U.S. Stock Market Outlook | Three Major Index Futures Rise Ahead of U.S.-Russia Summit

Pre-Market Market Trends

1. As of August 7th (Thursday), U.S. stock index futures are all up before the market opens. As of the time of writing, Dow futures are up 0.54%, S&P 500 futures are up 0.61%, and Nasdaq futures are up 0.74%.

1. As of the time of writing, the German DAX index is up 1.73%, the UK FTSE 100 index is down 0.71%, the French CAC40 index is up 1.26%, and the Euro Stoxx 50 index is up 1.57%.

1. As of the time of writing, WTI crude oil is up 0.56%, priced at $64.71 per barrel. Brent crude oil is up 0.55%, priced at $67.26 per barrel.

Market News

The Russia-U.S. summit is imminent, and diplomatic optimism boosts global markets. The Kremlin announced on Thursday that Russian President Vladimir Putin and U.S. President Donald Trump will hold a summit meeting in the coming days. Kremlin foreign policy advisor Yuri Ushakov told reporters that the two sides have agreed on the meeting location and are "working with U.S. colleagues to advance discussions on specific topics," aiming for talks next week. He also revealed that the venue for the summit will be announced later. Following the announcement, European stock markets and U.S. stock index futures rose sharply.

Three Federal Reserve officials issue warnings: The labor market remains weak, and expectations for a rate cut in September are rising. San Francisco Fed President Mary Daly pointed out that the current labor market shows signs of weakness, and further deterioration will necessitate policy adjustments. Fed Governor Lael Brainard stated that the employment data for the past three months has been revised down by nearly 260,000 jobs (with only 73,000 jobs added in July), a significant revision that is often a typical characteristic of economic cycle turning points. Minneapolis Fed President Neel Kashkari bluntly stated, "The economy is slowing down, and it is appropriate to initiate adjustments to the federal funds rate in the short term."

"Is the peak season over?" HSBC expects U.S. stock earnings growth to hit the brakes in the second half of the year. HSBC stated that U.S. stocks have just experienced a round of explosive earnings reports, with the S&P 500 index's earnings per share growth expected to reach 10% in the second quarter. However, HSBC anticipates that earnings growth for U.S. stocks will slow slightly in the second half of the year, reflecting the impact of tariff pressures and economic weakness. HSBC's baseline forecast assumes that earnings per share will grow by 8% year-on-year in the second half of 2025, compared to a 12% growth in the first half of 2025 Valuation advantages + profit recovery imminent! Bank of America: US stock insurance stocks are expected to rebound from the bottom. Analyst Joshua Shanker added that the difference in returns has created an opportunity to re-buy insurance stocks. He stated, "You can see a huge performance gap. Large insurance stocks have fallen 10%, 15%, or even 20% in the past four months, while some large banks have risen 30%. You have to ask yourself whether this is entirely driven by fundamentals or a sector rotation phenomenon—one sector is in vogue while another is being ignored."

The US dollar and US Treasuries face a "trust collapse" double whammy, UBS warns that the dollar's 8% decline this year is not over. UBS Group strategists warned that a weak US labor market and personnel changes at the Federal Reserve and the Bureau of Labor Statistics could trigger a simultaneous decline in the dollar and US Treasuries. The strategists pointed out that the market has not fully digested the impact of a series of events last Friday—from the non-farm payroll report showing a slowdown in hiring to the sudden resignation of Fed Governor Quarles. The strategists stated, "These developments mark the first time since spring that traditional macro factors and risk premium elements that are bearish for the dollar have appeared simultaneously." They noted that the Bloomberg Dollar Spot Index has fallen 8% this year and may decline further due to risks, while currencies like the euro and yen are expected to rise.

Trump's tariffs fully implemented: US average tariff rate jumps to 15.2%, a new high since World War II. The tariff policy fully implemented by the Trump administration officially took effect at 00:01 New York time on Thursday, marking a substantial phase in its efforts to reshape the global trade landscape. This months-long, tumultuous tariff battle has finally landed, with nearly all of the US's trade partners facing tariff increases. According to estimates from Bloomberg Economics, the new policy will raise the average US tariff rate from 2.3% last year to 15.2%, the highest level since World War II. Global companies are urgently adjusting their supply chains to cope with this "Trump-style" trade earthquake.

Individual Stock News

Some chip stocks rise in pre-market trading. As of the time of publication on Thursday, TSMC (TSM.US) rose over 5%, Micron Technology (MU.US) rose nearly 4%, AMD (AMD.US) rose over 2%, and NVIDIA (NVDA.US), Broadcom (AVGO.US), and Qualcomm (QCOM.US) all rose over 1%. In news, US President Trump announced on Wednesday that he would impose approximately 100% tariffs on "all chips and semiconductors entering the US," but would exempt companies producing in the US. It is reported that companies such as Intel, TSMC, Samsung, Texas Instruments, Micron Technology, and GlobalFoundries all have plans to build factories in the US.

Eli Lilly (LLY.US) Q2 earnings exceed expectations, raises full-year guidance, but oral weight loss drug trial results fall short of expectations. The financial report showed that thanks to strong sales performance of its weight loss drugs, Eli Lilly's second-quarter revenue grew 38% year-on-year to $15.56 billion, with adjusted earnings per share of $6.31, both exceeding market expectations. The company currently expects full-year revenue for 2025 to be $60-62 billion, up from a previous expectation of $58-61 billion; it expects adjusted earnings per share to be $21.75-23.0, up from a previous expectation of $20.78-22.28 In addition, experiments show that Eli Lilly's first small molecule oral GLP-1 drug Orforglipron achieved all goals in a 72-week trial, with an average weight loss of 11.2%, but below expectations. As of the time of publication, Eli Lilly (LLY.US) fell over 9% in pre-market trading on Thursday.

