U.S. Stock Market Outlook | Futures for the three major indices all decline, Wosh will appear at the ECB forum tonight

Pre-Market Market Trends

1. As of July 1 (Wednesday), U.S. stock index futures are all down before the market opens. As of the time of writing, Dow futures are down 0.39%, S&P 500 futures are down 0.37%, and Nasdaq futures are down 0.66%.

1. As of the time of writing, the German DAX index is down 0.01%, the UK FTSE 100 index is down 0.61%, the French CAC 40 index is down 1.00%, and the Euro Stoxx 50 index is down 0.61%.

1. As of the time of writing, WTI crude oil is down 0.71%, priced at $69.01 per barrel. Brent crude oil is down 1.06%, priced at $72.18 per barrel.

Market News

The 2008 Financial Crisis Team Reunites in Sintra! Fed Rate Hike Expectations Rise Amid "AI Bubble Stress Test." Will Walsh's Overseas Debut Be "Hawkish All the Way"? New Federal Reserve Chairman Kevin Walsh will appear alongside three other veteran central bank policymakers who experienced the 2008 global financial crisis this week, while potential danger factors for a new round of financial turmoil continue to trouble global central bank officials, including the Fed. This will be Walsh's first public appearance outside the U.S. since taking office in May, and he will attend the annual central bank seminar held by the European Central Bank in Portugal on Wednesday, alongside ECB President Christine Lagarde and other key figures from that market crisis. In addition to any hints or forward guidance regarding central bank interest rates, Wednesday's central bank monetary policy panel discussion will be closely scrutinized to observe whether there is any chemical reaction contrast in the atmosphere of the seminar following Walsh's arrival.

Iran Decides to Charge "Tolls" in the Strait of Hormuz, Expected to Implement in Mid-August. According to two senior Iranian sources, Iran is determined to seek international recognition of its control over the Strait of Hormuz and its right to charge tolls for vessels entering and exiting the Persian Gulf, even if it means resorting to force. Under a temporary agreement reached with the U.S. this month to end three months of conflict, Iran agreed to allow vessels to pass through the strait free of charge for 60 days. However, Iran believes the wording of the agreement still gives it the right to decide which vessels can pass and which routes they should take in this narrow waterway. Sources also indicated that Iran is determined to ensure that this control is recognized in a lasting and formal manner after the temporary agreement expires. In the ongoing peace negotiations between the U.S. and Iran, Iranian negotiators will not discuss other contentious areas until this point is recognized If the temporary agreement is terminated without an extension, Iran will start charging for navigation vessels in mid-August, although the Iranian side has not yet announced specific charging standards or implementation methods.

Iran claims it will appropriately initiate negotiations for the final agreement with the U.S. On July 1st local time, it was reported from Iran that Iranian Deputy Foreign Minister Ali Bagheri Kani led a delegation from the Iranian Foreign Ministry, Central Bank, and other departments to visit Qatar. On the morning of that day, he met with Qatari Prime Minister and Foreign Minister Mohammed in Doha to discuss the implementation of the U.S.-Iran memorandum of understanding and other topics, including "removing existing obstacles" regarding the ceasefire in Lebanon. After the meeting between Bagheri Kani and Mohammed, representatives from Iran, Qatar, and Pakistan held a trilateral meeting in Doha to review the implementation of the U.S.-Iran memorandum of understanding. Bagheri Kani stated after the meeting that Iran has established a working group responsible for following up on the implementation of the U.S.-Iran memorandum of understanding and negotiating the final agreement, but formal negotiations have not yet begun. Iran is continuing consultations through mediators to determine the time and place for its working group to conduct negotiations, stating that "if necessary conditions are met, the working group will officially commence negotiations."

The 162 level has been breached, and the 170 curse is approaching? The yen defense battle is at another turning point, as Japan's currency chief hints at U.S. tacit approval for intervention in the foreign exchange market. Japan's top official responsible for currency affairs hinted that foreign exchange intervention is an effective strategy and noted that Tokyo and Washington maintain close communication on exchange rate issues. This statement comes as the yen hovers near its lowest point in nearly forty years. Jun Mimura, Deputy Minister for International Affairs at the Japanese Ministry of Finance, mentioned in an interview on Wednesday regarding the last market intervention by Tokyo two months ago, saying, "Judging from the subsequent market trends, I believe it was clearly meaningful." He also indicated that Japan's intervention at that time did not encounter opposition from the U.S. He stated, "To my knowledge, the U.S. has never made any statements opposing what we did; if there is any difference, it is that there were actually some more supportive remarks." Mimura emphasized the frequency of his communication with U.S. officials, stating, "Through phone calls and emails, the frequency of my contact with my U.S. counterparts is likely far beyond what most people imagine."

The Trump administration lifts restrictions on Anthropic's strongest AI model, Fable 5, but regulatory uncertainties remain to be resolved. The U.S. government has lifted access restrictions on Anthropic's Fable 5 artificial intelligence (AI) model. After the AI startup addressed the security concerns raised by the Trump administration, the model was approved for broader release. On June 30th local time, the U.S. Department of Commerce sent a letter to Anthropic co-founder Tom Brown, formally announcing the lifting of export controls on Fable 5 and Mythos 5. Anthropic confirmed on Tuesday via the X platform that it had received the Department of Commerce's notification and would begin restoring access the next day. Although it has now been revoked, the export control order previously issued by the U.S. Department of Commerce was the most significant intervention by the U.S. government in the operations of an AI company to date and has sparked legal disputes regarding whether export controls can be used to regulate access to AI models Despite the lifting of restrictions on Fable 5 and Mythos 5, concerns about uncertainties surrounding U.S. government AI regulation remain.

