US stock outlook | The three major stock index futures had mixed ups and downs, SK Hynix (SKHY.US)'s US stock debut hit tonight
Pre-market market trends
1. Before the US stock market on July 10 (Friday), futures for the three major US stock indexes had mixed ups and downs. As of press release, Dow futures were up 0.09%, S&P 500 futures were down 0.10%, and NASDAQ futures were down 0.37%.
2. As of press release, the German DAX index fell 0.01%, the UK FTSE 100 index fell 0.01%, the French CAC40 index fell 0.11%, and the European Stoxx 50 index fell 0.24%.
3. As of press release, WTI crude oil rose 0.65% to $72.55 per barrel. Brent crude rose 0.76% to $76.88 per barrel.
Market news
The US and Iran “talk while fighting”. US officials say technical negotiations between the two sides have not stopped. On the 7th and 8th, the US military launched military attacks on Iran for two consecutive days in response to Iran's recent attack on merchant ships passing through the Strait of Hormuz, while Iran launched missile and drone attacks on US facilities in countries such as Bahrain, Kuwait, Qatar, and Jordan. Meanwhile, the Israeli side reported on the 10th that Israel has indicated to the US that Israel is willing to participate in further US military operations against Iran and is currently awaiting a decision from US President Trump. According to the news, Israel believes that a new round of military conflict between the US and Iran may continue for several days. However, a US official said that the US is still committed to finding a solution to the Iran issue, and related technical negotiations are continuing. The US and Iran have maintained technical negotiations even after a new round of mutual attacks, which means that the two sides have not yet closed diplomatic exports. As a result, the market can moderately lower the probability that “the conflict will escalate again into an all-out war and the Strait of Hormuz will be interrupted for a long time,” but this by no means means that the geographical risk has been lifted.
AI investment has entered the “era of intensive farming”! J.P. Morgan Chase: Every transaction is an AI transaction. In the future, “how to invest” is more critical than “whether to invest”. As the artificial intelligence (AI) concept penetrates into every corner of the market, investors' perception of the AI theme is shifting from a “buy anything goes up” fanaticism to a more refined layout. David Lebovitz, a global market strategist at J.P. Morgan Asset Management, said that investors are becoming more and more adept at distinguishing between the potential risks and rewards of different aspects of the AI field, which is a critical lesson for Wall Street. Lebovitz clearly stated that there are significant structural differences within the AI industry chain. In his view, the demand for data center construction and operation will be more “structured” than semiconductor and hardware production — there may be a risk of an oversupply of chips. He said, “The supply risks I am concerned about are mainly in the chip sector and hardware sector. This is clearly where investor enthusiasm is highest, and historical experience shows that when enthusiasm is high, people tend to go too far.”
Be wary of bulls stepping on it! The high level operation of US stocks harbors “dark thunder”: the scale and cost of leveraged bets are skyrocketing, and the earnings season is testing the “financing bull market” to the limit. As US stocks hover at historic highs and technology stocks and AI concept stocks continue to attract fanatical attention, the US stock financing market is facing increasing pressure. According to Morgan Stanley data, on June 26, the cost of financing stock positions once climbed to a level about 200 basis points higher than the federal funds rate, the highest since December 2024. Although the quarterly settlement indicator has fallen back to 89 basis points, market participants warned that the structural factors driving up interest rates have not only not subsided, but have continued to accumulate. Martin Tobias, an American interest rate strategist at Morgan Stanley, said bluntly, “The risk of a surge in financing may continue to accompany us in the foreseeable future.” This leverage-driven financing pressure is becoming the most easily overlooked “dark thunder” when US stocks operate at a high level.
The oil market vision indicates that the risk of US inflation is underestimated! Pioneer Asset Management bucked the trend and placed US debt to protect against inflation. An unusual change in oil market indicators is prompting Pioneer Asset Management to buy insurance against US inflation that lasts longer than expected. Since the US and Iran reached a weak cease-fire agreement, crude oil prices have fallen sharply, but the decline in gasoline prices has far failed to keep up, causing the price difference between the two to widen to the highest level since 2022. Kourtney, head of international interest rates at Pioneer Active Management Fund, said he is closely monitoring the so-called “cracking spread” to find signs that the price of refined oil products may rise again and drive up inflation. Courtney said, “The question is whether this spread will return to normal, or will this low correlation evolve into a more structural characteristic and have an impact on the risk of inflation.” This trend prompted Kourtney and his team to establish long positions on US short-term inflation-protected treasury bonds (TIPS), while also buying break-even inflation trading positions with a longer-term yield curve.
