U.S. Stock Market Outlook | On the eve of "Liberation Day," Federal Reserve officials continue to suppress interest rate cut expectations!

Pre-Market Market Trends

1. As of April 1 (Tuesday), U.S. stock index futures are all down before the market opens. As of the time of writing, Dow futures are down 0.60%, S&P 500 futures are down 0.49%, and Nasdaq futures are down 0.51%.

1. As of the time of writing, the German DAX index is up 1.08%, the UK FTSE 100 index is up 0.63%, the French CAC40 index is up 0.75%, and the Euro Stoxx 50 index is up 0.85%.

1. As of the time of writing, WTI crude oil is down 0.14%, priced at $71.38 per barrel. Brent crude oil is down 0.12%, priced at $74.68 per barrel.

Market News

On the eve of "Liberation Day," Federal Reserve officials continue to suppress interest rate cut expectations! Emphasizing that tariffs may exacerbate U.S. inflation. Last week, in 2025, Boston Federal Reserve President Collins and Chicago Federal Reserve President Goolsbee, both with voting rights on the Federal Open Market Committee (FOMC) monetary policy, emphasized that higher price pressures in the U.S. may persist, supporting the Fed's decision to keep interest rates stable for an extended period. This week, the third-ranking official of the Federal Reserve, New York Fed President Williams, who has permanent voting rights on the FOMC during his term, also stated that although baseline forecasts indicate inflation will remain relatively stable, there are significant upside risks to inflation this year due to the enormous uncertainty brought about by Trump's tariff measures, further raising the threshold for Fed interest rate cuts. Williams mentioned that the Fed is currently unclear about the long-term specific impact of Trump's tariff policy on the U.S. economy, but will closely monitor subsequent policy developments and economic data—especially price and activity changes in industries affected by tariff policies. He added that indirect effects may take years to manifest.

U.S. stock earnings "lose momentum"! Over 60% of S&P component stocks sound the earnings alarm. Recent analysis shows that the earnings outlook for large U.S. companies in the first quarter may be overshadowed. A report released by FactSet indicates that among the 107 S&P 500 component companies that have issued first-quarter earnings guidance, 68 have provided negative guidance (FactSet defines negative guidance as a company's forecast value or median of the forecast range being lower than the pre-release market consensus expectation). FactSet stated that this number is significantly higher than the average levels of the past five and ten years. Meanwhile, according to FactSet data, the number of companies issuing optimistic earnings guidance is below historical averages. Current investors are closely monitoring the operational performance of large companies to gauge the future trend of U.S. stocks Under the "double strangulation" of Trump's tariffs, the U.S. economy sounds the alarm for stagflation. According to the latest survey, the uncertainty of the Trump administration's policies and the comprehensive new tariffs are jointly pushing the U.S. economy towards a stagflation outlook. A survey of 14 economists on GDP and inflation forecasts shows that economic growth in the first quarter is expected to be only 0.3%, a significant slowdown from 2.3% in the fourth quarter of 2024, potentially marking the weakest performance since the pandemic recovery period in 2022. Meanwhile, the core PCE inflation indicator favored by the Federal Reserve is expected to remain at a high level of 2.9% for most of the year, only falling back in the fourth quarter. Additionally, although the market seems to expect the Federal Reserve to cut interest rates, it may be difficult for the Fed to justify rate cuts unless inflation begins to decline more noticeably by the end of the year.

Is the "dancing moment" for the dollar approaching? Wells Fargo bets that a new round of global trade wars will drive the dollar to soar. The foreign exchange strategist team at Wells Fargo recently pointed out that the new round of global trade wars initiated and led by Trump will make the dollar one of the market winners. This year, the aggressive tariff plans led by the Trump administration have triggered turmoil in global financial markets, and the dollar seems to have lost its so-called "safe-haven property"—the market's concerns about rekindled inflation and economic stagnation have dragged the dollar down in sync with the U.S. stock market, which is rare during periods of market turmoil. However, led by Aroop Chatterjee, Wells Fargo's foreign exchange strategists stated that the dollar's decline this year may only be temporary. Based on different models measuring the extent of U.S. tariffs and the responses of various countries, the dollar's new round of rebound could range from 1.5% to 11%. According to the Wells Fargo strategist team's view, their bullish logic on the dollar is based on: 1) Demand shift effect: U.S. tariffs will weaken American consumers' demand for foreign goods, thereby suppressing foreign currencies; 2) Monetary policy support: Inflation pressures may force the Federal Reserve to maintain a high interest rate policy for the remainder of the year, thus continuously enhancing the real yield of the dollar compared to other currencies; 3) Asymmetric returns: If other countries do not retaliate substantively, the rebound of the dollar will be very strong, and the intensity of retaliation will determine the extent of diminishing dollar returns.

