US stock outlook | Futures on the three major stock indexes are rising sharply, Trump is planning to “change hands” ahead of schedule to force the Federal Reserve to cut interest rates

Pre-market market trends

1. On June 26 (Thursday), the futures of the three major US stock indexes rose sharply before the US stock market. As of press release, Dow futures were up 0.28%, S&P 500 futures were up 0.38%, and NASDAQ futures were up 0.47%.

2. As of press release, the German DAX index rose 0.38%, the UK FTSE 100 index rose 0.38%, the French CAC40 index rose 0.17%, and the European Stoxx 50 index fell 0.04%.

3. As of press release, WTI crude oil rose 0.35% to $65.15 per barrel. Brent crude rose 0.47% to $66.74 per barrel.

Market news

Trump is planning an early “change of command” to force the Federal Reserve to cut interest rates. According to some reports, Trump is considering announcing the nominees for the next Federal Reserve chairman in advance because he believes that current Chairman Powell is acting too slowly on the interest rate cut issue. Trump revealed that he has been looking for three to four candidates to replace Powell. Powell's term as chairman will last until May 2026. This week, Trump repeatedly criticized the Federal Reserve's decision to keep interest rates unchanged, arguing that interest rate cuts should be implemented, and blamed the central bank for causing the US government to keep borrowing costs high. Although Powell himself insists that he will remain in office until the end of his term in May 2026, and the Federal Reserve has yet to disclose any policy adjustments, Trump clearly wants to “make up his mind” as soon as possible to exert influence on the market and policy makers. According to reports, potential candidates Trump is considering include former Federal Reserve Governor Kevin Walsh, Treasury Secretary Bezent, and Federal Reserve Governor Waller.

As US stocks approach new highs, technical analysts warned that the breadth of the market has not improved, and there may be a correction in the next few months. As technology stocks push major US stock indexes close to record highs, technical analysts warn that unless more sectors join this upward trend, there may be a correction in the next few months. The S&P 500 index has rebounded strongly since falling due to tariffs in April, and is currently less than 1% from its all-time high. However, up to now, a key market breadth indicator — the proportion of S&P 500 constituent stocks above its 200-day moving average — has hardly changed since May, and the equal-weighted S&P 500 index, which represents broader market participation, is still more than 4% away from the all-time high set in November last year. Chart observers from institutions such as Janney Montgomery Scott pointed out that if other major market sectors such as finance, transportation, and small-cap stocks fail to provide stronger support, the rebound in US stocks may lose momentum over the next few months. Until then, unless there is a major trade or geopolitical emergency, pure momentum can still drive the S&P 500 to continue to rise.

Over $100 billion is poised to go! US stocks may welcome massive buying. Charlie McEligott (Charlie McEligott), a cross-asset strategist at Nomura Securities, said in a report that its model for tracking expected capital inflows from Volatility-Control Funds (Volatility-Control Funds) shows that these investors may inject more than $100 billion into the stock market within the next month. According to McEligot, this is the highest predicted value since the model was launched in 2004. He pointed out that model predictions are mainly driven by the imminent decline in volatility that has been achieved in three months. When the stock market plummeted in late March to early April, volatility surged, but as sharp fluctuations subside, risk managers of systemic funds may soon allow them to re-increase their exposure. The market seems to have calmed down over the past six weeks, which has also strengthened the perception of a “safe return to the market.” When the model indicates that systemic traders may buy heavily, the stock market often records strong returns over the next 1-2 months, with significant excess returns. But McEligot warned that the carnival would be difficult to sustain: this kind of capital is less stable, and its influx could spur a new round of sell-off. If volatility rises again, it could trigger a sharp sell-off similar to August — the closing of Japanese yen arbitrage trades at the time triggered a decline in global stock markets. Options traders may also increase selling pressure to hedge their exposure.

Is a 70s nightmare back in action? Xiaomi warns: The tariff policy may cause the US to fall into stagflation in 2025. Analysts at J.P. Morgan Chase said that the current US trade policy may slow down the pace of global economic growth and reignite inflationary pressure in the US. The bank predicts that the probability of the US economy falling into recession in the second half of this year is as high as 40%. In a mid-year outlook study, J.P. Morgan Chase lowered the US economic growth forecast for 2025 to 1.3% from the 2% forecast at the beginning of the year, pointing out that higher tariffs would have an additional negative impact on the economy. The report said, “The stagflation effect brought about by the tariff increase is a key driver in lowering our GDP growth expectations this year. We still think the risk of a recession remains high.” According to information, stagflation, a difficult situation where stagnation in economic growth and continued inflation coexisted, plagued the US economy for a long time in the 70s of the last century. The US bank is pessimistic about the dollar's outlook, given that growth support policies implemented by other economies will boost emerging markets and other currencies. As the size of the US debt market continues to expand, the bank expects the share of demand for US Treasury bonds from foreign investors, the Federal Reserve, and commercial banks to gradually decline. The report points out that the risk compensation required by investors to hold US bonds (that is, maturity premiums) may rise by 40-50 basis points over time, but it is not expected to repeat the sharp rise in treasury bond yields in the first half of this year.

Is the US economy facing a worse fate than a recession? Top economists issue four bold predictions! Torsten Sløk (Torsten Sløk), chief economist at Apollo Global Management, believes that the US is at a critical inflection point in stagnation. Slock said that the main cause of this problem is Trump's tariff policy. “Tariff increases usually trigger stagflationary shocks — both increasing the probability of economic slowing down and driving up prices.” He pointed out that Wall Street's consensus forecast for economic growth will continue to decline this year, while inflation expectations have risen slightly. “This is the definition of stagflation.” Here are Slock's four-point predictions for the US economy in the current environment: 1. The GDP growth rate fell to 1.2%; 2. Inflation may reach 3% by the end of the year; 3. The unemployment rate may break 5% in 2026; 4. The recession will come as soon as this summer.

