U.S. Stock Preview | Chinese concept stocks rise before the market opens as Trump urges the Federal Reserve to cut interest rates

Pre-Market Market Trends

1. As of April 17 (Thursday), U.S. stock index futures are mixed before the market opens. As of the time of writing, Dow futures are down 1.44%, S&P 500 futures are up 0.41%, and Nasdaq futures are up 0.71%.

1. As of the time of writing, the German DAX index is down 0.71%, the UK FTSE 100 index is down 0.68%, the French CAC 40 index is down 0.92%, and the Euro Stoxx 50 index is down 0.82%.

1. As of the time of writing, WTI crude oil is up 1.14%, priced at $63.18 per barrel. Brent crude oil is up 0.97%, priced at $66.49 per barrel.

Market News

Federal Reserve's Harker: Maintaining interest rates is the best choice until Trump's policies are clearer. Cleveland Fed President Harker stated that officials have ample reason to keep interest rates at current levels until the impact of tariffs and other policy changes on the economy becomes clearer. Harker believes that there are risks of rising inflation and declining growth and employment in the near and medium term, which will pose difficult trade-offs for policymakers. She pointed out that in this situation, it is crucial for officials to keep consumer expectations of inflation stable. "Given that our dual mandate is under pressure, there is ample reason to maintain monetary policy stability to balance the risks of further rising inflation and a slowing labor market." "When the situation is unclear, waiting for more data will help guide future actions." This statement is largely consistent with Fed Chair Powell's remarks on Wednesday.

Trump urges the Fed to cut interest rates again and wants to dismiss Powell? Trump once again criticized Fed Chair Powell, stating that the Fed should have cut interest rates long ago, and claimed that his dismissal of Powell "is not fast enough." Trump posted on social media: "The European Central Bank is expected to make its seventh rate cut, yet Fed Chair Powell's actions are 'too late'; he always acts too late and makes wrong decisions. His remarks yesterday were a typical, complete 'mess'! Currently, oil prices are down, grocery prices are also down, and the U.S. is profiting greatly from tariffs. The Fed should have lowered interest rates like the European Central Bank a long time ago. It should have been done long ago, and now the Fed definitely should lower interest rates. It would not be too fast for Powell to be dismissed!" It is still unclear whether Trump's remarks refer to Powell's term coming to an end or if he wants to remove Powell from the position of Fed Chair RBC BlueBay bets on the end of "American exceptionalism" and starts shorting the dollar. Global top asset management firm RBC BlueBay Asset Management stated that Trump's trade war could destroy decades of trust and credibility in the dollar. Therefore, the firm has opened a short position on the dollar, betting that "American exceptionalism" will come to an end. Mark Dowding, Chief Investment Officer of RBC BlueBay's fixed income team, said in an interview: "At the beginning of last week, we were still selling the dollar. U.S. policymakers have lost credibility, and Trump's tariff policy feels poorly thought out." Dowding also believes that the Federal Reserve is unlikely to cut interest rates in the near term, as tariffs may disrupt supply chains, causing shortages and driving up inflation. Dowding added, "We will continue to see fluctuations in government bond prices and are waiting for a good entry point. If the yield on the U.S. 10-year Treasury falls below 4.2%, I want to sell; if it exceeds 4.8%, I want to buy."

Gold continues to soar to $3,350! Goldman Sachs warns: "Tail risks" could drive gold prices to $4,500. Due to escalating trade wars raising concerns about a potential global economic recession, gold has risen nearly 28% this year, surpassing the 27% increase expected in 2024. Goldman Sachs emphasized that despite the rise in gold prices, positions are not yet overly high. Their current optimistic forecast for gold prices at the end of the year is $3,700 per ounce, and in a tail risk scenario, gold prices could reach $4,500 per ounce if there are potential changes in Federal Reserve policy. Goldman Sachs believes the current upward trend is sustainable, supported by strong physical demand and inflows from Asian investors. Positioning remains far from optimistic levels, which supports their positive outlook, while macro risks could trigger a super surge in gold prices in the coming months.

Apollo warns: If the U.S. economy falls into recession, the federal budget deficit will worsen even after interest rate cuts. As concerns about a U.S. economic recession grow, Apollo's latest analysis shows that even with falling interest rates, the federal budget deficit could still significantly worsen. Apollo's Chief Economist Torsten Slok pointed out that if the U.S. falls into recession, long-term interest rates may decline, reducing the government's cost of refinancing existing debt. However, he warned that any potential savings would be overshadowed by broader economic consequences. According to Apollo's estimates, for every two percentage points that interest rates fall, the federal government could save about $500 billion in interest payments annually. But the reality is more complex—historical data shows that recessions typically deepen the U.S. budget deficit by about 4% of GDP due to reduced tax revenues and increased social security spending such as unemployment benefits. In 2025 dollar terms, the agency stated this would result in a staggering $1.3 trillion impact on government finances, more than double the savings from lower interest rates. Slok concluded, "The key takeaway is that it is impossible to improve the budget deficit by creating a recession, as the deterioration of government finances during a recession will be twice the amount saved in interest payments." The economist warned that short-term gains from borrowing costs may be offset by long-term fiscal pressures

Individual Stock News

Most popular Chinese concept stocks rose before the market. As of the time of writing, on Thursday before the U.S. stock market opened, Alibaba (BABA.US), NetEase (NTES.US), Kingsoft Cloud (KC.US), WeBull (BULL.US), and Trip.com (TCOM.US) all rose nearly 4%, Tencent Music (TME.US), Huazhu (HTHT.US), and Beike (BEKE.US) rose over 3%, while GDS Holdings (GDS.US) rose nearly 3%. Baidu (BIDU.US), Atour (ATAT.US), and Bilibili (BILI.US) rose over 2%.

