U.S. Stock Market Preview | Three Major Index Futures Mixed, Chip Stocks Surge Pre-Market, April PPI to be Announced Tonight

Pre-Market Market Trends

1. As of May 13 (Wednesday), U.S. stock index futures showed mixed results before the market opened. The Dow futures were down 0.23%, the S&P 500 futures were up 0.24%, and the Nasdaq futures were up 0.71%.

1. As of the time of writing, the German DAX index was up 0.80%, the UK FTSE 100 index was up 0.04%, the French CAC 40 index was down 0.40%, and the Euro Stoxx 50 index was up 0.35%.

1. As of the time of writing, WTI crude oil was down 0.43%, priced at $101.74 per barrel. Brent crude oil was up 0.06%, priced at $107.84 per barrel.

Market News

The 10-year U.S. Treasury yield approaches the "psychological death line" of 4.5%! Senior strategist boldly predicts it will break 5% within the year. Barrow, head of G10 strategy at Standard Chartered Bank in London, predicts that due to persistent inflation, the 10-year U.S. Treasury yield will reach 5% this year. Aside from a few hours of frenzied trading in October 2023, this benchmark U.S. bond yield has never exceeded that level since 2007. Barrow stated, "This view is not driven by war, but has been reinforced by it. The Federal Reserve may maintain overly loose policies, structural inflation pressures are rising, and I do not believe the government will take any action on the budget." The surge in energy prices triggered by the Middle East conflict has severely impacted U.S. Treasuries and other bond markets. This not only poses risks to other areas of the economy but also raises market measures of inflation risk. If yields break 5%, it will exacerbate concerns about debt sustainability, pressure global corporate borrowing costs, and potentially trigger a rotation of funds from the stock market to the bond market.

Chip stocks hit hard! But momentum correction does not shake the "AI bull market narrative." Chip stocks, which are the dominant force in the U.S. bull market and at the core of the global AI computing investment frenzy, experienced one of the most challenging trading days of the year on Tuesday. The reasons for the severe impact on chip stocks were the inflation data exceeding expectations, the increasing divergence between the U.S. and Iran on the issue of restarting negotiations, and the momentum trading indicators reaching historically extreme levels that have often signaled short-term severe sell-offs. The technical overheating from the previous rapid rise in chip stocks led short-term funds to take profits, which is a common "momentum correction signal" in technical analysis, rather than a signal of fundamental deterioration. According to leaders of stock market bulls such as Wedbush, Morgan Stanley, JP Morgan, and Yardeni Research, the global stock market frenzy driven by AI computing investment is far from over The recent pullback in the U.S. and global stock markets is more likely to be a short-term technical fluctuation and a risk repricing process, rather than a trend reversal signaling the end of the bull market.

Traders bet that this year's U.S. inflation rate may approach the 5% mark, warning economists of underestimating risks. The U.S. April CPI rose at the fastest pace since May 2023, and traders on the prediction market platform believe the peak of inflation has not yet arrived. Although the overall annual inflation rate rose to 3.8% last month, traders on the Kalshi platform believe that the price increase will almost certainly exceed 4% by 2026, with nearly two-thirds probability predicting it will rise above 4.5%. Traders also estimate that the likelihood of this year's inflation rate crossing 5% is close to 40%, a situation that has not occurred since February 2023. This is significantly higher than Wall Street's forecasts. Economists surveyed by FactSet expect the inflation rate to peak at an average of 3.8% this quarter and fall back to 2.8% by the end of the year. Although some Wall Street economists remain cautious, believing that the current inflation pulse is mainly driven by volatile items like energy prices, and expect a decline in the second half of the year as base effects and geopolitical pressures ease, the aggressive bets in the prediction market have undoubtedly preemptively exhausted this risk.

Goldman Sachs: Energy shocks exacerbate "higher for longer" interest rates, and the strong dollar is not yet over. Goldman Sachs stated that as energy price shocks push yields upward, combined with the relative resilience of the U.S. economy, the dollar's appreciation momentum will further strengthen in the short term. The bank's strategist Karen Reichgott Fishman pointed out: "The combination of rising inflation and relatively resilient economic growth already means that U.S. Treasury yields will remain high for a longer period. If market concerns about the duration of energy shocks intensify, this scenario will continue to drive relative returns consistent with changes in trade conditions. This situation should also drive the dollar to strengthen against the currencies of the Group of Ten (G10)." Fishman noted that the optimal hedging strategy currently is to go long on the dollar and short on the Swedish Krona, Euro, and British Pound.

The Federal Reserve's "leadership change" enters the final stage, with the Senate confirming Kevin Warsh as a governor. The U.S. Senate passed a key vote on Tuesday to approve Kevin Warsh's entry into the Federal Reserve Board, which also means he is just one step away from officially becoming the Federal Reserve Chairman. Next, Warsh will undergo a final confirmation vote in the Senate regarding his appointment as Federal Reserve Chairman, with the relevant vote expected to take place on Wednesday. If confirmed, he will succeed Jerome Powell as the Federal Reserve Chairman. Powell's eight-year term as chairman will officially end this Friday. However, Powell's term as a Federal Reserve governor will continue until 2028. He has previously stated that he plans to remain on the board until the investigation into the Federal Reserve headquarters renovation project is completed.