The "AI + Digital Advertising" giant Applovin (APP.US) exceeded expectations with a net profit surge of 164%. The company's second-quarter revenue grew 17% year-on-year to $1.26 billion, better than the market expectation of $1.22 billion. GAAP net profit soared 164% year-on-year to $820 million. Adjusted earnings per share were $2.39, surpassing the market expectation of $2.32. The company expects third-quarter revenue to be between $1.32 billion and $1.34 billion, with the midpoint higher than the market expectation of $1.31 billion. As of the time of publication, Applovin fell nearly 3% in pre-market trading on Thursday.

DoorDash (DASH.US) turned a profit in the second quarter, exceeding expectations, and raised its third-quarter order guidance to $24.2 billion - $24.7 billion. The company's second-quarter revenue increased to $3.28 billion year-on-year, exceeding market expectations; net profit was $285 million, compared to a net loss of $157 million in the same period last year; earnings per share were $0.65, better than the market expectation of $0.44. Looking ahead to the third quarter, DoorDash expects total orders to be between $24.2 billion and $24.7 billion, with the midpoint higher than the market expectation of $23.8 billion; it expects adjusted EBITDA to be between $680 million and $780 million, with the midpoint higher than the market expectation of $718.9 million. As of the time of publication, DoorDash rose nearly 8% in pre-market trading on Thursday.

Fortinet (FTNT.US) reported strong Q2 results, but conservative Q3 guidance led to a stock price plunge. The company’s second-quarter revenue grew 14% year-on-year to $1.63 billion, in line with market expectations; adjusted earnings per share reached $0.64, better than the market expectation of $0.59. Looking ahead to the third quarter, the company expects revenue to be between $1.67 billion and $1.73 billion, with adjusted earnings per share of $0.62-$0.64. Although the midpoint of earnings per share expectations is higher than the analyst forecast of $0.62, the revenue midpoint is slightly lower than the market expectation of $1.71 billion. As of the time of publication, Fortinet fell over 21% in pre-market trading on Thursday.

Airbnb (ABNB.US) struggles in North America! Q3 guidance exceeds expectations. The company reported a 7.4% increase in booked nights and total seats, reaching 134.4 million. Revenue was $3.1 billion, higher than the expected $3.03 billion. Net profit was $642 million, while analysts expected $599.3 million. The company released a better-than-expected outlook for third-quarter performance—expecting revenue to be between $4.02 billion and $4.1 billion, citing strong summer travel demand, but warned that growth may be difficult to maintain later this year due to a high base from the same period last year. As of the time of publication, Airbnb fell nearly 6% in pre-market trading on Thursday Occidental Petroleum (OXY.US) Q2 performance exceeds expectations, simultaneously advancing $950 million asset divestiture. The company achieved revenue of $6.46 billion in the second quarter, surpassing analysts' expectations of $6.24 billion, with adjusted earnings per share of $0.39, significantly higher than the analysts' average forecast of $0.29. Q2 global average daily production reached 1.4 million barrels of oil equivalent, an increase of approximately 11% compared to the same period last year. Despite the decline in crude oil prices, production growth effectively offset this adverse impact. The company has completed $950 million in new asset divestiture deals since the beginning of the second quarter, with $370 million of the transactions already completed. The company stated that it has repaid $3 billion in debt so far this year.

Toyota Motor (TM.US) lowers fiscal year profit forecast due to U.S. tariff reductions, expects a loss of 1.4 trillion yen. Toyota has revised its full-year performance guidance, warning that the U.S. tariffs on imported cars will lead to a decrease in its operating profit by 1.4 trillion yen (approximately $9.5 billion). Toyota currently expects its operating profit for the fiscal year ending March 2026 to be 3.2 trillion yen, down from the initial forecast of 3.8 trillion yen, and also below analysts' expectations. However, the company's operating profit for the April-June quarter reached 1.17 trillion yen, exceeding analysts' forecast of 890 billion yen.

Game + Music dual-engine drive! Sony (SONY.US) raises profit forecast. Sony's operating profit for the first fiscal quarter increased significantly by 36.5% year-on-year, reaching 340 billion yen, surpassing market expectations of 288 billion yen. The gaming business saw its quarterly operating profit double to 148 billion yen. Sony's management stated that driven by sales of online services and favorable exchange rates, the profit outlook for the gaming business is expected to be even stronger. The company raised its overall operating profit forecast for the fiscal year ending in March next year by 4% to 1.33 trillion yen (approximately $9 billion), roughly in line with market expectations. As of the time of publication, Sony's stock rose over 4% in pre-market trading on Thursday.

Important Economic Data and Event Forecasts

Beijing time 20:30 Initial jobless claims in the U.S. for the week ending August 2

Beijing time 22:00 Final value of U.S. wholesale inventories for June month-on-month

Beijing time 22:00 2027 FOMC voting member and Atlanta Fed President Bostic to participate online in a fireside chat on monetary policy with the Florida Chief Financial Officers Association

Earnings Forecast

Pre-market on Friday: Yuchai International (CYD.US)