Morning News

Source: Wall Street News

Market Overview

One day before the release of U.S. CPI data, the upward momentum of U.S. stocks paused. The Nasdaq pulled back from its record high, ending a three-day winning streak, while the S&P and Dow also retreated. Tesla rose nearly 3%, being the only gainer among the "Magnificent Seven" tech giants; Micron surged over 4%, and Intel climbed more than 3%; C3.ai plummeted over 25% after releasing preliminary earnings; lithium miners saw sharp gains, with Sigma Lithium jumping 22%.

The U.S. dollar index rebounded to a one-week high. Bitcoin broke through the 122,000 mark, approaching its intraday record high, but then pulled back by more than 3,000 dollars at one point.

After hitting a new intraday all-time high last Friday, gold futures once fell nearly 3%. Crude oil turned higher after dropping more than 1% intraday, with U.S. oil moving away from a two-month closing low.

During the Asian session, the Shanghai Composite Index hit another annual high, lithium battery stocks surged collectively, lithium carbonate futures hit the daily limit, national bonds fell sharply, Hong Kong stocks consolidated, and Laopu Gold (Lao Pu Huang Jin) dropped more than 5%.

Headlines

Ministry of Foreign Affairs responds to reports that China hopes the U.S. will ease export controls on high-bandwidth memory chips: China opposes the politicization, instrumentalization, and weaponization of technological and economic and trade issues.

Report: Nvidia and AMD hand over 15% of their AI chip revenue in China in exchange for Trump's "approval"; Nvidia responds: It complies with the rules formulated by the U.S. government for participating in the global market.

Trump: Gold will not be subject to tariff hikes.

Bessent: "Most" U.S. trade negotiations will be completed by October.

Report: The Trump administration expands the scope of candidates for Federal Reserve Chair, with Bowman, Jefferson, and Logan included.

Trump "cools down" the "Putin-Trump meeting" this Friday: It is a "tentative meeting" and may be withdrawn directly, and whether an agreement can be reached is not up to him.

Trump declares a public safety emergency in Washington, D.C.

Sentiment in the crypto market is high, with CoinDesk's parent company raising its IPO price, increasing the fundraising amount by nearly 60%.

Improved DRAM prices drive profit growth; Micron raises its Q4 earnings forecast across the board, with its stock price rising over 4%.

Zhipu's new generation visual reasoning model GLM-4.5V is launched and open-sourced, claiming to be "the most powerful 100B-level model in the world".

Market Closing Quotes

U.S. and European Stocks: The S&P 500 Index closed down 0.25% at 6,373.45 points. The Dow Jones Industrial Average closed down 0.45% at 43,975.09 points. The Nasdaq Composite closed down 0.30% at 21,385.40 points. The European STOXX 600 Index closed down 0.06% at 546.76 points.

A-shares: The Shanghai Composite Index rose 0.34% to 3,647.55 points; the Shenzhen Component Index rose 1.46% to 11,291.43 points; the ChiNext Index rose 1.96% to 2,379.82 points.

Bond Market: By the end of the bond market session, the yield on the U.S. 10-year benchmark Treasury note was about 4.28%, roughly flat from last Friday; the yield on the 2-year U.S. Treasury note was about 3.77%, rising nearly 1 basis point intraday.

Commodities: WTI crude oil futures for September closed up 0.12% at $63.96 per barrel. Brent crude oil futures for October closed up 0.06% at $66.63 per barrel. COMEX gold futures for December closed down 2.48% at $3,404.7 per ounce. COMEX copper futures for September closed down 0.7% at $4.44 per pound.

Details of Headlines

Global Highlights

Foreign Ministry responds to reports that China hopes the U.S. will ease export controls on high-bandwidth memory chips: China opposes the politicization, instrumentalization, and weaponization of technological, economic, and trade issues.

Foreign Ministry Spokesperson Lin Jian answered reporters' questions. A Reuters reporter asked, according to reports, sources said that recently Chinese officials told U.S. experts that they hope the U.S. will ease export controls on high-bandwidth memory chips to China. The report stated that such chips can be used in the development of artificial intelligence technology, and China is worried that U.S. controls may hinder Chinese companies such as Huawei from independently developing artificial intelligence chips, and China has included this request as part of the bilateral trade agreement. Can China confirm this? What is your comment?

Lin Jian said that it is recommended to refer specific questions to the competent Chinese authorities. China's position of opposing the politicization, instrumentalization, and weaponization of technological, economic, and trade issues, as well as opposing malicious blocking and suppression of China, is consistent and clear. Such practices disrupt the stability of global industrial and supply chains and are not in the interests of any party.

