US stock outlook | Futures of the three major stock indexes are rising, oil prices are diving, and US stocks will welcome a week of non-agricultural data and heavy earnings reports

Pre-market market trends

1. On August 3 (Monday), the futures of the three major US stock indexes rose sharply before the US stock market. As of press release, Dow futures were up 1.08%, S&P 500 futures were up 0.64%, and NASDAQ futures were up 0.32%.

2. As of press release, the German DAX index rose 1.50%, the UK FTSE 100 index rose 0.23%, the French CAC40 index rose 1.30%, and the European Stoxx 50 index rose 1.01%.

3. As of press release, WTI crude oil fell 5.91% to $79.67 per barrel. Brent crude oil fell 4.98% to $83.55 per barrel.

Market news

US stocks ushered in a week of non-agricultural data and super earnings reports: SpaceX's listing debut begins, can AI companies' financial reports withstand market capitalization trials? This week, the global market will welcome the release of the latest US non-farm payrolls data, purchasing managers' index (PMI) data, and a new round of intensive US corporate earnings reports. On Friday, the US Bureau of Labor Statistics will release the July Non-Farm Payroll Report. If employment growth in July is significantly stronger than expected, treasury bond yields and the US dollar may continue to rise; if the labor market cools down rapidly, the market focus may shift back from inflation to economic growth risks. In terms of financial reports, SpaceX will also release its first quarterly earnings report since listing after the US stock market closes on Tuesday. Given that SpaceX's stock price fluctuated greatly after listing, this first earnings report will help investors assess whether the company's business model, profitability, and cash flow can support its high valuation. Furthermore, the financial reports of Palantir, AMD, and SanDisk will be an important window for the market to measure AI software demand and data center chip growth.

New York Federal Reserve Chairman Williams: Interest rates are currently in a good position, and inflation is expected to begin to decline in the second half of the year. “My personal prediction is that inflation will fall in the second half of this year and fall further next year,” Williams said in an interview. He added: “I think the current position of monetary policy is well suited to support this path of falling inflation.” Williams said that if inflation performance falls short of expectations, the Federal Reserve may need to take action. He said, “If the economic development trajectory cannot push inflation back to the target level of 2%, then in my opinion, it is definitely appropriate for the Federal Reserve to take action to ensure that the economy returns to a trajectory that can reduce inflation to 2%.”

Wall Street Bank: The fiercest sell-off in US stocks may have passed, but “bottoming out” is still risky. After a month of intense turbulence, the US stock market stands at a critical crossroads. On the one hand, data from institutions such as J.P. Morgan Chase shows that the technology sector's multi-month deleveraging process is nearing its end, and net exposure and CTA positions for leveraged ETFs and hedge funds have all dropped significantly from extreme levels. On the other hand, concerns about inflation are heating up again, interest rate paths are full of uncertainty, and doubts about the return on AI capital expenditure have not dissipated. Macro risk is taking over position clean-up and becoming the core driving force for market pricing. In August, major Wall Street banks such as J.P. Morgan Chase, Goldman Sachs, and Société Générale intensively released strategy reports, outlining a complicated picture of “deleveraging nearing its end, valuations being re-reasonable, but macro risks are still accumulating.” For example, Goldman Sachs's top trading team warned that although the deleveraging process is nearing its end, the risks have not been fully resolved, and multiple key events will still suppress the market; limited by seasonal fund outflows and insufficient institutional willingness to attack, the upward trend in US stocks lacked “fuel” in August.

Say goodbye to mindless skyrocketing! The US stock earnings season was extremely divided. Wall Street agreed that AI investment has entered a “testing period”, and only profits can overcome the turbulence. Entering the end of the 2026 second quarter earnings season, global investors are experiencing a cognitive reshaping: the artificial intelligence (AI) narrative is far from over, but the “flying pig” style of general rise is no longer there. Faced with the huge investment of real money from enterprises, the market began to use foot voting to strictly distinguish between “money burners” and “renters.” Despite this, some major Wall Street banks, represented by Goldman Sachs, believe that the current sharp turmoil in the AI sector does not mean the starting point of a market collapse; on the contrary, it is a normal consolidation of the long-term bull market supported by strong profits. Notably, the forces supporting the market are spreading outward from a single AI winner, which provides a thicker safety cushion for the current bull market. Goldman Sachs emphasized that weighted indices such as the S&P 500, which measure the breadth of the market, are continuing to rise along with the steady improvement of profit expectations, which shows that even after excluding the huge impetus of a few tech giants, broader corporate fundamentals are still healthy.

