US Stock Outlook | Three Major Index Futures Rise, Tesla to Release Earnings After Hours

1. On April 22 (Wednesday), U.S. stock index futures rose across the board before the market opened, with Dow futures up 0.60%, S&P 500 futures up 0.60%, and Nasdaq 100 futures up 0.77%.

1. As of the time of writing, the German DAX index fell 0.21%, the UK FTSE 100 index fell 0.09%, the French CAC 40 index fell 0.38%, and the Euro Stoxx 50 index fell 0.10%.

1. As of the time of writing, WTI crude oil rose 1.82%, priced at $91.30 per barrel. Brent crude oil rose 1.77%, priced at $100.22 per barrel.

Market News

Iran's Islamic Revolutionary Guard Corps: Two violating vessels detained. On the 22nd local time, the naval command of Iran's Islamic Revolutionary Guard Corps announced that it had detained two violating vessels and transferred them to Iranian coastal waters. The statement pointed out that the two vessels, named "MSC Francesca" and "Epaminodes," endangered maritime navigation safety by tampering with navigation systems without obtaining the necessary permits. They have now been seized by the Revolutionary Guard Navy and transferred to the Iranian coast. The statement emphasized that disrupting the order and security of the Strait of Hormuz is Iran's "red line." According to earlier reports from Iran, three vessels were intercepted by the Islamic Revolutionary Guard Corps in the Persian Gulf and surrounding waters on the 22nd.

Walsh's gamble: Using AI productivity to hedge against inflation, the Fed's path towards framework reconstruction. An increasing number of senior macroeconomists on Wall Street believe that Federal Reserve Chairman nominee Kevin Walsh faces an almost impossible task—both to curb inflation and to please the U.S. President Donald Trump who nominated him. Kevin Walsh, the next Federal Reserve Chairman candidate nominated by Trump, believes that an important sign of the Fed's success in monetary policy is that no one is talking about inflation anymore. What Kevin Walsh really wants to do may not be a traditional "dovish/hawkish stance shift," but rather a reconstruction of the Fed's operational framework: compressing the balance sheet, weakening the normalization of QE and quasi-fiscal functions, while also, when conditions permit, using interest rate tools more to support the U.S. real economy and the significant improvement in productivity driven by the AI wave.

The storm of high oil prices is far from over! The "aftereffects" of the Hormuz blockade are hard to dissipate, and energy stocks enter an "overweight window." Major global oil traders have recently warned that even if any peace or ceasefire agreement is reached to restore the shipping of oil and gas resources through the Strait of Hormuz, the impacts of this round of geopolitical conflict in the Middle East will continue for several months thereafter The overall oil production in the Middle East has significantly decreased due to the Iran war, and the logic behind this reduction in production and the surge in oil prices is no longer just "disruption of transportation in the Strait of Hormuz," but rather a combination of "production cuts + export disruptions + infrastructure damage from missile strikes." These factors are also why senior strategists on Wall Street have recently emphasized that, in an environment where the global economy is already bearing high financing costs and geopolitical shocks, energy stocks are transitioning from cyclical trades to a strategic overweight in portfolios.

Vanguard Group increases holdings in U.S. Treasuries against the trend: a yield of over 4.25% is a "golden pit," betting on the Federal Reserve's rate cuts this year. Vanguard Group stated that it is increasing its holdings in U.S. Treasuries, taking advantage of the opportunity to lock in rates as yields rise following the Middle East conflict, hedging against potential economic slowdown risks. Vanguard reiterated its view that the Federal Reserve will cut rates once this year, but the interest rate swap market has not fully reflected this expectation. As the yield on the 10-year U.S. Treasury has risen above the "fair value" range of 3.75% to 4.25%, the team has been increasing its holdings in long-term bonds. This benchmark rate (which affects many factors from corporate borrowing costs to mortgage terms) has risen more than 30 basis points since late February, reaching around 4.3%, due to the Iran conflict pushing up oil prices and reigniting concerns about inflation.

Individual Stock News

Tesla (TSLA.US) is about to report earnings, and the market cares not about the earnings themselves, but about AI, Robotaxi, robots, and SpaceX. Tesla will hold a rare "earnings feast" on Wednesday afternoon Eastern Time (Thursday morning Beijing Time): it may present a significantly better-than-expected financial report after several years. However, the core issue that Wall Street is focused on is that as investors seek more substantial evidence to prove that Musk's ambitions in artificial intelligence, autonomous driving, Robotaxi, and humanoid robots are sufficient to support the stock's extremely high valuation, the actual financial numbers are likely to be tacitly ignored by investors. Wall Street predicts that adjusted profits for the first quarter will increase significantly by 30% compared to the same period last year, with total revenue expected to grow by 15%, marking a strong reversal compared to Tesla's fourth-quarter performance—when adjusted profits fell over 30% and revenue declined by about 3%.