Tesla (TSLA.US) loses its "stronghold" in the U.S. electric vehicle market! Its market share in California has dropped below 50%. The California New Car Dealers Association stated on Wednesday that Tesla's electric vehicle sales share in the state fell sharply from 55.5% a year ago to 43.9% in the first quarter of this year. Meanwhile, Tesla's new vehicle registrations in the first quarter dropped significantly by 15%, while registrations for all other brands of electric vehicles grew by 35% at the beginning of this year. California is considered the "super stronghold" of electric vehicles in the U.S., with electric vehicle purchases in the state alone exceeding 30%. The California New Car Dealers Association pointed out in its latest quarterly report that "the aging of electric vehicle product lines, along with some consumers, especially Democrats, strongly opposing the efficiency of the U.S. government under Elon Musk's leadership (DOGE), may be key factors leading to the sharp decline in Tesla's market share of pure electric vehicles."

TSMC (TSM.US) exceeds profit expectations in the first quarter, reaffirms 20% growth target for the year amid tariff shadows. TSMC reported better-than-expected performance for the first quarter of 2025, as customers rushed to stockpile advanced chips in anticipation of global trade turmoil caused by U.S. tariffs. TSMC's Q1 revenue was $25.53 billion, a year-on-year increase of 35.3%, but a quarter-on-quarter decrease of 5.1%; 3nm shipments accounted for 22% of total wafer revenue; 5nm accounted for 36%; and 7nm accounted for 15%. Advanced technologies accounted for 73% of total wafer revenue. Net profit was $11.1 billion, exceeding analysts' average expectations. The company maintained its revenue growth forecast for 2025, expecting growth to still reach around 20% this year, consistent with the target set in January, indicating confidence in weathering the industrial and economic impacts of a potential trade war. The company also reiterated that its capital expenditure is expected to be between $38 billion and $42 billion by 2025. As of the time of writing, TSMC rose over 3% before the U.S. stock market opened on Thursday.

Pre-market plummeted 20%! Rising medical costs lead UnitedHealth (UNH.US) to lower full-year profit guidance. The earnings report showed that UnitedHealth's Q1 revenue grew by 9.8% year-on-year to $109.6 billion, but still fell short of analysts' expectations of $111.5 billion; earnings per share were $7.20, below the expected $7.29. Looking ahead, UnitedHealth lowered its annual profit forecast due to anticipated rising costs. The company currently expects earnings per share this year to be between $26 and $26.5, significantly lower than the previous expectation of $29.50 to $30, and also below the market expectation of $29.74 Since mid-2023, the Medicare industry has been struggling to cope with rising costs due to a surge in demand for medical services supported by the U.S. government for seniors or disabled individuals.

Alcoa (AA.US) Q1 revenue misses expectations, tariff losses in Q2 will increase to $90 million. The financial report shows that the company's Q1 revenue was $3.37 billion, a year-on-year increase of 29.6%, but below market expectations; net profit was $548 million, compared to a net loss of $252 million in the same period last year; non-GAAP earnings per share were $2.15, exceeding expectations by $0.81. Alcoa stated that since the implementation of the 25% tariff on metal imports by President Trump, the company has incurred a loss of $20 million. The company has absorbed the costs of importing aluminum from its largest metal source, Canada. This disclosure is one of the first signs of U.S. companies being adversely affected by the trade war initiated by the Trump administration. The company expects that total production and shipments in the alumina sector will remain unchanged from previous forecasts, at 9.5 to 9.7 million tons and 13.1 to 13.3 million tons, respectively, by 2025. Total aluminum production and shipments will also remain unchanged from previous forecasts, between 2.3 to 2.5 million tons and 2.6 to 2.8 million tons, respectively. In Q2 2025, due to the Section 232 tariffs on aluminum imported from Canada, the aluminum sector is expected to incur a continuous adverse impact of $90 million.

No tariff reduction, no price cuts! Ford Motor Company (F.US) pressures the White House to seek lower tariffs. Ford stated that if Trump fails to fulfill his implied promise of tariff reductions to automakers, the company is prepared to raise the prices of new models starting next month. Andrew Frick, president of Ford's internal combustion and electric vehicle divisions, mentioned in a memo to dealers that if there is no significant change in Trump's tariff policy, "we expect to adjust vehicle prices in the future, possibly starting with vehicles produced in May." Ford noted that vehicles produced in May will not arrive at U.S. showrooms until late June or early July, at which point the company's current employee price promotion for all customers will end. The company also stated that it will not adjust the prices of existing inventory vehicles. Just two days ago, Trump indicated that he is considering granting temporary tariff exemptions to automakers to give them more time to shift production to the U.S.

Important Economic Data and Event Forecasts

Beijing time 20:30 U.S. March building permits month-on-month initial value

Beijing time 20:30 U.S. initial jobless claims for the week ending April 12

Beijing time 20:30 U.S. April Philadelphia Fed Manufacturing Index

Beijing time 20:30 U.S. March new housing starts annualized month-on-month

Earnings Forecast

Friday morning: Netflix (NFLX.US)