Most Important News

1. US-Iran Tensions: Diplomatic Talks Continue Amidst Conflict;
2. AI and Inflation: Potential Rate Hike Concerns by Fed's John Williams;
3. SK Hynix Debuts on US Market with Record $26.5B ADR Offering;
4. Circle Shares Surge Premarket as Trust Bank Charter Approved;

S&P 500 futures were relatively unchanged on Friday after a strong Wall Street session that put the index, as well as the Nasdaq Composite, on track for weekly gains.

As of 03:38 PM Riyadh Time, futures tied to the broad market index traded around the flatline, while Nasdaq 100 futures declined 0.38%. Dow Jones Industrial Average futures rose 77 points, or 0.15%.

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As of 03:40 PM Riyadh Time, top pre-market movements are as follows:

US-Iran Tensions: Diplomatic Talks Continue Amidst Conflict

A US official stated that the US remains committed to finding a resolution on the Iran issue, with technical negotiations ongoing. Despite recent conflicts, the continuation of these talks indicates that diplomatic channels remain open. This development suggests a reduced likelihood of the conflict escalating into full-scale war or a prolonged disruption of the Strait of Hormuz. However, it does not imply that geopolitical risks have been fully resolved.

AI and Inflation: Potential Rate Hike Concerns by Fed's John Williams

John Williams, President of the New York Fed and Vice Chair of the FOMC, highlighted AI-driven demand as a primary inflation risk. If AI industry growth continues to outpace supply, creating sustained inflationary pressure, the Fed might be compelled to raise interest rates.

Williams also discussed energy prices, noting that despite Middle East tensions, a long-term oil price surge is unlikely. Based on the current oil futures curve, a decline in oil prices over the next 6 to 12 months is a reasonable expectation, suggesting that energy prices are near their cyclical peak and are likely to gradually decrease.

Rising Leverage Costs Pose Hidden Risks for US Equity Market

Morgan Stanley reports that stock margin financing costs surged 200 basis points above the federal funds rate on June 26, the highest since December 2024. Although quarterly metrics have eased to 89 basis points, structural factors continue to drive up rates. Morgan Stanley strategist Martin Tobias indicated that the risk of rising financing costs may persist, becoming a hidden threat amid high US equity valuations.

SK Hynix Debuts on US Market with Record $26.5B ADR Offering

SK Hynix Inc.(SKHYV.US) has raised $26.5 billion through its ADR issuance, marking the largest-ever US listing by a foreign company. The funds will primarily support an advanced packaging plant in Indiana and next-gen AI memory chip R&D. UBS forecasts HBM demand to surge 90% in 2026 and 77% in 2027, with global chip revenue hitting $1.76 trillion by 2027. 

Meta Considers Leasing AI Compute Power Amid Resource Strain

Meta Platforms(META.US) is contemplating renting out its AI compute resources due to industry-wide shortages. CEO Mark Zuckerberg noted that their current capacity is largely dedicated to internal AI development. However, he mentioned that if leasing offers are lucrative, they might consider external rentals. Zuckerberg emphasized that high external bids could make leasing more valuable than solely internal use.

TeraWulf Plans $3.5B Financing for AI Data Center Expansion

TeraWulf Inc.(WULF.US) is seeking $3.5 billion in debt financing to fund its Kentucky data center campus. The plan includes debuting in the leveraged loan market and issuing high-yield bonds to support AI infrastructure growth. CFO Patrick Fleury revealed the financing will launch this year, with Morgan Stanley likely leading the arrangement. Previously, TeraWulf Inc. raised $3.2 billion and $1.3 billion through high-yield bonds in 2022.

Circle Shares Surge Premarket as Trust Bank Charter Approved

Stablecoin issuer Circle(CRCL.US) announced Friday that the US Office of the Comptroller of the Currency (OCC) has approved the establishment of "Circle National Trust," a new institution under federal supervision. This trust bank will oversee asset custody and settlement services but operates differently from traditional retail banks, as it does not accept customer deposits. Circle CEO Jeremy Allaire emphasized that the OCC's approval is a significant milestone in integrating blockchain technology and digital assets into the core of the US financial system.

Delta Air Lines Exceeds Q2 Expectations

Delta Air Lines, Inc.(DAL.US) reported adjusted Q2 revenue of $17.67 billion, surpassing the market expectation of $17.53 billion. The adjusted net profit was $1.03 billion, above the expected $985.2 million. Adjusted earnings per share (EPS) were $1.56, exceeding the anticipated $1.51. Delta maintains its full-year adjusted EPS forecast at $6.50-$7.50, higher than the market expectation of $5.95.