US Stock Market Preview: All Three Major Index Futures Rise; US July CPI to be Released Tonight; Nebius (NBIS.US) Surges After Earnings

Pre-market Market Trends

1. Before the U.S. market open on Wednesday, August 12, U.S. stock futures rallied across all three major indexes. At the time of writing, Dow futures were up 0.12%, S&P 500 futures were up 0.26%, and Nasdaq futures were up 0.71%.

2. At the time of writing, Germany’s DAX index was up 0.35%, the UK FTSE 100 was down 0.04%, France's CAC40 was down 0.22%, and the Euro Stoxx 50 was up 0.13%.

3. At the time of writing, WTI crude was up 0.49% at $83.61 per barrel. Brent crude was up 0.29%, trading at $89.17 per barrel.

Market News

The “Anchor of Global Asset Pricing” Approaches a Critical Moment! If the U.S. CPI Surprises Dovishly, a Short Squeeze in U.S. Treasuries Could Boost Risk Asset Rallies. Wall Street strategists are nearly perfectly split on whether the Federal Reserve will choose to raise rates again next month. However, one point of consensus remains: Wednesday's U.S. CPI inflation report will largely determine the Fed's next move. Based on swaps market trades, traders currently price about a 50% chance of a 25 basis-point hike. After weaker-than-expected nonfarm payrolls in July, the market remains deeply divided on the odds of a 25bp hike in September, at nearly 50:50, while the Fed, under Powell’s leadership, has noticeably reduced forward guidance, forcing markets to rely more on hard data to map out policy paths. Therefore, the impact of the July CPI is clearly asymmetric—a mild inflation print can further undermine the case for hikes, but surprisingly hot data could quickly restore a September hike as the market baseline. For the “anchor of global asset pricing”—the 10-year U.S. Treasury yield—the bond market's current risk-reward is already distinctly tilted toward “a rapid yield decline driven by a mild July CPI,” mainly because key macro data and CTA bond positioning are creating a strong resonance.

Fed Officials Warn Unanimously of Inflation Risks! Tonight’s July CPI Is Expected to Be a Key Decision Point for Rate Hikes. Ahead of the U.S. July CPI, multiple policymakers warned about the persistent risks of high inflation. Chicago Fed President Goolsbee said he is more concerned about inflation running too high than any weakening in the labor market. Harker, in a Monday interview, noted that a single 25-basis-point hike may not be enough to significantly affect the broader economy, and if the Fed needs to further tamp down inflation via monetary policy, multiple hikes could be necessary. However, she also emphasized that she does not want to prejudge how many hikes may be necessary, nor set a preordained endpoint for this cycle. Last week, St. Louis Fed President Musalem said that with the inflation rate above the Fed’s 2% target, policymakers cannot afford to endure higher inflation while waiting for stronger productivity growth. Fed Governor Cook likewise reiterated last week that she is prepared to support further hikes if inflation does not continue to slow, warning that as inflation stays above the 2% target for longer, the Fed has less time to wait, and controlling inflation in the future could become even more difficult. Minneapolis Fed President Kashkari stated the Fed should gradually raise rates now to lower inflation that remains above target, and avoid being forced into more aggressive rate hikes if inflation becomes even more entrenched.

“AI Computing Power Demand Bellwether” Delivers Another Blowout! Foxconn Q2 Profit Surges 35%, July Revenue Soars 54%—AI Infrastructure Supercycle Still Unfolding. Foxconn’s latest quarterly profit rise beat all analyst consensus estimates, highlighting persistently strong demand from major cloud providers and leading AI application companies such as Anthropic and SpaceXAI for Nvidia AI GPU server clusters. Financial results show that, for the three months ending in June, Foxconn's net profit jumped 35% year-over-year to NT$60 billion (about $1.9 billion), beating the analyst average expectation of NT$58.4 billion. The company had previously reported a 40% year-over-year jump in quarterly revenue. July revenue soared 54.2% to NT$946.5 billion. Analysts expect Foxconn’s cumulative revenue for the current quarter to continue rising strongly by 32% year-over-year, despite a high base last year. In terms of outlook, Foxconn’s management projects AI server rack shipments in Q3 to see “strong double-digit sequential growth” and that production capacity in the U.S.—including Texas and Wisconsin—will be expanded. Foxconn management’s results statement clearly said that AI computing infrastructure is driving company growth and that the AI server business outlook remains “strong.”

Braking Overenthusiastic Retail Investors: South Korea Further Tightens Leverage ETF Regulation, Requiring Five-Day Simulation Trading for Single-Stock Leverage Trades. South Korea will require new investors in single-stock leveraged ETFs to complete a practice trading exercise, further tightening regulations on these high-risk, volatility-amplifying products. The Financial Services Commission (FSC) announced that new investors in single-stock leveraged ETFs must complete at least 5 days and a cumulative total of at least 5 hours of simulated trading. The new rule will apply to both domestic and overseas investments starting August 19. Following previous waves of losses that cost investors billions, this is regulators’ latest move to curb retail participation in leveraged ETFs. Earlier, the minimum cash margin for such trading was raised to 30 million won (around $21,000), and mandatory online training for new single-stock leveraged ETF investors was extended to 3 hours.

