Premarket Market Movements 1. On Tuesday, May 12, U.S. stock index futures were down across the board. At the time of writing, Dow futures were down 0.07%, S&P 500 futures were down 0.42%, and Nasdaq futures were down 0.90%. 2. At the time of writing, Germany's DAX index was down 1.05%, the UK's FTSE 100 was down 0.40%, France's CAC 40 was down 0.58%, and the Euro Stoxx 50 was down 0.99%. 3. At the time of writing, WTI crude oil was up 3.46% to $101.46 per barrel. Brent crude was up 3.21% to $107.56 per barrel.
Market News Will the "Inflation Beast" Roar Again in the U.S.? The upcoming CPI report could pull the hot stock market towards a short-term correction. Data expected from the U.S. Bureau of Labor Statistics is forecast to show the headline Consumer Price Index (CPI) rose 3.8% year-over-year in April. If the latest forecasts from economists are accurate, this would be higher than the 3.3% year-over-year increase in March. Economists unanimously predict the headline CPI rose 0.6% month-over-month in April. Meanwhile, the core CPI is also expected to show a significant jump, with the month-over-month increase potentially rising from 0.2% to 0.4%, and the year-over-year increase possibly rising from 2.6% to 2.7%. According to the latest assessments from Wall Street strategists, an excessively hot U.S. CPI report could trigger a major market pivot—specifically, if CPI significantly exceeds expectations, the market could shift further from "the Fed pausing rate cuts this year" to "the Fed may have to reconsider rate hikes." Global stock, bond, and currency markets could enter a more intense repricing phase. This could mean, at least in the short term, a significant downward correction trend for the global stock market bull run, particularly the AI computing power trade fueled by rising risk appetite.
Reports Suggest U.S. May Consider Resuming Military Action Against Iran. According to the latest information, insiders within the U.S. government have revealed that due to stalled U.S.-Iran negotiations, the U.S. is now "more seriously considering" resuming military action against Iran than in recent weeks. U.S. sources indicate there are differing views within the current U.S. administration on the Iran issue. Some officials advocate for strong measures, including more targeted strikes, to weaken Iran and force concessions at the negotiating table; others hope to give diplomatic talks more time. Additional reports suggest one option currently under consideration by the U.S. is restarting the so-called "Freedom Plan" to "guide" ships through the Strait of Hormuz; another option is resuming military action against Iran.
"Big Short" Burry Warns: Nasdaq's "Parabolic" Surge Resembles Pre-Internet Bubble, Poised for Sharp Reversal. Investor Michael Burry, famous from the movie "The Big Short," has again warned that the Nasdaq 100 Index is heading for a sharp reversal after a "parabolic" surge that has pushed tech stock valuations to unsustainable highs. Burry posted that current market conditions resemble the peak before the dot-com bubble burst. He specifically pointed to the sharp rise in chip stocks, which has driven the Philadelphia Stock Exchange Semiconductor Index up nearly 70% since late March. He stated that, in his estimation, the Nasdaq 100's price-to-earnings ratio is 43 times—far above the implied level of around 30 times—because "Wall Street may be overestimating earnings for our fastest-growing, highest-valued companies by more than 50%." He said, "We are witnessing history. And for the stock market, it's not good history." He likened it to "the scene minutes before a horrific car crash."
As the "Big Short" Calls for a Crash, a Prominent Investor Provides an "AI Bull Market Timeline": The Bubble Could Inflate for Another Year. In the view of Dan Niles, founder and portfolio manager at Niles Investment Management, this AI-driven rally is far from over—it will likely continue for at least another year before reaching a true peak. He compared today's AI-driven market to the internet bubble era but emphasized a key difference—this time, there is strong fundamental support behind the growth. This judgment is supported by data—Information Technology and Communication Services contributed 77% of the S&P 500's gains and 67% of first-quarter earnings growth, also contributing 55% of the quarter's real GDP growth. First-quarter S&P 500 earnings growth reached 28%, the highest since Q4 2021, with the Semiconductor & Equipment sector showing the highest growth at 99%. Niles explained, "A bubble may already exist, but before it bursts, it can still inflate further."
Oil Prices Could Soar to $150! JPMorgan Warns: High Inflation Will Force the Fed to "Hold Rates Steady" Until 2027. JPMorgan issued a stark assessment of the global oil market, warning that supply disruptions from U.S.-Iran conflict could push Brent crude prices to $150, lift U.S. inflation to 4%, and result in the Federal Reserve holding rates steady until 2027. Natasha Kaneva, JPMorgan's Global Head of Commodities Strategy, stated that global crude oil supply disruptions reached 13.7 million barrels per day in April, accounting for about 14% of global demand. With the Strait of Hormuz closed, the spare capacity of Saudi Arabia and the UAE is unusable, leaving the global crude market heavily reliant on inventory drawdowns to cover the shortfall. Last month, inventory drawdowns reached 7.1 million barrels per day. Even so, there remains a shortfall of about 2 million barrels per day. On prices, JPMorgan expects Brent crude's near-term price to fluctuate between $120 and $130 per barrel, potentially reaching $150 or higher if disruptions persist into mid-May.