Individual stock news

AI computing power is driving a blowout in storage demand, and Micron (MU.US)'s Q4 revenue and profit guidelines are both crushing expectations. The memory chip maker reported that revenue for the third fiscal quarter reached a record high of $9.3 billion, up 37% year over year, higher than analysts' average expectations of $8.9 billion; adjusted earnings per share were $1.91, higher than analysts' expectations of $1.60. The company said the quarter's revenue was mainly due to “all-time high” sales of its dynamic random access memory (DRAM) chips. Among them, the revenue of high-bandwidth memory (HBM) chips increased by nearly 50% month-on-month, and Micron is in a market-leading position in this field. Furthermore, the company expects revenue for the fourth fiscal quarter to reach about US$10.7 billion, far exceeding the analysts' average estimate of US$9.89 billion; it expects adjusted earnings per share for the fourth quarter to be around US$2.50, which is higher than market expectations of US$2.03. As of press release, Micron Technology's US stock rose nearly 2% before the market on Thursday.

Hwang In-hoon predicts that after AI, robots will become Nvidia (NVDA.US)'s strongest growth engine. Nvidia CEO Hwang In-hoon said that in addition to artificial intelligence, robotics, especially humanoid robots, will be the biggest potential growth market for this artificial intelligence chip giant, and fully autonomous vehicles based on AI training/inference systems will be the first major commercial application of this technology. In May of this year, Nvidia's performance data showed that the division where its robotics business is located had quarterly sales of about US$567 million. Although it only accounts for 1% of the giant's total sales, Hwang In-hoon expects the pace of growth to be extremely strong. “We didn't think of ourselves as simply a chip company a long time ago.” Hwang In-hoon said at Nvidia's annual shareholders' meeting on Wednesday. “We have many significant growth opportunities across the company. AI and robotics are two of the biggest, with a total market size of trillions of dollars.” Huang Renxun said in response to shareholders' questions at Nvidia's annual shareholders' meeting.

Frequent intervention by security personnel is difficult to conceal hidden dangers, and Tesla (TSLA.US) Robotaxi's debut revealed technical flaws in commercialization. On June 25, Tesla first opened an autonomous taxi test ride service to the public in Austin, Texas. This high-profile technical demonstration shocked the industry due to many driving anomalies. According to 11 live videos verified by the media, the test vehicle showed a number of operating problems in the open road environment, including misleading lanes, dangerous parking, abnormal lane changes, etc., casting a shadow over Tesla's autonomous driving strategy. Faced with questions, the Tesla safety team emphasized that the test vehicles were all equipped with a double insurance mechanism. Apart from the autonomous driving system, the front seats were always equipped with professional safety monitors. In one video, when a reversing cargo truck appeared in front of the test car, the safety officer promptly pressed the emergency stop button to avoid collision. However, Philip Koopman, an autonomous driving expert at Carnegie Mellon University, pointed out: “The first day of testing showed such a high frequency of abnormal operations, which showed a fundamental flaw in the system's decision-making logic.”

Meta (META.US) is rumored to have stolen three OpenAI experts to step up the “super intelligence” project. Meta CEO Mark Zuckerberg has reportedly hired three OpenAI researchers to join its “super-smart” team. And just a few days ago, OpenAI CEO Sam Ultrman accused the Facebook boss of trying to rob his employees. An OpenAI spokesperson confirmed the news of the three employees' departure, but gave no further details. According to reports, Meta has hired Lucas Beyer, Alexander Kolesnikov, and Xiaohua Zhai, all of whom have worked at OpenAI's Zurich office. Additionally, Meta recently hired Alexandr Wang, 28, CEO of Scale AI, to participate in its “superintelligence” project. The company also spent $14.3 billion to acquire 49% of Scale AI's shares. Meta is currently trying to reverse the situation. According to reports, Zuckerberg is forming a team of experts to achieve so-called “general artificial intelligence” (AGI).

Shell (SHEL.US) stated that it “has no intention of acquiring” British Petroleum (BP.US), and according to regulations, it is prohibited to make further acquisitions within half a year. Shell said it had no intention of launching a takeover offer against British Petroleum, refuting previous reports that the two major European companies were actively discussing mergers. The announcement dispelled speculation about the eventual merger of Britain's two major oil giants. Previously, BP's poor performance continued for several years, while radical shareholder Elliott Investment Management continued to put pressure on it. Shell's statement meant it was subject to UK takeover regulations, which prevented it from making a takeover offer to BP for six months. As of press release, Shell's US stock rose more than 2% in the premarket on Thursday.

Key economic data and event forecasts

Final value of the US real GDP annualized quarterly rate for the first quarter at 20:30 Beijing time

Preliminary monthly rate of US durable goods orders in May at 20:30 Beijing time

Number of jobless claims in the US at 20:30 Beijing time at the beginning of the week ending June 21

21:00 Beijing time 2026 FOMC voting committee and Cleveland Federal Reserve Chairman Hamak delivered opening remarks at an event

At 22:00 Beijing time, the monthly rate of the US existing home contract sales index after the seasonal adjustment in May

The next day at 01:15 Beijing time, Federal Reserve Governor Barr delivered a speech on community development

Performance Forecast

Friday morning: Nike (NKE.US)