U.S. Stock Market Outlook | Trump plans to meet with business tycoons on Tuesday

1. On March 11th (Tuesday) before the US stock market opened, the three major US stock index futures rose together. As of the time of writing, Dow futures rose by 0.28%, S&P 500 index futures rose by 0.28%, and Nasdaq futures rose by 0.28%.

1. As of the time of writing, the German DAX index rose by 0.41%, the UK FTSE 100 index fell by 0.36%, the French CAC40 index fell by 0.10%, and the Euro Stoxx 50 index fell by 0.02%.

1. As of the time of writing, WTI crude oil rose by 1.33%, priced at $66.91 per barrel. Brent crude oil rose by 1.31%, priced at $70.19 per barrel.

Market News

If the economy enters a recession, the Federal Reserve may begin a series of rapid interest rate cuts in June. Institutional analysis indicates that the Federal Reserve will not lower interest rates at next week's policy meeting, but if concerns about an economic recession triggered by the trade war worsen and materialize, it may begin a series of rapid interest rate cuts in June. At least in the futures market, an increasing number of contracts are betting that the Federal Reserve will cut rates by 25 basis points in June, July, and October. This trend emerged after US President Trump’s remarks about a "transition period" last weekend, as he expressed concerns about tariffs imposed on multiple countries. Due to fears that his remarks signal an impending economic recession, US stocks and Treasury yields also fell on Monday.

Amid tariff clouds and market panic, Trump will meet with business tycoons on Tuesday. As industry leaders struggle to cope with the uncertainty of widespread tariffs and the market crash triggered by recession fears, US President Trump plans to meet with business executives on Tuesday. According to informed sources, Trump's meeting with the Washington "Business Roundtable" will include CEOs from across the country, including leaders from Wall Street financial giants. Trump's early victory sparked optimism among banking leaders, but as tariff policies took effect and concerns about economic slowdown intensified, doubts about his policy path deepened. Trump stated last week that there might be an "adjustment period" after the tariffs take effect. The current chair of the Business Roundtable is Cisco Systems CEO Chuck Robbins, and board members include JPMorgan CEO Jamie Dimon, Citigroup CEO Jane Fraser, and other heavyweight figures in the financial sector.

Trump's policies scare Wall Street! Economic worries intensify, and US stocks and other risk assets face a "bloodbath." On Monday, as economic worries swept across Wall Street, investors withdrew from almost all types of risk assets, exacerbating the decline in the US stock market U.S. tech stocks experienced their largest decline since 2022, with the Nasdaq 100 index plummeting nearly 4%. Cryptocurrency prices fell. Corporate bond issuances were canceled. Wall Street's fear index and key indicators measuring credit risk surged. U.S. Treasury bonds rose, with yields significantly dropping as they played the role of a last resort. In summary, there are growing concerns that U.S. President Donald Trump's tariff increases, spending cuts, and geopolitical turmoil will push the U.S. economy into stagnation.

Support for Trump leads to a loss of over $200 billion for five billionaires. The hopes for market gains driven by Trump's second term have evaporated. The wealth of many billionaires sitting behind him at his inauguration has astonishingly shrunk. According to the Bloomberg Billionaires Index, the combined wealth of five of them has evaporated by as much as $209 billion. Compared to the day Trump was sworn in (January 20), Elon Musk's personal net worth has decreased by $148 billion, Jeff Bezos's personal wealth has dropped by $29 billion, Google co-founder Sergey Brin has lost $21 billion, and Mark Zuckerberg and Bernard Arnault have seen their wealth evaporate by $6 billion and $5 billion, respectively. The total wealth loss for these five billionaires amounts to $209 billion. Just yesterday alone, the combined wealth of the five billionaires decreased by $49.78 billion.

