U.S. Stock Market Preview | Three Major Index Futures Decline Together, Chip Stocks Drop Pre-Market as "Horrible Data" and Powell's Speech Approach

Pre-Market Market Trends

1. As of April 16 (Wednesday), U.S. stock index futures are all down before the market opens. As of the time of writing, Dow futures are down 0.19%, S&P 500 futures are down 0.77%, and Nasdaq futures are down 1.40%. Chip stocks are generally lower.

1. As of the time of writing, the German DAX index is down 0.41%, the UK FTSE 100 index is down 0.29%, the French CAC40 index is down 0.51%, and the Euro Stoxx 50 index is down 0.69%.

1. As of the time of writing, WTI crude oil is up 0.80%, priced at $61.82 per barrel. Brent crude oil is up 0.80%, priced at $65.19 per barrel.

Market News

The White House's dissatisfaction with the Federal Reserve is growing! What will Powell say tonight on the hot seat? After experiencing a series of fluctuations in tariff policies and repeated expectations of interest rate cuts, all eyes in the market are on Powell this week. At 01:30 AM Beijing time on Thursday, Federal Reserve Chairman Powell will speak at the Chicago Economic Club about the outlook for the U.S. economy. The market is expected to closely monitor his speech for clues regarding potential interest rate cuts and the progress of regulatory reforms encouraging banks to increase their holdings of U.S. Treasuries. So far, the Federal Reserve has maintained a "wait-and-see" stance, and Powell's statements on interest rate cuts remain cautious. Meanwhile, according to informed sources citing the latest media reports, the Federal Reserve is resisting pressure from the White House and Washington and has not accelerated the push for regulatory reforms encouraging banks to increase their holdings of U.S. Treasuries. With the turmoil in trade patterns and financial markets, Powell's fate is facing increasing uncertainty. U.S. Treasury Secretary Yellen stated on Monday that she has "been considering the next Federal Reserve chair candidate and plans to start interviewing potential candidates in the fall." Noted financial analyst Jim Bianco posted on social media that Powell may face two fates: either being directly dismissed by Trump or being effectively sidelined.

"Terrifying data" is about to be released! U.S. retail sales data for March will be released at 20:30 Beijing time on Wednesday. The market expects March retail sales to grow by 1.4% month-on-month, higher than last month's growth of 0.2; core retail sales, excluding the volatile automotive and gas sectors, are expected to grow by 0.4% month-on-month. The market is currently concerned that Trump's tariff policies have increased the risk of a recession in the U.S. Therefore, any economic data may stimulate the nerves of U.S. stock investors. However, the Nowcast model indicates that the expected rebound in U.S. retail sales for March may mask signs of economic cooling More metal tariffs coming? Trump orders investigation into key mineral imports. U.S. President Trump has directed an investigation to determine whether imports of key minerals threaten national security, which could lead to tariffs or restrictions on the industry. Key minerals include lithium, cobalt, nickel, and rare earth elements, which are used in energy, electronics, electric vehicles, and the defense industry. The executive order states that U.S. manufacturing and defense industrial bases still rely on foreign-sourced processed key mineral products and adds that these products face serious global supply chain vulnerabilities and market distortions. The executive order further states that this dependence on imports "increases potential risks to national security, defense preparedness, price stability, economic prosperity, and resilience." The White House indicated that if Trump subsequently imposes tariffs on key minerals from a specific country, that rate will replace the reciprocal tariffs imposed earlier this month. U.S. Secretary of Commerce Howard Lutnick has been instructed to submit a final report to Trump within 180 days of the investigation's commencement.

Bank of America’s 15-year survey issues strongest warning: Trade war ignites global economic recession as top "black swan." According to Bank of America's latest global fund manager survey, the threat of a trade war triggered by Trump administration policies and its potential to lead to a global economic recession has become the most severe tail risk facing the current market. The survey results highlight global investors' ongoing concerns about geopolitical tensions and their cascading effects on financial markets. The survey shows that as many as 80% of the fund managers surveyed listed "trade war leading to global recession" as the primary tail risk currently facing the market. This consensus ratio marks a historical peak in the 15 years since Bank of America began conducting this survey. In addition to concerns about the trade war, fund managers are also focused on other risk factors, but the level of concern is relatively lower. Among them, "inflationary pressures forcing the Federal Reserve to aggressively raise interest rates" ranked as the second risk with a 10% vote share. 7% of respondents viewed "foreign capital withdrawal triggering a dollar collapse" as a major threat. Only 1% of respondents pointed out that "artificial intelligence bubble" is the biggest market risk. This heightened focus on trade war and recession risks indicates that geopolitical instability is increasingly dominating investor sentiment. Especially in the context of a fragile post-pandemic global economic recovery and ongoing adjustments in major central bank policies, market sensitivity is particularly pronounced.

Weak dollar and escalating trade war boost gold surge, soaring above $3,300! As the dollar weakens, trade tensions escalate, and concerns about global economic growth rise, demand for safe-haven assets has pushed gold prices to break historical records once again on Wednesday. As of the time of writing, gold futures hovered around $3,320 per ounce, while spot gold was reported at $3,305 per ounce. Tim Waterer, Chief Market Analyst at KCM Trade, stated: "The depreciation of the dollar and ongoing risk aversion have combined to create a favorable environment for gold." The dollar index fell 0.6% on the day, enhancing gold's appeal to holders of other currencies. As a traditional safe-haven asset during times of geopolitical and economic turmoil, gold has repeatedly set historical highs this year, with an increase of over 25% year-to-date

Individual Stock News

Chip stocks fell broadly before the market opened. As of the time of writing on Wednesday, AMD (AMD.US) fell nearly 7%, NVIDIA (NVDA.US) dropped over 6%, ASML (ASML.US) declined over 4%, Micron Technology (MU.US) and Broadcom (AVGO.US) fell nearly 4%, Taiwan Semiconductor (TSM.US) and Intel (INTC.US) dropped nearly 3%. Other star tech stocks also experienced declines. Tesla (TSLA.US), Google (GOOGL.US), Qualcomm (QCOM.US), and Meta (META.US) fell nearly 2%.