International oil prices dive! Trump halted attacks on Iran and initiated negotiations, fueled by OPEC+'s announcement of production increases. US President Trump announced the cancellation of large-scale military attacks on Iran and said negotiations aimed at reopening the Strait of Hormuz will soon resume. Meanwhile, OPEC+ approved a slight increase in production of about 188,000 b/d starting in September, officially completing a round of gradual retracement of voluntary production cuts since last year. Under the dual expectations of geographical easing and supply-side normalization, market panic suddenly cooled down. However, on August 3, local time, Iranian Foreign Ministry spokesman Bagae said that Iran currently has no talks with the US. Iran is in talks with Oman. The topic involves the Strait of Hormuz. Bagae also said that the situation in the Strait of Hormuz will not change significantly while the US continues to violate the cease-fire agreement and memorandum of understanding.

Individual stock news

US technology stocks had mixed ups and downs before the market. Before the US stock market on Monday, as of press release, the “Big Seven US stocks” were all higher except NVDA.US (NVDA.US); SpaceX (SPCX.US), Intel (INTC.US), and AMD (AMD.US) fell nearly 2%; memory chip stocks generally fell before the market - SK Hynix (SKHY.US), Micron Technology (MU.US), SanDisk (SNDK.US), and Seagate (STX.US) fell by more than 3%; Western Digital (WDC.US) fell nearly 3%; Western Digital (WDC.US) fell nearly 3%; Optical Communications (WDC.US) fell nearly 3% Inc ( AXTI.US) fell nearly 5%, Astera Labs (ALAB.US) fell nearly 3%, and Coherent (COHR.US) and MRVL.US (MRVL.US) fell more than 2%.

Will Tesla (TSLA.US) divest its business in China due to merger with SpaceX (SPCX.US)? Musk retorted: it was never discussed; it was just “ridiculous fake news.” Tesla CEO Elon Musk has denied reports that the electric vehicle giant is considering selling its Chinese business. Earlier, it was reported that the sale of the Chinese business could pave the way for a potential merger between Tesla and SpaceX. According to the report, Tesla executives have been asked to prepare for the separation of the business from China, and possible plans also include splitting the Chinese business and listing or closing the business. Musk denied the reports. Musk said, “This matter has never come up in any discussion.” He then called the report “ridiculous fake news” and urged people to “assume the news is fake until proven to be true.”

A torrent of AI “manufacturing” vulnerabilities has crushed the audit chain, Apple (AAPL.US) has set limits to deal with the wave of false reports, and a wake-up call for cybersecurity costs has sounded. Apple is limiting the number of security breaches submitted by external researchers at once. Previously, the surge in AI-generated reports overwhelmed its review process. This phenomenon highlights the new challenges facing the software industry while artificial intelligence accelerates cyber defense and cyber attacks. The tech giant said it had introduced new restrictions in June after its security team was overwhelmed by a slew of so-called AI-generated reports — reports often identifying bugs that didn't actually exist. Researchers can now only submit a limited number of open reports before applying for higher quotas, while Apple uses AI internally to help prioritize incoming reports.

Reshape the global pharmaceutical industry landscape! AstraZeneca (AZN.US) plans to buy Bristol-Myers Squibb (BMY.US), or create the largest pharmaceutical merger and acquisition in history. According to people familiar with the matter, AstraZeneca is already discussing the acquisition of Bristol-Myers Squibb. If this super deal is reached, it will create one of the world's largest pharmaceutical companies. AstraZeneca is moving towards an ambitious goal of $80 billion in sales by 2030, and hopes to enter the lucrative weight loss market with a variety of drugs under development. With a market capitalization of $133.4 billion, Bristol-Myers Squibb can provide AstraZeneca with a larger foothold in the US market. However, an analyst at Mizuho believes that investors may object to the merger plan because AstraZeneca's earnings per share are expected to grow by 10% or more over the next five years, while Bristol-Myers Squibb's earnings per share may decline for the rest of the decade. As of press release, before the US stock market on Monday, AstraZeneca fell more than 4%, while Bristol-Myers Squibb rose more than 6%.

Demand for AI data centers and electrical infrastructure heated up, and Prysmian spent $3.8 billion to acquire Atkore (ATKR.US). Italian cable giant Prysmian SpA issued a statement on Monday announcing that it has reached an all-cash acquisition agreement to acquire American electrical manufacturer Atkore. Under the agreement, Prysmian will acquire Atkore, headquartered in Harvey, Illinois, at a price of $95 per share, with a corresponding corporate value of approximately $3.8 billion. Atkore mainly produces various products and systems for electrical wiring and protection. The acquisition is the latest step in Milan-based Prysmian's expansion strategy in the US market. As of press release, Atkore's pre-market share surged more than 27% on Monday.

Key economic data and event forecasts

Beijing time 22:00 US ISM manufacturing PMI for July

Performance Forecast

Tuesday morning: Palantir (PLTR.US), Onsemi Semiconductors (ON.US), Snap (SNAP.US)

Tuesday pre-market: Toyota (TM.US), British Petroleum (BP.US), HSBC (HSBC.US), McDonald's (MCD.US), MSD (MRK.US), Caterpillar (CAT.US), Pfizer (PFE.US)