Is the dollar moving from a “safe haven king” to a highly volatile asset? Global capital is chasing the AI theme of US stocks, and the fate of the US dollar seems to be tied to Nasdaq. Deutsche Bank said that in terms of financing itself, the US financial market relies more than ever on international capital flows into domestic companies' stocks rather than investing in their debts to raise capital on a large scale. This shift may expose the US dollar exchange rate to a higher level of risk. The bank said in a research report that geopolitical rift is weakening the will of international investors to hold US debt for a long time, while the AI boom means that more capital is flowing into the US stock market, leaving the US dollar more and more exposed to the uncertain life cycle of the cutting-edge technology industry. US external financing is shifting from countercyclical, long-term US debt funding to technology stock market funding that is more cyclical and relies more on AI narratives. As a result, the US dollar may gradually shift from a traditional safe-haven asset to a highly volatile risk asset that is highly linked to the NASDAQ 100 index, which has the title of a “global technology stock weather vane.”
Individual stock news
SK Hynix (SKHY.US)'s US stock “debut” is coming tonight! The AI investment boom has ushered in a critical stress test. South Korean memory chip giant SK Hynix will officially launch trading in the US market on Friday. SK Hynix set the issuance price of its American Depositary Receipts (ADR) listed in the US at $149 per copy, and the fund-raising scale is approximately US$26.5 billion. This will be the largest initial public offering (IPO) ever carried out by a foreign company in the US, surpassing Alibaba Group's previous $25 billion IPO record. According to reports, SK Hynix's ADR offering has been oversubscribed by more than 7 times. SK Hynix's ADR issuance attracted active subscription from investors, reflecting global capital's consensus on the pricing of the AI storage industry chain. But at the same time, this US listing debut will be a key test for whether investors still believe that the AI boom can continue, especially after the recent pullback in semiconductor stocks.
Zuckerberg denies that Meta (META.US) has excessive computing power: I don't know who in the industry feels that they have excess computing power. Meta CEO Zuckerberg said that Meta needs as many computing power resources as possible, but in a market where the resources required to operate and develop AI products are scarce, he is also considering whether leasing out part of Meta's AI infrastructure to external companies can bring higher value. Zuckerberg said it is reasonable to rent out computing power resources or consider such transactions. Zuckerberg said there is definitely potential to build a cloud business as long as we want it. That doesn't mean Meta has been overbuilt or has excess computing power. He said, “I don't know who in the industry feels they have excess computing power.” He added that Meta is currently making full use of all of its computing resources. As of press time, Meta's US stock rose nearly 4% in the premarket on Friday.
Delta Air Lines (DAL.US)'s Q2 earnings exceeded expectations, and travel demand withstood strong pressure on fuel costs. According to financial reports, Delta's Q2 adjusted revenue was US$17.66 billion, up 13.9% year over year; adjusted earnings per share were US$1.56, better than market expectations of US$1.51. The company said strong demand for high-end travel, business travel and international travel helped the company offset the impact of the highest quarterly fuel cost in history. The company reiterated its full-year profit guidance and expected adjusted earnings per share of $6.50 to $7.50 in 2026, far higher than analysts' general expectations of $5.97. As the first major US airline to announce quarterly results, Delta's earnings report provides an important window for the outside world to observe the business performance of the American airline industry after the escalation of the Middle East conflict — the situation in the Middle East led to a sharp rise in aviation fuel prices, and airlines cut flight plans and raised ticket prices before the peak summer travel season. Delta said fuel spending after Q2 adjustments reached $4.4 billion, up 77% year over year, a record high for the same period. As the war in the Middle East showed signs of ending, fuel costs have declined somewhat. However, the US once again launched a new round of military attacks against Iran this week, causing the market to worry once again. With limited progress in diplomatic efforts, the conflict may fully escalate again. No matter how the situation develops, American Airlines is likely to continue to maintain higher fares to make up for rising costs. As of press release, US stocks of Delta Air Lines fell more than 1% in the premarket on Friday, having previously risen nearly 4%.