U.S. Stock Market Outlook | Futures for the three major indices rise together, Federal Reserve's Daly: There seems to be no need for a significant rate cut next month

1. As of August 14th (Thursday) before the US stock market opened, the three major US stock index futures rose together. At the time of writing, Dow futures were up 0.06%, S&P 500 futures were up 0.04%, and Nasdaq futures were up 0.05%.

1. As of the time of writing, the German DAX index was up 0.68%, the UK FTSE 100 index was up 0.07%, the French CAC40 index was up 0.62%, and the Euro Stoxx 50 index was up 0.64%.

1. As of the time of writing, WTI crude oil was up 0.49%, priced at $62.96 per barrel. Brent crude oil was up 0.47%, priced at $65.94 per barrel.

Market News

Federal Reserve's Daly: There seems to be no need for a significant rate cut next month. According to reports, Federal Reserve's Daly opposed the necessity of a 50 basis point rate cut at the Fed's September meeting. In an interview on Wednesday, Daly stated, "To me, a 50 basis point cut sounds like we are seeing an emergency situation—I worry it would send an emergency signal, and I do not think the labor market has such strong momentum; I see no reason to 'catch up'." Daly supported the Fed's decision to keep rates unchanged last month. She later indicated that considering inflation pressures are not as strong as anticipated and the job market has softened, she would support a rate cut in September. Daly mentioned that after the significant downward revision of the previous months' job creation data in the July non-farm payroll report, she no longer describes the labor market as "robust."

Trump threatens drug tariffs "up to 250%," sources say it may not be implemented in the short term. Despite President Trump's recent threats to impose tariffs on imported drugs soon, these tariffs may take weeks to implement. Some sources in Europe and the US have revealed that the tariffs will not be imposed immediately. Sources told the media that the results of the national security department's investigation into semiconductors will be announced before the drug tariffs are declared. Additionally, Trump is busy preparing for a meeting with Russian President Putin on Friday. On August 5th, Trump stated in an interview that to focus on key economic areas to reshape global trade, the US would announce tariffs on semiconductor chips and drugs "around next week," with proposed drug tariff rates potentially reaching as high as 250%.

US stocks violently rebound by 30%! Wall Street shorts revise reports overnight, "stubborn bulls" make a comeback. While most Wall Street forecasters turned pessimistic during the panic sell-off in April, Morgan Stanley's Michael Wilson and former Wells Fargo strategist Christopher Harvey maintained a bullish stance against the trend Now, the market proves they were right. Since the sell-off in April, the U.S. stock market has largely ignored the economic risks brought by President Donald Trump's trade war, instead climbing to historic highs. This surge is attributed to bets on advancements in artificial intelligence technology and lower-than-expected tariff rates. The latest round of gains was driven by an inflation report that reinforced expectations that the Federal Reserve will resume interest rate cuts next month. The S&P 500 index has risen 30% from its low in April, forcing sell-side strategists who abandoned bullish views in April to change their stance again.

Bitcoin soars past $123,500, hitting a historic high! The resonance with U.S. stocks highlights a warming risk appetite. On Wednesday, Bitcoin prices reached a historic high, in line with the rise of U.S. stocks. Global investors are further stepping into the realm of risk appetite. On Wednesday evening Eastern Time, Bitcoin prices broke through $123,500, surpassing the previous historic peak of $123,200 set on July 14. Just recently, the S&P 500 index closed at a historic high for the second consecutive trading day, continuing the summer rally, with the benchmark index repeatedly setting records. For most of the past year, Bitcoin prices have steadily risen, thanks to the friendly legislative environment formed in the U.S. under President Donald Trump. Public companies represented by Michael Saylor's Strategy (MSTR.US) have driven up demand by adopting an increasingly popular corporate strategy of hoarding this native cryptocurrency.

Goldman Sachs' latest forecast: The Federal Reserve will cut rates three times by 25 basis points each this year, and two more times next year. Goldman Sachs stated in a research report on Wednesday that it expects the Federal Reserve to cut rates three times this year, each by 25 basis points, and to make two more cuts in 2026. This would bring rates from the current level of 4.25% to 4.50% down to a range of 3% to 3.25%. This report from Goldman Sachs follows Tuesday's inflation report. The data showed that the U.S. CPI rose slightly in July, increasing by 0.2% last month, compared to a 0.3% rise in June, which aligns with economists' expectations. The moderate decline in the consumer price index was reflected in a 2.2% drop in gasoline prices. Food prices remained unchanged after rising 0.3% for two consecutive months. According to calculations from LSEG, the U.S. interest rate futures market later on Wednesday indicated a 93.8% probability of a 25 basis point rate cut in September, with a 6% chance of a 50 basis point cut.

Individual Stock News

Xunlei (XNET.US) Q2 revenue increased by 30.6% year-on-year, Non-GAAP net profit rose to $8.3 million. Xunlei's second-quarter financial results showed revenue of $104 million, a year-on-year increase of 30.6%; net profit was $72.74 million, compared to $2.5 million in the same period last year; Non-GAAP net profit was $8.3 million, compared to $3.2 million in the same period last year, with earnings per ADS of $0.13, compared to $0.05 in the same period last year. By business segment, cloud computing revenue was $30 million, up 13.6% year-on-year; subscription business revenue was $36.4 million, up 10.5% year-on-year; live streaming and other internet value-added services revenue was $37.6 million, up 85.5% year-on-year Looking ahead to the third quarter of 2025, Xunlei expects revenue to be between $116 million and $124 million, with the midpoint of this forecast range indicating a quarter-on-quarter revenue growth of approximately 15.4%.

