- The futures of the three major U.S. stock indices fully rebounded before the market opened on Thursday, with Nasdaq 100 futures leading the rise by 1.49%. This was mainly driven by the easing of geopolitical tensions and the decline in oil prices, alleviating previous market concerns about tightening monetary policy.
- U.S. President Donald Trump revealed that Apple and Intel will collaborate to design and manufacture chips in the U.S. This news pushed Intel's pre-market stock price significantly higher and led to a collective rise in the semiconductor sector, including Nvidia and Micron Technology.
- The Chicago Mercantile Exchange Group's interest rate watch tool shows that the market's probability expectation for the Federal Reserve to raise interest rates by 25 basis points in September surged from 27% the previous day to 50%, indicating that traders are quickly factoring in the hawkish policy stance of the new chairman, Kevin Warsh.
Geopolitical Premium Fades and Futures Rebound Before Market
On Thursday, the U.S. financial market showed a clear recovery in risk appetite. As of 7:06 AM Eastern Time, Dow Jones Industrial Average futures rose by 165 points, S&P 500 futures increased by 56.25 points, and Nasdaq 100 futures climbed by 441.5 points. The core catalyst for the rebound came from the easing of commodities and geopolitical tensions. The U.S. and Iran officially announced a temporary agreement signed by the two presidents, deciding to extend the ceasefire period by 60 days. This development led international oil prices to fall to a more than three-month low, not only lowering inflation expectations but also providing a valuation recovery window for equity assets.
Tech Giants' Cross-Sector Collaboration Injects Momentum into Supply Chain
On the individual stock level, the technology sector, particularly the semiconductor industry chain, became the absolute main force of the pre-market rebound today. Intel (INTC:US) surged by 8.4% in pre-market trading, mainly stimulated by policy trends. U.S. President Donald Trump publicly stated that Apple (AAPL:US) has agreed to collaborate with Intel to design and manufacture chips domestically in the U.S. This news effectively reversed the market's pessimistic expectations of Intel's manufacturing capabilities. Boosted by this, Apple's pre-market rose by 0.77%, Nvidia (NVDA:US) increased by 1.3%, and Micron Technology (MU:US) and Marvell Technology (MRVL:US) also rose by 4.6% and 5.5%, respectively.
Reconstruction of Monetary Policy Expectations and Surge in Rate Hike Probability
Although market sentiment was soothed by geopolitical news, macro-level tightening pressure has not been eliminated. In the previous trading day, due to the new Federal Reserve (Fed) Chairman Kevin Warsh emphasizing the necessity of curbing inflation, the three major stock indices were under downward pressure. Mark Haefele, Chief Investment Officer of UBS Global Wealth Management, pointed out that the hawkish forecast of the new leadership means that the threshold for substantial policy adjustments in the short term has been raised. Currently, CME tools show that the probability of a 25 basis point rate hike in September has reached 50%. If core inflation data continues to rebound in the future, market pricing may face revaluation pressure.
Corporate Mergers and Quarterly Derivatives Expiry Intensify Volatility
In addition to macro and technology mainlines, several individual stocks experienced significant fluctuations before the market due to earnings reports or merger announcements. Rumble (RUM:US), renamed RUM Group, surged by 16% pre-market, mainly due to its completion of the acquisition of German AI cloud company Northern Data. Firearms manufacturer Smith & Wesson (SWBI:US) saw its stock price rise sharply by 15.3% due to fourth-quarter sales exceeding expectations. Conversely, Accenture (ACN:US) stock price plummeted by 11.1%, mainly because the company lowered the upper limit of its fiscal year revenue forecast. Additionally, as Thursday coincides with the triple witching day of simultaneous expiration of stock, index options, and futures contracts, the concentrated exercise of derivative tools may intensify high-frequency trading volatility in today's U.S. stock trading session.