NVIDIA (NVDA.US): Limited "special supply" of H20 chips to China, will record about $5.5 billion impairment. NVIDIA stated on Tuesday that the U.S. government is restricting its H20 chip exports to China, severely undermining this product line originally designed to respond to previous export controls. NVIDIA indicated in regulatory filings on Tuesday that the U.S. government notified the company on Monday that future exports of the H20 chip to China will require an "indefinite" license application. The U.S. government stated that the new regulations aim to address concerns that chips "may be used or re-exported to Chinese supercomputers." NVIDIA warned that the company will incur approximately $5.5 billion in expenses in the first quarter of this fiscal year related to "inventory, procurement commitments, and related reserves" associated with the H20 series chips.

ASML (ASML.US) Q1 order amount fell short of expectations, warns of tariff uncertainty. The financial report showed that ASML's Q1 net sales were €7.742 billion, a 46% increase from €5.290 billion in the same period last year. Gross profit was €4.180 billion, up 55% from €2.697 billion a year earlier; gross margin was 54.0%, compared to 51.0% in the same period last year. Net profit was €2.355 billion, a 92% increase from €1.224 billion a year earlier. Diluted earnings per share were €6.00, compared to €3.11 in the same period last year. The new order amount in Q1 was €3.936 billion, including €1.2 billion in EUV orders. The new order amount in Q1 fell short of the market expectation of €4.82 billion. Meanwhile, the company warned that it does not know how to quantify the impact of recent tariff announcements, which could disrupt the semiconductor industry. ASML CEO Christophe Fouquet stated, "The recently announced tariffs have increased uncertainty in the macro environment." He noted that the company's "dialogue with customers so far" supports its expectation that 2025 and 2026 will be growth years driven by investments in artificial intelligence.

United Airlines (UAL.US) issues "unconventional" dual earnings guidance, maintains profitability for the year despite economic recession. The financial report showed that United Airlines' Q1 revenue was $13.2 billion, a 5.3% year-over-year increase; net profit was $387 million, compared to a net loss of $124 million in the same period last year; adjusted earnings per share were $0.91, exceeding the market expectation of $0.74. In the face of uncertainties brought by Trump's tariffs, United Airlines took an unusual approach by providing two potential profit scenarios, stating that its profit outlook for 2025 remains achievable, but also warned that an economic recession could reduce its profit forecast by nearly half The company stated that if the current environment remains stable, it expects adjusted earnings per share to be between $11.50 and $13.50 in 2025; if the U.S. economy falls into recession, the adjusted earnings per share for the year will drop to $7. As of the time of publication, United Airlines rose over 6% in pre-market trading on Wednesday.

Interactive Brokers (IBKR.US) Q1 revenue increased by 19% year-on-year, with daily average revenue trades surging by 50%. The first-quarter financial report released by Interactive Brokers shows that the company's profits and revenues have significantly increased, driven by growth in both interest income and trading commissions. The report indicates that the adjusted earnings per share reached $1.88. According to GAAP standards, net revenue increased by 19% year-on-year to $1.43 billion, with adjusted net revenue at $1.4 billion. The pre-tax profit margin slightly rose to 74%. The growth in performance is mainly attributed to a surge in customer trading activity. Commission income soared by 36% to $514 million, driven by a 47% increase in stock trading volume, a 25% increase in options, and a 16% increase in futures. Meanwhile, the average balance of customer margin loans and credit accounts increased, driving net interest income up by 3% to $770 million. To enhance stock liquidity, Interactive Brokers announced a 1-for-4 stock split. As of the time of publication, Interactive Brokers fell over 7% in pre-market trading on Wednesday.

Johnson & Johnson (JNJ.US) warns: The tariff storm in 2025 will wipe out $400 million in earnings. As one of the first pharmaceutical giants to quantify the impact of the new tariff policies of the Trump administration, Johnson & Johnson predicts that the company will face a $400 million earnings impact due to tariff policies in 2025. Johnson & Johnson's Chief Financial Officer Joseph Wolk stated during the earnings call that most of the impact mainly comes from potential trade tariffs facing the company's medical device division. Although President Trump announced earlier this month exemptions for several tariffs on pharmaceutical products, the medical device sector is still affected. After announcing better-than-expected performance for the first quarter of 2025, Johnson & Johnson decided to maintain its full-year earnings forecast while slightly raising its sales guidance. Wolk pointed out that although Trump subsequently announced a 90-day tariff suspension policy for multiple countries and reduced the overall tariff rate to 10%, the estimated $400 million tariff impact includes some tariffs on steel and aluminum products announced by the president earlier this year. Regarding Trump's repeated proposals to boost U.S. manufacturing through tariffs, Johnson & Johnson's CEO Joaquin Duato stated that tax reform is the best solution to enhance domestic production of medical devices and pharmaceuticals compared to tariff policies.

Important Economic Data and Event Forecasts

Beijing time 20:30 U.S. March retail sales month-on-month

Beijing time 21:15 U.S. March industrial production month-on-month

Beijing time the next day 00:00 2026 FOMC voting member and Cleveland Fed President Harker participates in a Q&A session

Beijing time the next day 01:30 Federal Reserve Chairman Powell speaks at the Chicago Economic Club

Earnings Forecast

Thursday morning: Alcoa (AA.US)

Thursday pre-market: Taiwan Semiconductor (TSM.US), UnitedHealth (UNH.US), Charles Schwab (SCHW.US)