Has China received the U.S. final decision on extending the tariff suspension period? Foreign Ministry responds. Foreign Ministry Spokesperson Lin Jian said that specific questions should be referred to the competent Chinese authorities. It is hoped that the U.S. will work with China to implement the important consensus reached in the phone call between the two heads of state, give full play to the role of the China-U.S. economic and trade consultation mechanism, and strive for positive results on the basis of equality, respect, and mutual benefit.

Report: Nvidia and AMD hand over 15% of their Chinese AI chip revenue in exchange for Trump's "approval". It is said that in exchange for export licenses to China, Nvidia and AMD have agreed to hand over 15% of their sales revenue from specific chips in China to the U.S. government. The agreement involves Nvidia's H20 and AMD's MI308 chips, and analysts estimate that Nvidia's H20 sales alone could reach $23 billion in 2025. This method of exchanging revenue sharing for export licenses is unprecedented for U.S. companies.

Foreign Ministry responds to Nvidia and AMD agreeing to hand over 15% of revenue to the U.S. government. Foreign Ministry Spokesperson Lin Jian said that China has repeatedly stated its position on the issue of U.S. chips exported to China.

Nvidia responds: It complies with the rules formulated by the U.S. government for participating in the global market. Nvidia responded that it complies with the rules formulated by the U.S. government for participating in the global market. The demand for accelerated computing is global, and Nvidia will continue to serve as many customers as possible within the scope of the rules.

Trump: Gold will not be subject to tariff hikes. Trump wrote on social media, "Gold will not be taxed!" After Trump's post, the price of gold fluctuated little in the short term, with spot gold maintaining a 1.58% decline; thereafter, spot gold narrowed some of the losses, rebounding from around $3,341 to $3,354.61, still down 1.2% for the day.

Bessent says "most" U.S. trade negotiations will be completed by October. After Trump's new tariff policy took effect, U.S. Treasury Secretary Bessent said that negotiations with countries that have not yet reached trade agreements will be largely completed by the end of October, and Canada, Mexico, Switzerland, etc. are still seeking more favorable terms with the U.S.

Report: The Trump administration expands the scope of candidates for Federal Reserve Chair, with Bowman, Jefferson, and Logan included. The Trump administration is considering including Federal Reserve Governor Bowman, Federal Reserve Vice Chair Jefferson, and Dallas Fed President Logan in the list of candidates. Last week, media reports said that the new list of candidates also includes former St. Louis Fed President Bullard and Marc Sumerlin, who served as an economic adviser during former President George W. Bush's tenure.

Bessent publicly states the selection criteria for the "next Federal Reserve Chair": reducing functions, "looking forward" rather than relying on "historical data". Bessent believes that first, the new Federal Reserve Chair should be someone "able to review the entire organization" and can redefine the functional boundaries of the Federal Reserve to maintain its independence; second, the new Chair needs to have the ability to "be very adaptable to forward-looking thinking", and formulate policies more based on predictions of economic prospects rather than simply "relying on historical data".

Trump "cools down" this Friday's "Putin-Trump meeting": it is a "tentative meeting" and may be withdrawn directly. Trump said he hopes to have a constructive dialogue with Putin, and whether an agreement can be reached is not up to him. He threatened to abandon the talks if he feels no agreement can be reached, saying he will now check the specific parameters, "I might leave, say 'good luck to you', and then it's over." He hinted that he does not plan to invite Zelensky to participate in the "Putin-Trump meeting", saying that the next step after the meeting is a direct meeting between Putin and Zelensky, and if necessary, he will mediate that dialogue; he reiterated that the peace agreement will include territorial swaps. European leaders plan to meet with Trump to coordinate before the "Putin-Trump meeting".

Trump declares a public safety emergency in Washington, D.C., and the S&P 500 turns down intraday. Trump said that the Washington, D.C. police department will be placed under direct federal jurisdiction, and National Guard soldiers will be deployed that day to help rebuild law, order, and public safety in Washington, D.C. Trump declared a public safety emergency in Washington, D.C., and will also pay attention to the security situation in New York and Chicago. It is generally believed that the direct "trigger" for Trump's latest decision is that a young staff member of the Department of Government Efficiency was recently attacked by a group of teenagers in Washington.

"Famous contrarian indicator" Bank of America survey: institutions are more optimistic about the economy and AI, more optimistic about China, and holdings of cryptocurrencies and gold are very low. Bank of America's August FMS survey shows that investor sentiment has risen to a 6-month high, with more than half of respondents believing that AI "has already begun" to improve productivity, and "long Mag 7" has once again become the "most crowded trade" this month; a net 11% of respondents expect China's economy to strengthen, the highest level since March, while 91% of respondents believe that U.S. stocks are overvalued, reaching a record high; only 9% of respondents hold cryptocurrencies, and the average allocation ratio of gold investors is 4.1%.

