[Pre-market U.S. Stocks] Credit risk suppresses risk appetite, and the market's attention turns to financial fitness and interest rate cuts (2025.10.17)

Credit doubts dominate the pre-market atmosphere, and financial pressure becomes the core variable influencing the trend

Before the opening of trading in Taiwan time tonight, U.S. stock sentiment became cautious due to the rising credit risk. Overnight, the main index closed lower after turning dark during the session, and capital preferences quickly switched between long and short periods. The market focus is on whether pressure in regional banking and credit markets spreads, and the impact of this wave of bad debt signals on the SFC's interest rate policy. Investors are concerned about the tension between both ends, one end is the downside risk of credit contraction, and the other end is the policy path that may loosen monetary conditions if credit deterioration deepens.

Regional banks 'exposure to risks is rising, and the chain reaction of bad debts affects emotions

Bad debt risk spread on Thursday in Taiwan time, as two regional banks in the United States mentioned loan quality issues, putting pressure on financial stocks. Recently, two auto-related companies filed for bankruptcy in September. Market reports pointed to a number of financial institutions involved in related credit and asset exposure, including Jefferies (JEF), UBS Group(UBS) and JPMorgan Chase(JPM). Jamie Dimon, CEO of JPMorgan Chase, used a cockroach as a metaphor for risk proliferation, reminding that there may be more problems behind a single incident that need to be revealed, and that bad debts and estimated losses in the financial system have also become highly sensitive factors in pre-market pricing.

Credit pressure drives policy paths, and easing expectations and recession risks are simultaneously seestering

Spreads in the credit market and bank loan losses are seen as leading signs of a cooling economy. If bad debts expand further, the Fed may become cautious in its trade-off between growth and financial stability. Market discussions focus on the Timeline of whether credit deterioration accelerates interest rate cuts. Some market views such as financial show host Jim Cramer pointed out that credit losses often make policymakers more sensitive to slowing demand. However, policy adjustments need to be based on inflation and employment trends, and short-term swings in interest rate expectations will also increase asset volatility.

Macroeconomic data and signals need to be clarified, inflation and employment are still the cornerstones of pricing

Although pre-market trading is dominated by financial events, subsequent data such as inflation, employment, retail sales and manufacturing surveys will continue to calibrate interest rate expectations and growth trajectories. If the downward trend of inflation and the signal of cooling demand strengthen at the same time, the pressure on the interest rate curve is expected to ease. On the contrary, if price stickiness remains high or the resilience of the labor market remains unchanged, maintaining tight financial conditions will suppress valuation elasticity. The interaction between data and financial pressure has become the main source of wait-and-see before the market.

European stocks closed slightly higher against the wind, while U.S. stocks fell overnight without changing their risk aversion.

European stock markets moved moderately late Thursday night in Taiwan time. The European Stoxx 600 index rose 0.69%, and the UK's FTSE 100 index rose 0.12%. The UK's economic growth in August was in line with expectations for a moderate pace during the year. However, risk aversion prevailed on Wall Street. The early strength of major U.S. stock indexes failed to continue, and the final decline reflected market repricing due to credit pressure. The moderate rebound in European stocks is temporarily difficult to reverse the high sensitivity of U.S. stocks to financial information.

Volatility in raw materials and foreign exchange markets is amplified, and costs and spreads affect the performance of stocks

The trend of oil and gold prices has attracted attention under changes in risk sentiment. If oil prices rebound, it will put pressure on aviation and transportation costs. The extent to which gold prices are supported by safe-haven demand will also affect capital allocation. The strength of the US dollar index affects the evaluation of export-oriented industries and multinational income companies. Under the environment of rising interest rates and a strong US dollar, the pressure on discount and financing costs on growth stocks and highly leveraged industries has increased simultaneously. The response of pre-market pricing to spreads and exchange rates may diverge among financial, industrial and technology supply chains.

Supply chain and geopolitical risks are heating up, and key mineral policies affect new energy vehicles and industrial metals

China's Ministry of Commerce said that the United States was exaggerating panic on rare earths related issues and alleged that it was willing to dialogue. Information on the supply chain has brought the price difference between rare earths and magnetic materials to the focus. If policy frictions occur on key minerals, it may affect the pace of capital expenditures such as electric vehicles, wind power and high-end industrial manufacturing, and will also indirectly affect the evaluation of materials and equipment groups in the middle and upper reaches of U.S. stocks. Interwoven with geographical variables and tariff frameworks, companies are becoming more defensive about inventory and procurement strategies.

Tariff costs squeeze profits, and the burden structure of enterprises and consumers is tested again

The S & P report pointed out that the cost of tariffs this year is estimated to reach US$1.2 trillion, with companies bearing about one-third of the cost, and a larger part of the remaining cost will eventually be absorbed by consumers. For U.S. stocks, the gross profit margins of industries with high import dependence are under pressure, and the strength of pricing power and cost-passing efficiency have become fundamental watersheds. Pre-market evaluations mostly focus on retail, durable goods and multinational supply chain companies 'responses to rising costs, including cost reductions, price adjustments and product portfolio adjustments.

Financial stocks and the automobile supply chain are on the radar before the market, and asset quality and cash flow are the most concerned

On individual stocks, asset quality indicators of the financial system such as over-lending ratios, allowance coverage ratios and bad write-off rhythm have been amplified and examined. The description of credit standards and risk weights in banking laws or financial surveys will affect peer evaluation. The automobile supply chain is under pressure from passivating demand and tightening credit conditions, and pre-market fluctuations may be amplified with those with higher exposure to automobile loans, subprime or leasing. Investors simultaneously pay attention to rating agencies and sellers to study the ratings and target price updates on financial and durable goods.

Futures index fluctuates and consolidates, pre-market volume can wait and see and the risk of volatility increases

Dow Jones Futures, S & P 500 Futures and Nasdaq 100 Futures were in a seesaw before the market. The market was mainly event-driven and responded quickly to news. As credit uncertainty rises, volume and energy may focus on financial and debt-sensitive groups. Defensive stocks and high-dividend targets are relatively attracting attention, but immediate hedging across assets also amplifies intraday volatility. Liquidity conditions and quotation depth have become the technical focus before the opening.

Risk management returns to basics, focusing on immediate changes in credit spreads and policy signals

Overall, bad debt signals have caused the market to reassess economic resilience and policy paths, and pre-market pricing is based on defense and stock selection. The focus of observation includes subsequent disclosures of bank asset quality, credit spreads and high-yield bond trends, immediate signals of inflation and demand, and the guidance of policymakers 'conversations on the interest rate curve. The current main narrative still puts credit risk first, and the financial constitution and cash flow robustness will determine the resilience and valuation elasticity of different stocks.