As U.S. stocks face "Black Monday," strategists say the momentum factor may be bottoming out. U.S. stocks had a strong rally in 2024, but the momentum factor suffered a setback in 2025 after last year's boom. Recently, the U.S. stock market has faced frequent "bloodbaths," with Trump's erratic tariff policies unsettling investors. However, veteran market strategist Marco Kolanovic stated on Monday that the pain may soon end. He believes there is potential for a rebound in the momentum factor following the sharp decline in the Nasdaq 100 index. The tech-heavy Nasdaq 100 index fell 3.8% during Monday's U.S. stock sell-off, marking its largest single-day percentage drop since a 4.1% decline in August 2022. On Monday, the Nasdaq 100 index fell below its 200-day moving average. "The momentum factor may be bottoming out; today's drop in the Nasdaq 100 index is quite significant."

JP Morgan raises the probability of a U.S. recession to 40%. Economists at Wall Street investment bank JP Morgan have raised the risk of a U.S. recession this year from 30% at the beginning of 2025 to 40%. Analysts wrote, "Due to extreme policies in the U.S., we believe the risk of a recession this year is high." Previously, it was reported that Morgan Stanley economists downgraded their U.S. economic growth expectations last week and raised their inflation forecasts. The bank predicts that the U.S. GDP growth rate will be only 1.5% in 2025 and will drop to 1.2% in 2026. Goldman Sachs economists also raised the 12-month recession probability from 15% to 20%.

Goldman Sachs: The scale of the hedge fund "de-leveraging crisis" is comparable to the early days of the COVID-19 pandemic. In a report released on Monday, Goldman Sachs pointed out that last Friday, the scale of hedge funds closing positions in individual stocks reached the highest level in over two years, with some trading activities comparable to March 2020, when portfolio managers were reducing market exposure during the pandemic. Due to concerns that President Donald Trump's tariff policies could drag the world's largest economy into recession, major U.S. stock indices fell sharply on Monday, with the Nasdaq index dropping 4% Typhon Capital Management CEO James Koutoulas stated, "This is a typical deleveraging crisis." Goldman Sachs detailed that the scale of hedge fund sell-offs of individual stocks is the largest in over two years.

Citigroup upgrades China's stock market rating to overweight and downgrades U.S. stocks, stating that the "American exceptionalism" is on pause. Citigroup strategists downgraded the rating of U.S. stocks from overweight to neutral while upgrading the rating of Chinese stocks to overweight, stating that "American exceptionalism" has at least paused. Dirk Willer, Citigroup's global head of macro research and asset allocation, wrote in a report that since October 2023, Citigroup has been overweight on U.S. stocks, but the cracks in the ability of U.S. stocks to outperform the market have become more apparent. Meanwhile, he noted that considering DeepSeek's breakthroughs in artificial intelligence technology, government support for the tech industry, and still low valuations, the Chinese stock market looks very attractive even after the recent rebound.

Individual Stock News

Kohl's (KSS.US) Q4 net sales of $5.175 billion, down 9.4% year-on-year. Kohl's Q4 net sales were $5.175 billion, down 9.4% year-on-year, with an estimate of $5.18 billion; comparable sales fell 6.7%; Q4 earnings per share were $0.43, compared to $1.67 in the same period last year, with an estimate of $0.72; Q4 gross margin was 32.9%, compared to 32.4% in the same period last year, with an estimate of 32.7%; Q4 operating profit was $126 million, with an estimate of $185.8 million; same-store sales fell 6.5%, with an estimate of a 6.99% decline. Kohl's expects same-store sales to decline by 4% to 6% for the year, with market estimates at a decline of 0.55%; expects annual operating margin of 2.2% to 2.6%, with market estimates at 3.13%; expects annual earnings per share of $0.10 to $0.60, with market estimates at $1.24; expects annual capital expenditures of $400 million to $425 million, with market estimates at $497.8 million.