The Illusion of Rate Cuts is Over! Goldman Sachs and Bank of America Join the Pivot, April Jobs Report Could Be the "Final Straw" for the Fed. Goldman Sachs and Bank of America are the latest major Wall Street banks to join the camp "delaying rate cut forecasts." They believe both employment and inflation data support the case for the Fed holding rates steady at least until the end of this year. Michael Gapen, Head of U.S. Economics Research at Bank of America, stated, "The data simply does not support a rate cut this year. Core inflation is too high and rising. The strong April jobs report was the final straw, especially given the hawkish commentary from Fed officials." Gapen and his colleagues now expect the Fed will not cut rates again until July 2027, a significant shift from their previous forecast of September this year. Following the release of the April non-farm payrolls data last Friday, the Goldman Sachs team also pushed back its forecast for the Fed's next rate cut from September to December 2026.
Individual Stock News Major tech stocks were broadly lower premarket, with chip stocks leading the declines. In Tuesday's U.S. premarket trading, as of the time of writing, Intel (INTC.US) was down over 4%, Micron Technology (MU.US) and Qualcomm (QCOM.US) were down over 3%, AMD (AMD.US), ASML (ASML.US), and Taiwan Semiconductor Manufacturing Company (TSM.US) were down nearly 2%, while Tesla (TSLA.US), Broadcom (AVGO.US), and Oracle (ORCL.US) were down over 1%.
eBay (EBAY.US) Rejects GameStop's (GME.US) $56 Billion Takeover Bid, Calling It Not Credible. GameStop CEO Ryan Cohen revealed last week that the company planned to acquire e-commerce platform eBay for approximately $56 billion in cash and stock. However, eBay rejected the takeover offer on Tuesday, with the company's chairman stating in a letter that the offer was "neither credible nor attractive." Prior to this, many investors had been skeptical about Cohen's ability to complete the deal, as he had not fully explained how the acquisition would be funded. Some market observers also speculated that Cohen's move was not a genuine attempt at a merger but rather an unconventional way to boost GameStop's stock price. Furthermore, eBay's rejection could trigger a proxy fight to replace eBay's board with one more favorable to a GameStop deal. As of the time of writing in Tuesday's premarket, GameStop was down nearly 3%, and eBay was down nearly 1%.
Vodafone (VOD.US) Q4 Sales Growth Exceeds Expectations, German Market Service Revenue Returns to Growth. Vodafone stated that thanks to its focus on core markets and a recovery in its German business, organic revenue growth in the last quarter exceeded analyst expectations. For the fourth fiscal quarter ending in March, organic service revenue grew 5.1% year-over-year to €8.6 billion (approximately $10.1 billion), exceeding the average analyst forecast of 4.9%. Vodafone expects its adjusted EBITDA after leases (EBITDAal) for fiscal 2027 to be between €11.9 billion and €12.2 billion, with adjusted free cash flow between €2.6 billion and €2.9 billion. For fiscal 2026, EBITDAal grew 3.8% year-over-year to €11.4 billion. This metric is often used in industries with significant lease burdens to reflect cash flow conditions. As of the time of writing, Vodafone was down nearly 6% in Tuesday's U.S. premarket trading.
AST SpaceMobile (ASTS.US) Q1 Revenue and Profit Fall Far Short of Expectations; Full-Year Guidance Provides Only Solace. Satellite communications company AST SpaceMobile reported a first-quarter earnings report that greatly disappointed the market. The report showed the company's Q1 revenue was only $14.73 million. While this represents explosive growth from $718,000 in the same period last year, it fell far short of market expectations of $39 million. The net loss attributable to shareholders for the quarter was a substantial $191 million, compared to a loss of $45.7 million in the same period last year. The market had previously expected a loss of $86.8 million. The loss per share was $0.66, compared to a loss per share of only $0.20 in the prior-year period. The market had expected a loss per share of $0.24. A significant increase in operating expenses was a major driver of the widening loss. Additionally, AST SpaceMobile maintained its full-year 2026 revenue guidance in the range of $150 million to $200 million, providing rare solace for the market. Current Wall Street estimates for the company's full-year revenue are around $181 million. As of the time of writing, AST SpaceMobile was down over 12% in Tuesday's after-hours trading.
Tencent Music (TME.US) Q1 2026 Total Revenue Reaches RMB 7.90 Billion, Driven by Strong Near-30% Growth in Music-Related Non-Membership Service Revenue. In the first quarter of 2026, Tencent Music maintained steady performance growth. Tencent Music's total revenue for Q1 was RMB 7.90 billion, a year-over-year increase of 7.3%; adjusted net profit was RMB 2.33 billion, up 4.8% year-over-year; adjusted EBITDA was RMB 2.83 billion, up 10.5% year-over-year. Music-related service revenue showed diversified growth, increasing 12.2% year-over-year this quarter to RMB 6.51 billion. Within this, music-related membership service revenue reached RMB 4.57 billion, up 6.6% year-over-year; music-related non-membership service revenue grew particularly strongly, up 28.0% year-over-year to RMB 1.94 billion. In other news, China's State Administration for Market Regulation issued an announcement conditionally approving Tencent's acquisition of equity in Himalaya with restrictive conditions. As of the time of writing, Tencent Music was up over 6% in Tuesday's U.S. premarket trading.
Important Economic Data and Events Schedule Beijing Time 20:30: U.S. April CPI Data Beijing Time Next Day 00:00: EIA Releases Monthly Short-Term Energy Outlook Report Beijing Time Next Day 01:00: Chicago Fed President Austan Goolsbee Participates in Q&A Session at Local Chamber of Commerce
Earnings Preview for Wednesday Premarket: Alibaba (BABA.US), Nebius (NBIS.US), WeRide (WRD.US), Flex LNG (FLNG.US), uCloudlink (UCL.US)
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