Gold stands at a high of $3,100! Wall Street remains bullish: Macquarie bets on a surge to $3,500 in Q3! Goldman Sachs boldly claims it could break $4,000 by year-end! As of the time of writing, spot gold has risen above $3,130 per ounce, and gold futures have risen above $3,160 per ounce. The bullish trend in gold shows no signs of slowing down, and new favorable factors continue to emerge to support the current historical high prices. Macquarie expects that the enormous uncertainty of the global trade war and Trump's policies will drive strong demand for gold among investors, potentially pushing gold significantly up to a record high of $3,500 per ounce in the third quarter. Goldman Sachs has raised its baseline forecast for gold prices in 2025 from the previous $3,100 to $3,300, but under the increasingly severe market risk pressures of the Trump 2.0 era, Goldman Sachs' analysis team believes that in an extreme bullish scenario, gold prices could exceed $4,200 by the end of 2025, and may even break $4,500 in 2026

Individual Stock News

Can't hold on anymore, Musk is resigning! According to reports, Tesla (TSLA.US) CEO Elon Musk revealed that the Department of Government Efficiency (DOGE) he leads aims to achieve a goal of cutting $1 trillion in government spending by the end of May, at which point he will also resign from the Department of Government Efficiency. Musk's role in the Trump administration has already impacted the Tesla brand and led to a decline in sales in the U.S., Europe, and China, with Tesla's stock price also experiencing a significant drop. Musk's long-time supporter, Wedbush Securities analyst Dan Ives, has also rarely criticized Musk, urging him to step back from the Trump administration and refocus on Tesla. He warned that Musk must take proactive measures to address the deteriorating brand image. As of the time of writing, Tesla's stock rose over 1% in pre-market trading on Tuesday, having earlier increased by more than 4% during the day.

Tesla's sales in France and Sweden have fallen to the lowest quarterly level in four years. Tesla's sales in France and Sweden fell for the third consecutive month in March, marking the worst first-quarter sales performance in these two countries since 2021. Official data shows that Tesla's registered sales in France in March were 3,157 vehicles, and in Sweden, 911 vehicles, representing year-on-year declines of 36.83% and 63.9%, respectively. Its quarterly sales in France dropped to 6,693 vehicles and in Sweden to 1,929 vehicles. Additionally, in the first quarter, Tesla's market share in France fell to 1.63%, losing out to brands not counted by the French Automobile Industry Association (PFA), including BYD and other Chinese electric vehicle manufacturers.

Intel (INTC.US) new CEO makes first public appearance: will divest non-core divisions, primary task is to replenish talent. Intel's new CEO Pat Gelsinger made his first public appearance as CEO at the Intel VISION conference held in Las Vegas on Monday. He stated that the company will divest assets unrelated to its mission and develop new products, including custom semiconductors, to better align with customers. However, he did not specify which of Intel's businesses he believes are no longer core to its future. He also mentioned that one of his primary tasks is to replenish some of the talent that the chipmaker has lost in recent years, as the company needs to recruit talented engineers and retain existing talent.

GlobalFoundries (GFS.US) and UMC (UMC.US) rumored to be merging, but geopolitical barriers and financial pressures may complicate the deal. According to insiders, GlobalFoundries is exploring a merger with Taiwanese chip manufacturer UMC, aiming to create a more resilient legacy semiconductor manufacturer. However, the likelihood of this deal being realized is low. Currently, GlobalFoundries has a market capitalization of about $20 billion, while UMC's market capitalization is around $17 billion. Both companies operate in highly cyclical businesses that require substantial capital expenditures. GlobalFoundries does not have enough cash on hand to fund a direct acquisition, so the deal may require it to borrow heavily or dilute its stock. In addition to the complexities of how to merge the two companies and who will control the business, geopolitical factors will also make the merger challenging. As of the time of writing, UMC's stock fell over 3% in pre-market trading on Tuesday, while GlobalFoundries saw a slight decline XPeng announces monthly delivery figures. In March, XPeng (XPEV.US) delivered a total of 33,205 new vehicles, a year-on-year increase of 268%, marking the fifth consecutive month of deliveries exceeding 30,000 units, setting a new record. Nio (NIO.US) delivered 15,039 new vehicles, a year-on-year increase of 26.7%. Li Auto (LI.US) delivered 36,674 new vehicles, a year-on-year increase of 26.5%.

Some popular Chinese concept stocks rise in pre-market trading. On Tuesday, in pre-market trading of U.S. stocks, Zai Lab (ZLAB.US) rose nearly 6%, XPeng rose nearly 3%, NetEase (NTES.US) and ASE Technology (ASX.US) rose over 2%, while Atour (ATAT.US), Legend Biotech (LEGN.US), and Nio (NIO.US) rose nearly 2%.

Important economic data and event forecasts

At 21:00 Beijing time, 2027 FOMC voting member and Richmond Fed President Barkin will speak on monetary policy and economic outlook.

At 21:45 Beijing time, the final value of the U.S. March SPGI Manufacturing PMI.

At 22:00 Beijing time, the U.S. March ISM Manufacturing PMI.

At 22:00 Beijing time, the U.S. February JOLTs job openings