Boeing (BA.US) performance recovery engine roaring! Backlog orders hit a new high, "Artemis II" moon landing supports recovery narrative. Boeing's latest financial report shows that its cash outflow is significantly lower than Wall Street expectations, and the company delivered the largest number of aircraft in the first quarter since 2019. Its defense, space, and commercial aerospace business segments related to NASA's moon landing mission are showing more stable growth, and Boeing continues to achieve fundamental recovery through significantly increased production. Boeing's commercial aircraft deliveries during this period increased significantly by 10%, exceeding analysts' expectations with 143 aircraft delivered, driving a 14% year-over-year increase in total revenue for the first quarter, reaching approximately $22.2 billion. Altoberg emphasized the progress made in actual production and deliveries, including the launch of NASA's "Artemis II" moon landing mission by the space launch system rocket manufactured by Boeing this month Under the boost of increased trading volume, Interactive Brokers (IBKR.US) reported a 17% year-on-year increase in Q1 net revenue, with earnings per share of $0.60. Interactive Brokers' Q1 net revenue was $1.67 billion, a 17% year-on-year increase, slightly below the market expectation of $1.68 billion; net profit was $267 million, compared to $213 million in the same period last year; adjusted earnings per share were $0.60, in line with market expectations. Net interest income increased by 17% year-on-year to $904 million, mainly due to the increase in average customer margin loans and customer credit balances. Driven by the increase in trading volume, commission income grew by 19% to $613 million. Customer trading volume for stocks, futures, and options increased by 25%, 20%, and 16%, respectively. Other fees and services grew by 10% to $86 million.

The AI wave drives a surge in electricity demand, GE Vernova (GEV.US) raises full-year performance guidance. Driven by strong demand for power equipment from data centers, GE Vernova raised its annual revenue and adjusted core profit margin forecasts on Wednesday. The financial report showed that GE Vernova's Q1 revenue reached $9.34 billion, a year-on-year increase of 16.3%, exceeding expectations; earnings per share were $17.44, higher than the expected $15.44. Adjusted core profit was $896 million, while analysts' expectations were $777.2 million. According to the U.S. Energy Information Administration (EIA), U.S. electricity consumption is expected to hit a record high for the second consecutive year in 2025, with further growth anticipated in 2026 and 2027. The company currently expects 2026 revenue to be between $44.5 billion and $45.5 billion, up from the previous expectation of $44 billion to $45 billion.

The "victim" of the Iran war in U.S. stocks emerges: United Airlines (UAL.US) significantly lowers full-year profit expectations. Despite United Airlines' strong performance in the first quarter, the company stated that due to the surge in oil prices caused by the Iran war, profit margins are under pressure, leading to a significant reduction in its full-year profit expectations for 2026. United Airlines indicated that due to high oil prices, it has lowered its full-year earnings per share forecast to between $7 and $11, far below the $12 to $14 forecast released in January. United Airlines' financial report showed that fuel costs increased by $340 million year-on-year due to the surge in international oil prices caused by the Iran war. This factor is expected to continue to impact the company's profit margins. Following the outbreak of the Iran war, Wall Street analysts have adjusted their performance expectations for United Airlines, forecasting an adjusted earnings per share of $9.58 for the full year.

AT&T (T.US) exceeds revenue and profit expectations in Q1, with effective integration strategy and fiber expansion. Benefiting from the growth in wireless phone and home internet service users, AT&T's revenue and profit both exceeded Wall Street expectations, demonstrating that its ongoing fiber network construction and multi-product integration strategy are gradually delivering performance returns. AT&T achieved revenue of $31.5 billion in the first quarter, a year-on-year increase of 2.9%, slightly above the market expectation of $31.25 billion The adjusted earnings per share were $0.57, an increase from $0.51 in the same period last year, and better than analysts' estimate of $0.55. In terms of user growth, AT&T added 294,000 postpaid mobile users in the quarter, exceeding analysts' expectations of 262,000. The postpaid phone user churn rate was 0.89%.

New Oriental (EDU.US) reported a 45.3% year-over-year increase in net profit attributable to shareholders for the third quarter, reaching $126.8 million. New Oriental's net revenue for the third quarter rose 19.8% year-over-year to $1.4173 billion. Operating profit increased 44.8% year-over-year to $180.3 million. The net profit attributable to shareholders of New Oriental rose 45.3% year-over-year to $126.8 million. The net profit attributable to shareholders of New Oriental was $413 million, a year-over-year increase of 13.3%. New Oriental expects its net revenue for the fourth quarter of fiscal year 2026 to be between $1.4296 billion and $1.4669 billion, representing a year-over-year growth rate of between 15% and 18%. Driven by robust growth across various business lines, New Oriental has raised its full-year net revenue forecast for fiscal year 2026 to between $5.5614 billion and $5.5987 billion, with a year-over-year growth rate of between 13% and 14%.

Meta (META.US) will track mouse movements and keystrokes on employees' computers for AI model training. Meta is installing new tracking software on the computers of its employees in the U.S. to capture mouse movements, clicks, and keyboard inputs for training its artificial intelligence models. An internal memo indicated that this is part of Meta's broader plan to create AI agents capable of autonomously performing work tasks. According to one memo, the tool is called the "Model Capability Program" and will run on work-related applications and websites, periodically capturing content on employees' screens. This memo was published by an AI research scientist in the channel of Meta's internal model-building team, "Meta Superintelligence Lab," on Tuesday. This initiative aims to improve Meta's AI models' shortcomings in simulating human-computer interactions, such as dropdown menu selections and keyboard shortcut operations.

Important Economic Data and Event Forecast

Beijing time 22:30: U.S. EIA crude oil inventory change for the week ending April 17.

Earnings Forecast

Thursday morning: Tesla (TSLA.US), Lam Research (LRCX.US), IBM (IBM.US), Texas Instruments (TXN.US), ServiceNow (NOW.US)

Thursday pre-market: STMicroelectronics (STM.US), Nokia (NOK.US), American Airlines (AAL.US), Southwest Airlines (LUV.US), TAL Education Group (TAL.US), American Express (AXP.US), Union Pacific (UNP.US), Blackstone (BX.US)