Vipshop (VIPS.US) Q2 revenue decreased by 4.09% year-on-year, while GMV increased by 1.7%. Vipshop's Q2 revenue was 25.8 billion yuan (RMB, the same below), a year-on-year decrease of 4.09%; the Non-GAAP net profit attributable to shareholders was 2.1 billion yuan, compared to 2.2 billion yuan in the same period last year; adjusted earnings per ADS were 4.06 yuan, compared to 3.91 yuan in the same period last year. Gross profit was 6.1 billion yuan, down from 6.3 billion yuan in the same period last year. In the second quarter, GMV (Gross Merchandise Volume) was 51.4 billion yuan, a year-on-year increase of 1.7%. The number of active users was 43.5 million, down from 44.3 million in the same period last year. The total number of orders was 193 million, compared to 197.8 million in the same period last year. Looking ahead, Vipshop expects net revenue for the third quarter of 2025 to be between 20.7 billion and 21.7 billion yuan, a year-on-year growth of approximately 0% to 5%.

The "AI Original" strategy has achieved significant results, with NetEase Youdao (DAO.US) achieving profitability for four consecutive quarters and operating profit reaching a historical high in the first half of the year. Youdao's Q2 net revenue reached 1.42 billion yuan, a year-on-year increase of 7.2%; operating profit was 28.8 million yuan, marking the first time achieving profitability in the second quarter. In the first half of this year, NetEase Youdao's operating profit reached 130 million yuan, a historical high; total net revenue was 2.7 billion yuan, with operating cash outflow significantly narrowing by 49.9% year-on-year. In the second quarter, NetEase Youdao continued to build long-term competitiveness in its core business through AI. Learning services, as an important testing ground for Youdao's AI technology, achieved net revenue of 660 million yuan in the second quarter, a year-on-year increase of 2.2%. Among them, net revenue from digital content services was 450 million yuan. Youdao's leading revenue grew by approximately 30% year-on-year. Features such as AI essay correction and AI college entrance examination volunteer filling further drove user retention rates to over 75%, breaking historical peaks.

Sangde Institution (STG.US) Q2 2025 revenue increased by 9.5% year-on-year, with net profit reaching 127 million yuan. Sangde Institution continued its high-quality development trend, achieving revenue of 1.027 billion yuan and net profit of 202 million yuan in the first half of the year. The second quarter performance was particularly impressive, with revenue reaching 539 million yuan, a year-on-year increase of 9.5%; net profit was 127 million yuan, a year-on-year increase of 54%, achieving double growth in revenue and profit. This achievement not only demonstrates the company's mature profit model and operational resilience in the adult education sector but also validates the effectiveness of its diversified transformation strategy. Sangde Institution's Q2 2025 financial report provides a representative observation sample for the industry. During the reporting period, the company achieved revenue of 539 million yuan, a year-on-year increase of 9.5%; net profit was 127 million yuan, a year-on-year increase of 54%, with the net profit margin rising from 16.7% in the same period last year to 23.5%.

AI demand continues to surge! Cisco (CSCO.US) Q4 revenue and profit both exceeded expectations, with AI business generating $1 billion in the fiscal year. Cisco's fourth-quarter revenue grew by 7.6%, reaching $14.7 billion. Excluding certain items, earnings per share were 99 cents Market expectations for sales are $14.6 billion, with earnings per share of $0.98. The adjusted gross margin is 68.4%, slightly higher than the market expectation of 68.2%. Among them, the online business accounts for the majority share, at $7.34 billion, in line with expectations of $7.34 billion. Service revenue is $3.79 billion. In this quarter, online product orders achieved double-digit growth, mainly benefiting from products in areas such as network-scale infrastructure, switching equipment, enterprise routing systems, industrial Internet of Things, and servers.

Norwegian buyers "immune" to Musk's political controversies, helping Tesla (TSLA.US) achieve a 24% year-on-year sales growth in Norway in the first half of the year. Tesla's sales performance in Europe has been dismal this year, due to dissatisfaction among consumers stemming from CEO Musk's political stance, leading to acts of vandalism against Tesla electric vehicles and dealerships in some areas, and prompting some formerly loyal customers to distance themselves from the brand. However, Norway is an exception, as the sales of Tesla electric vehicles in this Nordic country have seen significant growth—at least for now. Data shows that in the first half of this year, Tesla's sales in Germany, Sweden, Denmark, and the Netherlands plummeted by half or more year-on-year, while sales in Norway increased by 24% year-on-year, making this country of only 5.5 million people Tesla's second-largest market in Europe.

Apple (AAPL.US) AI revival blueprint: Desktop robots lead the 2027 strategy, smart home cameras open up new growth poles. Apple is revitalizing its position in the artificial intelligence field with a series of ambitious new products, including desktop robots, a more human-like version of Siri, smart speakers with displays, and home security cameras. According to insiders, a desktop robot set to launch in 2027 is a core component of the AI strategy. Meanwhile, smart speakers with displays are planned for release next year, as part of efforts to enter the entry-level smart home product market. Additionally, home security systems are seen as another huge growth opportunity. The new cameras will become a core component of Apple's security system, which can automate home functions.

Important Economic Data and Event Forecasts

Beijing time 20:30: U.S. initial jobless claims for the week ending August 9 (in ten thousand), U.S. July PPI year-on-year (%).

The next day at 02:00 Beijing time: 2027 FOMC voting member, Richmond Fed President Barkin participates in a webinar