Individual Stock News

U.S. chip stocks rise before the market opens. As of the time of writing on Wednesday, U.S. chip stocks saw a pre-market rally, with Micron Technology (MU.US) up over 5%, Qualcomm (QCOM.US) up 4%, Intel (INTC.US) up nearly 3%, and NVIDIA (NVDA.US) and AMD (AMD.US) both up nearly 2% Nebius (NBIS.US) Q1 performance exceeds expectations, pre-market stock price surges. The financial report shows that cloud computing service provider Nebius achieved a year-on-year revenue growth of 684% to $399 million in the first quarter, compared to market expectations of $371.4 million. Adjusted EBITDA was $129.5 million, while the market expected $87.2 million. The adjusted net loss was $100.3 million, with market expectations of a loss of $176 million. As of the time of publication, Nebius's stock price rose over 13% in pre-market trading on Wednesday.

Highlights of June WWDC revealed in advance: Apple (AAPL.US) iOS 27 plans to launch a "fully customizable" camera application, and Siri's interaction with the system will undergo a complete overhaul. Apple plans to upgrade its "Camera" application to achieve full customization. This is part of a broader user interface adjustment plan in its next-generation iPhone software update. According to insiders, through this new scheme, users will be able to choose which features appear in the "Camera" application and their placement. This includes control options for flash, exposure, timer, and resolution. The updated camera application will also introduce a Siri mode, allowing users to utilize Apple's visual intelligence features, making tasks like identifying plants or translating text into other languages easier. Insiders indicate that these changes are expected to attract professional users in addition to providing a more personalized experience.

The era of "AI integrating everything" has arrived! From AI chat windows to full-scene intelligent systems, Google (GOOGL.US) aims to embed Gemini into the Android ecosystem. Google plans to leverage the latest Android system for a major update, striving to transform the cutting-edge AI application tool Gemini from a simple AI chatbot into a core operational layer covering smartphones, browser operating systems, automotive intelligent driving systems, laptops, and wearable devices within the Android terminal ecosystem. Notably, this move by Google comes just weeks before Apple is expected to showcase its Gemini-based Apple Intelligence major update and AI Siri super AI voice assistant at the WWDC (Worldwide Developers Conference) in June.

Walmart (WMT.US) reportedly plans to lay off or relocate about 1,000 corporate employees to accelerate AI and technology integration. American retail giant Walmart is undergoing a new round of adjustments to its corporate team. According to insiders, the company plans to lay off or relocate about 1,000 corporate employees to further integrate its global technology and artificial intelligence (AI) product teams. Under the leadership of new CEO John Furner and the restructured leadership team, the world's largest retailer is accelerating its AI-driven digital transformation to better compete with major rivals such as Amazon (AMZN.US), Costco (COST.US), and Aldi. Reports indicate that Walmart's global AI acceleration head Daniel Danker and global technology head Suresh Kumar decided to streamline some teams to enhance operational efficiency after reviewing the company's internal structure Alibaba (BABA.US) releases annual performance report, revenue reaches RMB 1,023.67 billion, a year-on-year increase of 3%. Alibaba released its performance report for the quarter ending March 2026, with the group achieving revenue of RMB 243.38 billion, a year-on-year increase of 3%. Excluding the revenue from the disposed businesses of Sun Art Retail and Intime, the year-on-year revenue growth on a comparable basis would be 11%. The net profit attributable to ordinary shareholders was RMB 25.476 billion. The net profit was RMB 23.502 billion, a year-on-year increase of 96%. For the financial year ending March 31, 2026, the group achieved revenue of RMB 1,023.67 billion, a year-on-year increase of 3%. Excluding the revenue from the disposed businesses of Sun Art Retail and Intime, the year-on-year revenue growth on a comparable basis would be 11%. The net profit attributable to ordinary shareholders was RMB 105.904 billion. The net profit was RMB 102.127 billion, a year-on-year decrease of 19%. As of the time of publication, Alibaba's stock fell nearly 3% in pre-market trading on Wednesday.

WeRide (WRD.US) releases Q1 financial report: quarterly revenue grows by 58%, Robotaxi users double. In the first quarter, the company's total revenue reached RMB 114 million, a year-on-year increase of 58%. Thanks to improved operational efficiency and optimized resource allocation, the company's operating loss further narrowed, with gross profit increasing by 56% year-on-year to RMB 39.6 million, and a gross margin of 35% continuing to lead the industry. The commercialization scale of Robotaxi continues to expand. In the first quarter, the number of registered Robotaxi users in China was approximately double that of the same period last year, with an average of over 17 orders per vehicle per day, peaking at 28 orders. Currently, WeRide's global Robotaxi fleet consists of approximately 1,300 vehicles, with plans to deploy 200,000 Robotaxi and other autonomous vehicles over the next five years.

Important Economic Data and Event Forecasts

Beijing time 20:30 US April PPI year-on-year

Beijing time 23:00 US May IPSOS Primary Consumer Sentiment Index PCSI

Beijing time 23:30 2028 FOMC voting member, Boston Fed President Collins speaks at the Boston Economic Club

Beijing time the next day 01:15 2026 FOMC voting member, Minneapolis Fed President Kashkari participates in a discussion hosted by the local chamber of commerce

Earnings Forecast

Pre-market on Thursday: Honda (HMC.US), Viking Holdings (VIK.US), Canadian Solar (CSIQ.US)