US Stock Futures Dive Further

Morgan Stanley’s strategy team, led by Mike Wilson, stated that after the semiconductor sector’s 20% correction, broader industry segments could drive further market gains. “On the contrary, we believe the market’s broadening trend will persist. Once this correction ends, broader industry segments will push the market higher before the end of the year,” the team noted. Morgan Stanley added that consumer discretionary and transport sectors may benefit, as expectations of improved earnings in these areas have not yet been fully priced into their stock prices. The firm favors large-scale cloud computing companies over chip firms in the coming months. However, Wilson’s team pointed out that cloud stocks have risen roughly 30% more than chip stocks over the past three weeks, so their current risk-reward ratio has declined. Morgan Stanley remains bullish on large tech firms, citing their strengths including stable core businesses, the growth potential of generative AI, and profit-enhancing capabilities. The firm maintains its year-end S&P 500 target of 8,000, but warns that the index could fall back to around 7,000 if momentum trading reverses broadly or the Middle East conflict escalates further.

Pre-market key news for US stocks: 1. Trump will impose new tariffs on dozens of countries as early as this week. 2. Trump has agreed to the ethics provisions of the CLARITY Act, which is nearing a Senate vote. 3. The "hidden debt" of America's five largest tech giants has surged to $1.65 trillion. 4. JPMorgan Chase CEO: Investors are underestimating market risks, and will not buy stocks or long-term US Treasuries for now. 5. Goldman Sachs: If the Strait of Hormuz remains blocked long-term, international oil prices could exceed $120 per barrel by the end of the year. 6. AI storage demand rises further: Nvidia’s CMX is expected to consume over 100 million TB of NAND next year, with Samsung already commencing supply.

Greeks.live noted in a post that Bitcoin has rebounded to $66,000, a positive signal that not only marks a nearly two-month high but also re-enters the trading range it has held since the start of the year. Implied volatility (IV) across all major tenures remains largely stable; year-to-date, IV for all tenures has stayed below 40%, indicating investors have gradually adapted to this extremely low-volatility market environment. During the sharp sell-off in February this year, IV across all major tenures once climbed above 50%, but for most of the rest of the year, IV has remained below 45%. This may signal that low volatility is gradually becoming the new normal in the crypto options market.

According to Reuters survey data, 78 out of 104 economists (compared with 78 out of 102 in last month’s survey) expect the Federal Reserve to hold the federal funds rate steady at 3.50%-3.75% throughout 2026.

The Russian State Duma has approved a bill to establish regulatory rules for the cryptocurrency market, setting a legal framework for domestic crypto asset operations and the use of crypto assets in cross-border trade. According to official records from the Russian State Duma, the parliament on Tuesday completed the second and third readings of Bill No. 1194918-8, titled the "Digital Currency and Digital Rights Law," and formally passed it. The legislative body had previously scheduled the final vote as planned. The bill establishes a regulatory framework for crypto market participants, covering crypto trading platforms, brokers, asset management firms, custodians, and other entities, and sets out compliance requirements for the operations of relevant enterprises. Under the bill’s provisions: crypto assets are permitted for use in foreign trade (cross-border trade) settlements; however, the use of cryptocurrency for payments for goods and services within Russia remains prohibited. The main provisions of the bill are scheduled to take effect on September 1, 2026, with a transition period running until July 1, 2027. The bill still requires the signature of Russian President Vladimir Putin to officially become law.

US Treasury Secretary Scott Bessent announced the freezing of $130 million worth of cryptocurrency wallets linked to Iran’s Islamic Revolutionary Guard Corps.