U.S. Stock Market Outlook | Three Major Index Futures Rise, Intel Plummets After Earnings

Pre-Market Market Trends

1. As of July 25 (Friday), U.S. stock index futures are all up before the market opens. As of the time of writing, Dow futures are up 0.13%, S&P 500 futures are up 0.13%, and Nasdaq futures are up 0.05%.

1. As of the time of writing, the German DAX index is down 0.78%, the UK FTSE 100 index is down 0.38%, the French CAC 40 index is down 0.03%, and the Euro Stoxx 50 index is down 0.40%.

1. As of the time of writing, WTI crude oil is up 0.35%, priced at $66.26 per barrel. Brent crude oil is up 0.35%, priced at $69.42 per barrel.

Market News

U.S. Q2 Earnings Season Starts Strong! Corporate Profit Engine Continues to Drive Gains. So far, the strong performance of the U.S. second-quarter earnings season indicates that the corporate profit engine is running well, which may help alleviate concerns about the potential overheating of the record rise in U.S. stocks. Data shows that as of Thursday's close, about one-third of the companies in the S&P 500 index have reported earnings, with approximately 83% of companies exceeding analyst expectations, likely achieving the highest "surprise" ratio since the second quarter of 2021. The S&P 500 index has risen 28% since hitting a low on April 8 and has repeatedly set new highs in recent weeks. The equal-weighted S&P 500 index has also reached a record high. This round of gains in U.S. stocks comes as concerns about the impact of tariffs on the economy have eased, with investors gradually returning to the stock market, moving away from the previously extreme risk-averse sentiment. Mark Hackett, Chief Market Strategist at Nationwide, stated that for this round of gains in U.S. stocks to continue, corporate profits need to keep surprising investors, and this earnings season is showing such potential.

Goldman Sachs Survey: Institutions Bullish on U.S. Tech Giants, Bearish on Dollar Sentiment Hits Decade High! A recent QuickPoll conducted by Goldman Sachs among institutional clients shows that investor confidence in the U.S. stock market—especially in the "seven giants" of large tech stocks—is rapidly increasing, while bearish sentiment on the dollar is approaching historical peaks. This monthly quick survey, completed from July 1 to 2, received 800 valid responses, indicating that risk appetite has returned to the levels seen in January 2025 when "American exceptionalism" dominated the market; however, funds are now more dispersed, with continuous reductions in dollar assets and inflows into developed markets like Europe. Why are investors optimistic about U.S. stocks? Osterlund listed three major drivers: First, the Federal Reserve's dovish shift and faster-than-expected interest rate declines have directly elevated stock market valuations; second, the AI concept continues to gain traction, with the U.S. holding the global tech leadership, particularly the "Seven Giants," which are especially favored—66% of respondents already hold or plan to further increase their holdings; third, geopolitical risk premiums have receded. Although trade and geopolitics remain focal points, the market has regarded a 10%-15% effective tariff as the new normal, significantly easing concerns over global supply chain disruptions. Garrett added that in early April, the market was worried about the U.S. "withdrawing from global trade," but this concern has largely dissipated.

Concerns Behind the S&P New High: Economist Who Accurately Predicted the 2008 Crisis Reveals the "Calm Before the Storm" in the U.S. Economy. Top economist Raghuram Rajan, who foresaw the 2008 financial crisis, warned that while the U.S. economy appears calm in the short term, multiple shocks will eventually manifest, "You must observe closely to see the impending impacts." Rajan was among the first to issue risk warnings before the 2008 financial crisis. He pointed out that a series of economic data and stock market performances are reassuring; the S&P 500 index recently hit a historic high, the economy is still expanding, and there is no significant inflation rise. However, he believes this actually provides the Trump administration with more room to implement aggressive policies, including raising tariffs, expanding deficit tax cuts and fiscal spending plans, pressuring the Federal Reserve to lower interest rates, and even contemplating large-scale deportations of illegal immigrants. Rajan is particularly concerned about the lagging impact of tariffs on the economy. He noted that the reason tariffs have not significantly affected economic data is that, on one hand, the government has repeatedly extended negotiation deadlines, delaying the time for impacts to manifest; on the other hand, companies have responded by stockpiling in advance, adjusting supply chains, or absorbing costs themselves, waiting for the final implementation of trade policies. Besides trade issues, Rajan also mentioned that the Trump administration's intervention in monetary policy will bring long-term concerns.

The Surge in U.S. Stocks Hides Signals of a Collapse: The "Liquidity Rhapsody" Under the Coordination of the Federal Reserve and Treasury is About to End. A significant research report released by the well-known market research firm GlobalData.TSLombard indicates that the massive excess liquidity released through the coordinated actions of the Federal Reserve and the U.S. Treasury has been the core force driving the "bull market uptrend" in the U.S. stock market and even global stock markets, its influence surpassing traditional valuation metrics and creating a market excessively distorted by policy. The research firm has begun to question how long this liquidity support from the Federal Reserve and Treasury can maintain the high valuation bubble in the market. The analysis points out that quantitative easing (QE) has effectively turned the Federal Reserve into the "banker" for the Treasury, leading to a surge in commercial bank deposits far exceeding loan growth. This excess of deposits, which have not been lent out or used to expand actual GDP, is flowing into and pushing up financial markets. This vast surplus of funds that have not been lent into the broader economy to expand GDP is undoubtedly one of the strongest driving engines continuously pushing up the stock market. Steven Blitz, Chief Economist at GlobalData.TSLombard, wrote in the research report: "The real 'wall of worry' that the stock market should overcome is how long the liquidity provided by the Federal Reserve/Treasury can sustain the extreme high valuations of U.S. stocks." In the very short term, we expect that the overall broad inflow of liquidity will be far lower than in the first half of the year."