As U.S. stocks hit new highs: retail buying tide ebbs, hedge funds short at the fastest pace in four months. According to Goldman Sachs Prime Brokerage data, hedge funds' net selling reached $1 billion last week, of which more than 90% was concentrated in macro products (indices and ETFs), and short positions in U.S.-listed ETFs increased by 4%, with a monthly increase of 5.7%. Tech stocks have become the main target of hedge fund shorting, with the information technology sector being net sold for the third consecutive week, and the selling speed is the fastest in more than four months, with the ratio of shorting to long selling reaching 3.9 to 1. Meanwhile, retail investors net bought $4.9 billion last week, lower than the average weekly level of $6.6 billion this year.

Driven by both ETFs and corporate treasuries, Ethereum leads the surge in cryptocurrencies. Ethereum is increasingly becoming a favorite of institutional investors and corporate finance departments, and its strong demand has driven the overall rebound of the cryptocurrency market and begun to challenge Bitcoin's long-standing dominance. Ethereum spot ETFs listed in the U.S. this year have attracted more than $6.7 billion in inflows. Currently, Ethereum has broken through $4,300, hitting a new high in more than three years, with a cumulative increase of over 20% in the past 7 days.

Sentiment in the crypto market is high, with CoinDesk's parent company raising its IPO price, increasing the fundraising amount by nearly 60%. Digital asset trading platform Bullish raised its IPO offering price, with the price range上调 from $28-$31 to $32-$33. The IPO is led by JPMorgan Chase, Jefferies, and Citigroup. Bullish's subsidiary CoinDesk is the world's second-largest crypto media, with an average of 4.9 million monthly unique visitors in 2024.

Zhipu's new generation visual reasoning model GLM-4.5V is launched and open-sourced, claiming to be "the most powerful 100B-level model in the world". GLM-4.5V has a total of 10.6B parameters and 1.2B activated parameters, achieving SOTA performance among open-source models of the same level in 41 public visual multimodal lists. It adds a "thinking mode" switch and synchronously open-sources the desktop assistant application. The API call price is as low as 2 yuan/M tokens for input and 6 yuan/M tokens for output. The response speed is 60-80 tokens/s.

Improved DRAM prices drive profit growth; Micron raises its Q4 earnings forecast across the board, with its stock price rising over 4%. Micron Technology significantly raised its Q4 2025 fiscal year earnings guidance, with revenue expected to be $11.1-$11.3 billion, and gross margin guidance raised to 44%-45% from the previous 41%-43%. In addition, Micron Technology also expects adjusted earnings per share of $2.78-$2.92 in the fourth quarter.

Domestic Macro

The Implementation Regulations of the Value-Added Tax Law are open to public comments. What are the highlights? According to Xinhua News Agency, Yang Xiaoqiang, a professor at the Law School of Sun Yat-sen University, said that the draft for comments adheres to the principle of tax legality and embodies the concept of high-quality development. "For example, it refines the standards for preferential tax policies supporting agriculture, education, medical care, elderly care, etc. in Chapter IV of the Value-Added Tax Law, and stipulates that the scope, standards, conditions, and tax collection and management measures of preferential tax policies should be publicly disclosed in a timely manner in accordance with the law, which is conducive to supporting high-quality economic and social development and protecting the legitimate rights and interests of taxpayers."

Zheshang Securities: The first "systematic slow bull market" in A-share history. Zheshang Securities believes that at the macro level, the improvement of risk appetite and the decline in risk-free interest rates have driven A-shares out of a "systematic bull market"; China's rise and China's advantages have formed a "slow" bull market pattern. At the same time, from the technical and quantitative dimensions, the RMB against the U.S. dollar has entered a stable appreciation rhythm, and the better-than-expected performance of the Shanghai Index has raised the market center, spawning a "systematic" bull market. The index's "rolling peak" chip structure and differentiated sector rhythms indicate the formation of a "slow" bull market pattern.

The balance of margin trading and securities lending exceeds 2 trillion yuan again after ten years. CICC: This year's A-shares will be stronger than in 2013. China International Capital Corporation believes that the current market structure is similar to 2013, but with more active policies and loose liquidity support, the overall performance is expected to be significantly better than 2013. The main driving factors include: residents' savings balance exceeding 162 trillion yuan, and the willingness to enter the market increasing in the environment of "asset shortage"; public fund A-share positions have dropped to a nearly ten-year low, with room for improvement; the reconstruction of the global monetary system may promote foreign capital to increase allocation of RMB assets.

Domestic Companies

CATL's mining area suspension "adds fuel" to lithium prices; there is also a 10,000-ton-level salt lake lithium extraction enterprise going through the mine license renewal process.