Cloud business cooling off? Oracle (ORCL.US) Q3 revenue misses expectations, but full-year guidance unexpectedly strong. Oracle's third-quarter performance showed that the sales and profit forecasts for the current quarter fell short of analysts' expectations. Third-quarter sales grew 6% year-on-year to $14.1 billion, while analysts' average expectation was $14.4 billion. Excluding certain items, earnings per share were $1.47, while the average analyst expectation was $1.49. Oracle stated that for the quarter ending in May, its sales would grow by 8% to 10%, while analysts expected an 11% increase. The earnings per share, excluding certain items, would be around $1.61 - $1.65, while the average expectation was $1.77. Infrastructure revenue grew 51% year-on-year (at constant exchange rates) to $2.7 billion, while application revenue grew 10% year-on-year to $3.6 billion.

Yalla Technology (YALA.US) Q4 revenue exceeds expectations, net profit grows 10% year-on-year. Yalla Technology's Q4 revenue was $90.8 million, a year-on-year increase of 12.2%, exceeding the market's general expectation of $86.6 million; diluted earnings per share were $0.20, compared to $0.19 in the same period last year By business segment, revenue from chat services was $59.8 million, and revenue from gaming services was $30.8 million. The net profit for the fourth quarter of 2024 was $32.53 million, a year-on-year increase of 9.7%, with a net profit margin of 35.8%. Non-GAAP net profit was $35.7 million, a year-on-year increase of 6.8%, with a Non-GAAP net profit margin of 39.3%. The average monthly active users (MAU) were 41.4 million, a year-on-year increase of 14.4%. Looking ahead, the company expects revenue for the first quarter of 2025 to be between $75 million and $82 million, below the widely expected $83.3 million.

Hesai Technology (HSAI.US) announces latest financial report: Annual delivery volume doubles for four consecutive years, 2024 revenue reaches a record high. Hesai achieved an annual revenue of 2.08 billion yuan in 2024, with fourth-quarter revenue of 720 million yuan. In the fourth quarter, Hesai secured the largest order to date in the overseas front-mounted mass-produced lidar field, reaching a multi-year exclusive cooperation with a top European OEM, covering multiple models of its fuel vehicles and new energy vehicles. In the domestic market, Hesai's ATX is being planned as a standard configuration for mass production models by many OEM customers in 2025. So far, Hesai Technology has established mass production cooperation relationships with 120 models from 22 domestic and foreign automotive manufacturers. According to public data, among the top 10 automotive manufacturers in China by market value in 2024, 9 have already established mass production cooperation relationships with Hesai.

Alphabet (GOOGL.US) seeks to deploy small nuclear reactors, New Era (NEE.US) optimistic about co-location deployment opportunities. Ruth Porat, Chief Investment Officer of tech giant Alphabet, stated that the company is seeking to deploy smaller nuclear reactors through a deal with Kairos Power to reduce the costs of building new nuclear reactors. The agreement was signed last October and is part of Alphabet's efforts to meet the growing electricity demand for artificial intelligence workloads. According to the agreement, the first small modular reactor is expected to be operational by 2030, with more reactors to be deployed by 2035. At S&P Global's CERAWeek conference, Porat noted that cost overruns and delays hinder new nuclear projects, stating that companies need to act quickly to build new nuclear power plants and replicate the construction process to lower the cost curve.

ServiceNow (NOW.US) spends $2.85 billion to acquire AI assistant provider Moveworks. ServiceNow, focused on providing cloud computing platforms to help global enterprises efficiently optimize digital workflows, confirmed the acquisition of AI company Moveworks for $2.85 billion in cash and stock, marking its largest acquisition to date. The transaction is expected to be completed in the second half of 2025, subject to customary regulatory approvals and closing conditions. This acquisition will combine ServiceNow's AI and automation capabilities with Moveworks' front-end AI assistant and enterprise search technology, enabling ServiceNow to accelerate its AI solutions to improve customer interactions

Important Economic Data and Event Forecast

Beijing time 22:00: U.S. January JOLTs Job Openings (10,000).

The next day at Beijing time 04:30: U.S. API Crude Oil Inventory Change for the week ending March 7 (10,000 barrels).

The next day at Beijing time 00:00: EIA releases the Monthly Short-Term Energy Outlook report.

Earnings Forecast

Wednesday pre-market: EHang (EH.US), hello Group (MOMO.US)