The global AI boom drives chip demand, with South Korea's June exports seeing the largest increase in nearly 50 years. Driven by the ongoing global artificial intelligence boom, the demand for high-performance chips has surged, leading to a significant increase in South Korean exports. In June, exports soared by 70.9% year-on-year, reaching a record $102.25 billion, the fastest growth since October 1978. During the same period, imports grew by 30.1% to $66.1 billion, resulting in a trade surplus of $36.15 billion for the month, surpassing the $30 billion mark for the first time and widening from May's $27.04 billion. The Ministry of Trade, Industry and Energy of South Korea pointed out that semiconductors remain the main engine of export growth, with chip exports hitting a monthly record of $44.82 billion in June. The export growth rate for May was revised to 53.4%, while the June data easily exceeded economists' median forecast of 57.3%.

Individual Stock News

Microsoft (MSFT.US) is preparing for another round of layoffs! "AI disrupts everything" sweeps through corporate operations, accelerating the replacement of human labor with computing infrastructure budgets. Media reports citing informed sources indicate that U.S. tech giant Microsoft is preparing to implement a new round of layoffs, which could affect thousands of employees. Reports suggest that the tech giant is looking to cut less than 2.5% of its global workforce; according to a team document submitted to the U.S. Securities and Exchange Commission (SEC) as of June 30, 2025, the company had approximately 228,000 full-time employees at that time. Informed sources indicate that the upcoming layoffs are expected to be announced as early as next week. It is reported that this restructuring layoff will cover multiple business units of Microsoft, particularly impacting the Xbox gaming division, as well as sales and consulting-related positions.

Paramount Global (PSKY.US) submits antitrust remedies to the EU, moving forward with the $110 billion merger. A regulatory filing on Wednesday revealed that Paramount Global has submitted remedies to address the EU's competition concerns regarding its $110 billion acquisition of Warner Bros. Discovery (WBD.US). Last week, informed sources told the media that this move is likely to facilitate the approval of the deal by the European Commission. Paramount stated that it "is confident that the remedies will directly and comprehensively address any concerns expressed in the European Commission's preliminary assessment and support timely approval." The European Commission, as the EU's competition enforcement agency, did not provide details of the remedies, in line with its consistent policy. A person directly familiar with the matter told the media last week that Paramount would propose to abandon its film distribution joint venture with Universal Pictures to alleviate the antitrust concerns expressed by European film operators. The European Commission has extended the deadline for making a decision from July 7 to July 22 to allow time to assess the remedies.

The "arms dealer" of electricity's super ammunition: Bloom Energy (BE.US) expands financing with BAM fivefold to $25 billion, with AI-driven electricity shortages creating new opportunities. After the market closed on Tuesday Eastern Time, Bloom Energy announced that its financing cooperation for AI power projects with Brookfield Asset Management (BAM.US) has been significantly expanded from $5 billion to $25 billion The initial scale has increased fivefold compared to October 2025. According to the latest agreement between the two parties, Brookfield will provide up to $25 billion in financing support for Bloom Energy's fuel cell power projects through its specialized AI infrastructure fund. This scale has expanded five times from the $5 billion initially announced in October 2025. The two companies stated in a joint announcement that this expansion "reflects the strong and sustained demand from hyperscale data center operators and AI infrastructure developers for fast, reliable, and community-friendly power." The two sides are advancing a brand new "AI factory" model—integrating power, computing, data center infrastructure, and capital from the very beginning of project planning.

Betting on energy transition and AI demand, the Middle East conflict sounds the supply alarm! Alcoa (AA.US) swallows South32 for $5.6 billion to expand its aluminum footprint. Alcoa has agreed to acquire bauxite, alumina, and electrolytic aluminum assets from South32 Ltd. for up to $5.6 billion. This move comes at a time of strengthening long-term demand and exposes the vulnerability of supply amid geopolitical conflicts in the Middle East, further consolidating Alcoa's position as a top global aluminum producer. According to a statement from both companies, Alcoa will pay $3.1 billion in cash and about $1 billion in Alcoa stock, while assuming $750 million in net debt and lease liabilities. Additionally, if alumina and aluminum prices exceed agreed thresholds over the next four years, South32 will receive an additional $750 million in contingent consideration.

The AI infrastructure boom drives valuations to a 30-year high! Caterpillar (CAT.US) becomes the latest target of "Big Short" Michael Burry. Michael Burry, the real-life figure behind "The Big Short," stated on Tuesday that he has established a short position in Caterpillar (CAT.US) and believes that this construction machinery manufacturer has become one of the highest-valued beneficiaries of the AI investment boom. Burry noted that Caterpillar's current valuation has reached a level that warrants his close attention. A chart he shared shows that while the stock price has reached an all-time high, Caterpillar's price-to-sales ratio has risen to its highest level in at least the past 30 years. Additionally, Burry has also established new short positions in NVIDIA (NVDA.US), Applied Materials (AMAT.US), Tesla (TSLA.US), and the iShares Semiconductor ETF (SOXX). He is preparing for what he believes is an increasingly overextended rally in AI concept stocks.

Important Economic Data and Event Forecasts

Beijing time 20:15: U.S. June ADP employment change.

Beijing time 21:30: Federal Reserve Chairman Waller, European Central Bank President Lagarde, Bank of England Governor Bailey, and Bank of Canada Governor Macklem will speak at the European Central Bank Forum.

Beijing time 21:45: U.S. June SPGI Manufacturing PMI final value.

Beijing time 22:00: U.S. June ISM Manufacturing PMI.

Beijing time 22:30: U.S. EIA crude oil inventory change for the week ending June 26