "Clean Up" feature that removes specific objects from photos, covering iPhone, iPad, and Mac devices. However, the new Siri AI assistant released this year and other new features will not be part of this lineup. Apple Inc. had previously expected the Chinese version of its AI to launch as early as May 2025, then postponed it to the end of 2025, and postponed it again to this spring. Delayed again! Rocket Lab (RKLB.US) Neutron rocket first flight postponed to 2027, pre-market shares plunge. Rocket Lab once again postponed the first flight plan for its new heavy-lift rocket Neutron, delaying the rocket's first launch to 2027. This is the latest in a series of delays for the Neutron project. Approaching the launch preparation stage, the company discovered new problems in the rocket's fuel tank manufacturing process, which triggered this postponement. Rocket Lab's current primary operational rocket is Electron, focused on launching small satellites into orbit. Neutron, by contrast, is positioned as a significantly upgraded launch vehicle capable of carrying heavier payloads and competing more directly with SpaceX's dominant Falcon 9 rocket. As of press time, Rocket Lab fell nearly 10% in Thursday's U.S. pre-market trading. Important Economic Data and Event Preview 20:30 Beijing time U.S. September PPI 20:30 Beijing time U.S. initial jobless claims for the week ended October 10 20:30 Beijing time U.S. September retail sales month over month Earnings Preview Friday morning: Alcoa Corporation (AA.US), Interactive Brokers Group, Inc. Class A (IBKR.US)