IEA: Despite Declining Demand, Global Oil Supply Gap Poised to Widen. The International Energy Agency (IEA) said that, even as the Iran war escalates and high oil prices further hit demand, global oil inventories in this quarter will fall more than double earlier estimates. The IEA’s monthly report said that “a new round of hostilities and shipping disruptions” block production recovery, and the global oil market will face a daily supply gap of 1.8 million barrels, with the shortfall possibly reaching a five-year high by 2026. The IEA nearly doubled its forecast for this year's global oil demand contraction to 1.6 million barrels per day, while global inventories are tightening again. This will be the largest annual average demand drop since 2020’s pandemic. The IEA expects depleted inventories to be replenished next year as the oil market returns to surplus. The agency added that after record releases of emergency reserves in March by members nations including the U.S., Japan and Germany, these countries will need to rebuild emergency stockpiles.

Reports: No Discussions Ongoing Between US and Iran on Extending Ceasefire. According to reports, a senior Iranian official said: "There are currently no discussions between Iran and the U.S. on extending the ceasefire. From Iran’s perspective, the ceasefire does not have an official end date, so there's no need for an extension. The U.S. violated the interim agreement 48 hours after it was reached and exited the deal days later. Current discussions center on the U.S. rejoining the memorandum of understanding and setting a timeline for fulfilling commitments, but no progress has been made so far."

Individual Stock News

Strong AI Demand Drives Growth—Nebius (NBIS.US) Q2 Revenue Beats Expectations. On Wednesday, Nebius Group reported second-quarter revenue that beat market expectations, fueled by robust demand for AI infrastructure and cloud services, which drove larger contract wins and higher compute capacity pricing. This pushed its shares up roughly 15% in pre-market trading. Data shows total revenue for the quarter ending June at $582.3 million, above the analyst average estimate of $572.75 million. Core AI cloud services accounted for about 98% of total revenue, up over 500% year-over-year. The company also reaffirmed its full fiscal year 2026 earnings guidance, noting accelerated AI compute demand is enabling it to win larger and higher-margin customer deals. Nebius disclosed that four milestone AI cloud service contracts were signed this quarter, each with an average total value exceeding $1 billion, nearly four times higher than last quarter’s total contract value. The company also said pricing power improved this quarter, benefiting from strong demand for next-generation AI chips and higher rental rates for previous-generation GPUs. Roughly 70% of contracts signed this period included customer prepayments covering 50–60% of related capex.

CoreWeave (CRWV.US) Backlog Breaks $104 Billion, Raises Full-Year Guidance. CoreWeave’s Q2 revenue came in at $2.58 billion, up 112% year-over-year, topping the consensus estimate of $2.56 billion. Net loss for the quarter was $626 million, or $1.14 per share, mainly due to large interest expenses from infrastructure expansion—the quarter’s net interest cost reached $640 million, more than double last year’s but still significantly better than analysts’ estimated loss of $1.41 per share. The highlight was CoreWeave’s revenue backlog, which soared to about $104 billion—a 246% year-over-year increase and up from $99.4 billion last quarter. Full-year 2026 revenue guidance was raised to $12.4–13.2 billion from $12–13 billion. Analysts previously expected $12.63 billion.

AI Optical Communications Demand Fuels Growth—Lumentum (LITE.US) Q4 Results and Q1 Guidance Beat Expectations. Lumentum’s Q4 revenue rose 109.3% year-over-year to $1.006 billion, beating the analyst consensus of $990 million. Adjusted net profit surged 415% to $326 million; adjusted EPS hit $3.23, above the $2.97 consensus; adjusted gross margin was 50.4%, up 1260 basis points year-over-year and ahead of the 48.8% consensus; adjusted operating margin was 36.6%, up 2160 basis points. Lumentum’s Q1 FY2027 guidance also exceeded expectations: projected Q1 revenue is $1.225–1.275 billion (midpoint $1.25 billion vs. consensus $1.15 billion); projected adjusted EPS is $4.05–$4.35 (midpoint $4.20 vs. consensus $3.58).

Super Micro Computer (SMCI.US) Quarterly Revenue Outlook Beats Even the Most Optimistic Forecasts as AI Compute Demand Surge Confirmed. Revenue for the quarter ending September is expected to reach $14.5–15.5 billion, with adjusted EPS anticipated at $1.01–1.10. Consensus market data shows analysts expected about $12 billion in revenue and $0.74 in EPS, while Super Micro's outlook even surpasses the previous bull case of $13.3 billion. The company further expects full-year revenue beginning this July to reach $65–72 billion, versus the consensus of $54.4 billion.

Consumer Electronics Industry Faces New Price Hikes—Microsoft (MSFT.US) Reportedly Raises Windows 11 License Fees. The consumer electronics sector, already hit by higher costs from semiconductor shortages, now looks set for higher software expenses as well. Microsoft has reportedly raised Windows 11 licensing fees by 7–10%, with a much steeper increase than previous years and higher fees for high-end CPUs. Asus and Acer are planning around 5% price hikes later this year; Asus’s average product prices are already up 30% vs. Q4 2025.