Individual Stock News

Recovery still far away! Intel (INTC.US) plummets after earnings. The earnings report shows that Intel's Q2 revenue was $12.86 billion, better than market expectations, and basically flat year-on-year, mainly affected by customers stocking up in advance due to tariff uncertainties; gross margin continued to decline to 27.5%, below the guidance expectation (34.3%). The company's total number of employees continued to shrink to 101,400 this quarter, with a goal to control the total number of employees to around 75,000 by the end of the year, which means an additional 25,000 layoffs. Due to factors such as severance pay, the company's profits will continue to be under pressure in the second half of the year. The company's CEO, Pat Gelsinger, vowed to implement "new financial discipline" within the chip manufacturer, but he failed to clearly articulate how to make the company more competitive in the unprecedented AI boom and catch up with competitors like TSMC in advanced chip manufacturing processes. Additionally, the management provided a better-than-expected revenue forecast for Q3, but the outlook for profits was rather bleak. The company stated that the profit margin for the quarter would be below Wall Street's expectations, possibly barely achieving break-even in Q3, while Wall Street analysts had previously expected Q3 earnings per share to reach 4-5 cents. As of the time of writing, Intel's stock fell nearly 8% in pre-market trading on Friday.

Gold prices soar over 40%! Newmont Corporation (NEM.US) Q2 earnings far exceed expectations. The world's largest gold mining company, Newmont Corporation, made progress in cost control and achieved better-than-expected earnings performance amid rising precious metal prices. The earnings report shows that Newmont's Q2 revenue was $5.32 billion, a year-on-year increase of 20.9%, exceeding market expectations by $400 million; the second quarter non-GAAP earnings per share were $1.43, exceeding market expectations by $0.27. Net profit soared from $838 million in the same period last year to $2.06 billion. The company stated that the average gold price for the quarter reached $3,320 per ounce, a staggering 41% increase from $2,347 in the same period of 2024. In the second quarter, its all-in sustaining cost (industry benchmark cost indicator) for gold production decreased by about 4% to $1,593 per ounce, better than analysts' expectations. This cost reduction marks a significant turnaround for the company. Previously, Newmont, like its industry peers, had been plagued by rising costs, with its unit costs reaching a nine-year high last quarter, limiting its ability to fully benefit from soaring gold prices. As of the time of writing, Newmont's stock rose 2% in pre-market trading on Friday.

AI computing power demand skyrockets! Google Cloud wins $1.2 billion deal with ServiceNow (NOW.US). American cloud computing and search engine giant Google has signed a large cooperation agreement worth over $1 billion with ServiceNow, a software company focused on optimizing digital workflows, to provide cloud computing services that include cloud AI training/inference computing power resources. This is a significant victory for Google Cloud, which aims to attract large enterprises to its cloud computing platform, and will also drive continued revenue growth for its cloud computing business, which has expanded significantly in recent years amid the AI boom According to media reports, a source familiar with the agreement, who wished to remain anonymous, revealed that ServiceNow has committed to spending approximately $1.2 billion over five years. For many years, many large enterprise clients have been using cloud computing industry leaders Amazon Web Services (AWS) or Microsoft's Azure cloud platform, but the strong rise of Google Cloud Services has disrupted this trend. Google's powerful Gemini artificial intelligence application development-deployment-cloud AI computing resource ecosystem, combined with AI large model Google digital advertising marketing service ecosystem, has attracted a large number of enterprise clients to switch to Google Cloud Services.

Goldman Sachs (GS.US) investment banking business exceeds expectations, cancels second round of large-scale layoffs of 46,000 employees this year. Goldman Sachs has decided not to proceed with a second round of large-scale performance layoffs for 46,000 employees this year, due to better-than-expected recovery in its investment banking business. Sources say that as the strength of the trading department continues to grow, the bank's investment banking fees and client engagement have both shown an upward trend. However, the report also pointed out that if the subsequent economic environment changes, Goldman Sachs' layoff decisions may still be adjusted. The financial report released on Wednesday showed that Goldman Sachs' second-quarter stock trading revenue reached $4.3 billion, about $600 million higher than analysts' expectations, and increased by $100 million compared to the first quarter. This impressive performance also drove the company's overall profit to $3.7 billion (equivalent to $10.91 per share), a 22% increase from $3.04 billion (or $8.62 per share) in the same period last year, exceeding market expectations.

Spending $20 billion on stock buybacks, Charles Schwab (SCHW.US) showcases growth confidence with real money. Wall Street asset management giant Charles Schwab Corporation announced a new round of stock buyback plan totaling up to $20 billion. The company stated that this plan replaces the remaining stock buyback authorization of approximately $6.9 billion. The new plan authorizes the repurchase of $20 billion of common stock, but the company did not provide a specific buyback timetable. Charles Schwab co-chairman Walt Bettinger stated in a statement that this decision reflects the company's "sustained business and financial fundamentals growth momentum, as well as our continued confidence in the company's long-term growth prospects."

Important Economic Data and Event Forecast

Beijing time 20:30 U.S. June durable goods orders month-on-month preliminary value