Musk: AI to Account for 99% of SpaceX (SPCX.US) Valuation in Five Years, Targeting 10 GW Compute Power by End of Next Year. At a recent SpaceX all-staff meeting, Elon Musk outlined the company’s future strategy, putting AI at the top priority. In his view, SpaceX’s AI business will quickly outpace the traditional aerospace sector, becoming the main revenue and valuation driver, with rockets, spacecraft and Starlink supporting as infrastructure. Musk said, “It’s not possible, it’s certain that by September, our AI revenue will surpass all of SpaceX’s other business lines combined.” He further projected, “Five years from now, AI will definitely account for 99% of our valuation, and SpaceX’s total value will be astronomical.” Gaining an AI edge was “the most important message” at the meeting: “We must win the AI race, because AI and robotics will be the dominant forces of the future.” Musk claims SpaceX has built the “world’s most powerful AI training cluster” and aims to expand computing power tenfold by the end of next year—to 10 GW. “If we hit 10 GW AI compute next year, it will yield $300–500 billion in annual revenue—a massive number,” Musk said.

Samsung (SSNLF.US), SK Hynix (SKHY.US) Eye “Epic” Dividends and Buybacks Worth Over $140 Billion. According to reports, Samsung Electronics and SK Hynix might announce new shareholder return schemes as early as the end of August, with a combined scale likely to exceed 200 trillion won (about $141.2 billion)—a potential record high. Both firms say timing and size have not been finalized. Market expectations for mega shareholder returns are climbing fast. Meanwhile, Singapore sovereign fund Temasek plans to directly invest in the Korean stock market for the first time using its own capital, targeting positions in Samsung and SK Hynix. Spurred by these developments, shares of both companies rose about 6% on the day, driving Korea’s KOSPI Index above 6,500 points.

Selling Assets for $100 Billion AI Bet! Oracle (ORCL.US) Launches New Round of Layoffs—Some Teams May See Double-Digit Cuts. According to internal documents and sources, Oracle is planning another round of layoffs to reduce employee costs. Some teams may see cuts reaching double-digit percentages. Managers have been asked to submit lists of affected employees, with the goal of completing the cost cutting before September 1, the start of the fiscal second quarter. This is yet another mass layoff for Oracle in FY2026. According to recent official filings, Oracle cut about 21,000 employees—a 13% reduction—by May 31, 2026, with a global full-time workforce now at about 141,000. The company, for the first time, acknowledged officially that AI adoption was a reason for workforce cuts, stating, “The deployment of AI in our operations has led, and may continue to lead, to a decrease in headcount.” This restructuring is costly: Oracle paid $1.84 billion in FY2026 in severance and other exit costs, far above the $374 million in the prior year. Notably, these layoffs have nearly wiped out the employee gain from Oracle’s $28 billion 2022 acquisition of Cerner.

Google (GOOGL.US) “Storms” Latin America’s Digital Economy! Adds Three New Submarine Cable Systems Linking Chile, Panama and More. Google announced Tuesday it will lay three new submarine cable systems—the Alisios, Canoa, and OlaLuz—across the Americas. According to a press release, Alisios will link the Dominican Republic, Panama, and Chile; Canoa will connect the Dominican Republic and Bermuda; OlaLuz will connect the Dominican Republic and Florida, U.S. Chile is striving to become the region’s digital hub, attracting tech companies with its economic and political stability, extensive fiber network, submarine cables, and abundant renewable energy. Beyond the new Alisios system, ongoing projects include the Google-backed Humboldt submarine cable, which will cross the Pacific Ocean to connect Chile and Australia.

General Motors (GM.US) Strikes Up to $4.5 Billion Parts Procurement Deal to Avert Supply Chain “Choke Points.” General Motors recently entered a unique parts procurement arrangement worth up to $4.5 billion, aimed at protecting cash and guarding against supply chain disruptions that have plagued automotive manufacturing this century. A public filing on Tuesday revealed that GM’s up-to-$4.5 billion parts financing facility involves Procura Auto Parts, a company specializing in rare and critical component procurement. Procura will obtain funding from a syndicate led by JPMorgan and Santander, and make advance payments to certain suppliers on GM’s behalf. In return, GM will issue a formal “Irrevocable Payment Undertaking” (IPU) promising to repay Procura after the relevant parts enter production—or by July 31, 2029, at the latest. This lets GM move inventory costs off its balance sheet while securing future supply. GM declined to disclose which parts are targeted. Automotive “problem parts” include semiconductor chips (including DRAM), rare earth materials, and wiring harnesses.

Important Economic Data and Event Preview

20:30 Beijing Time: U.S. July CPI.

22:30 Beijing Time: U.S. EIA crude oil inventory weekly change for week ending August 7.

01:00 (next day), Beijing Time: U.S. August 12 10-Year Treasury Note Auction.

Earnings Preview

Thursday Morning: Cisco (CSCO.US), Coherent (COHR.US)

Pre-market Thursday: JD.com (JD.US)