CATL's mining operation at the Jianxiawo mining area in Jiangxi has been confirmed to be suspended, triggering a surge in the lithium sector. This mining area is a major producer of lithium mica with a large supply. CATL said it is applying for the renewal of the mining license, and the impact on the company's overall operations is not significant. It is more difficult to release lithium ore supply, and the industry's marginal cost has increased. At the same time, there is a 10,000-ton-level salt lake lithium extraction enterprise going through the mine license renewal process. Analysts believe that the immediate impact of the suspension on actual supply is limited, but the medium-term supply and demand may tighten, and the reserve verification deadline on September 30 may become a key time node.

CATL's Yichun lithium mica mine was suspended on time, and some people stayed up late to wait on the mountain. The production capacity of this mining area reaches 30 million tons/year, which can produce 200,000 tons/year of lithium carbonate, making it one of the largest lithium mica mines in Yichun. Although CATL was optimistic about the renewal and had submitted application materials, it has not yet been approved. Yichun City requires 8 lithium-related mining enterprises to complete the reserve verification report by the end of September, and the fate of other mining enterprises has attracted attention.

Is lithium carbonate ushering in a reversal? A brokerage researcher said that the three smelters supporting this mine have a total capacity of 100,000 tons of LCE. If the suspension actually occurs, it will affect the monthly supply by about 8,000 tons of LCE, accounting for about 8% of China's monthly lithium carbonate supply. The impact is significant and strongly supports short-term prices.

Overseas Macro

When will the AI bubble burst? BofA Hartnett suggests keeping an eye on this key indicator. Bank of America strategists warned: The real litmus test for the bursting of the AI bubble is not stock prices, but the credit spreads of technology companies. Once the spreads widen, it indicates that the cash consumption from huge investments is unsustainable, and the collapse alarm will sound. While warning about U.S. risks, he turned his attention to the undervalued market ignored by the market - the Chinese market, which has become his favored investment target.

Betting on economic slowdown, investors are heavily shorting U.S. corporate bonds. Although global stock markets are booming, some savvy investors have turned their attention to a potential "minefield" - the corporate bond market. They believe that the current pricing of corporate bonds is seriously out of touch with the reality of economic slowdown, and are betting on an upcoming market correction by withdrawing funds or directly shorting, which may eventually spread to the surging stock market.

U.S. stock companies are repurchasing stocks at a record pace! U.S. stock companies have announced $983.6 billion in stock repurchase plans so far this year, the best start since records began in 1982, and total repurchases for the year are expected to exceed $1.1 trillion. Among them, the top 20 companies account for nearly half of the total repurchases, mainly large technology companies and banks.

On the eve of the CPI report, Wall Street turns to "stagflation trades" for defense. Tariff shocks have heightened stagflation concerns, analysts warn that the inflation cycle may be longer, and strategists recommend that investors shift to defensive sectors such as utilities, communication services, and consumer staples, while avoiding growth sectors such as discretionary consumption.

The market is "too certain" about the Federal Reserve's September rate cut. Morgan Stanley: Future data is important, especially U.S. CPI. Morgan Stanley believes that historical experience shows that the full impact of tariff transmission still requires a lag period of 3 to 5 months, so the upcoming series of economic data will be crucial for the decision at the September meeting. Among them, the July CPI released this Tuesday will clearly reveal the start of tariff-driven inflation, and core CPI is expected to accelerate from 0.23% to 0.32% year-on-year.

"Human-machine duel" on Wall Street: human traders are "cautiously pessimistic", quantitative funds "step on the gas". A rare "human-machine" opinion confrontation is unfolding on Wall Street, with algorithm-driven quantitative funds' bullish sentiment reaching the highest since early 2020, while human subjective traders have reduced their stock exposure to "moderate underweight" due to concerns about fundamentals. Deutsche Bank strategists believe that such significant differences usually only last for a few weeks. If weak economic data triggers a sell-off, it may force quantitative funds to unwind their crowded long positions due to rising volatility.

Goldman Sachs calculates the cost of U.S. tariffs: as of June, "U.S. companies bear 64%, consumers 22%, exporters 14%", and by October, "consumers will bear 67%". Goldman Sachs believes that U.S. companies absorbed most of the impact in the early stages of the tariff policy implementation, but as the cost transmission effect becomes apparent, by October, the burden on companies will drop to less than 10%, and the share borne by U.S. consumers will soar to 67%. This shift is expected to push up inflation, with core PCE inflation possibly reaching 3.2% by the end of the year.

Overseas Companies

Apple plans a major overhaul for the iPhone to be launched next spring, featuring "AI voice control"! Reports indicate that the AI voice control system aims to turn Siri into a "hands-free" controller for the iPhone, enabling a truly touch-free operation experience. This function serves as a key technical foundation for Apple's next-generation hardware development, particularly for the company's upcoming home devices — smart displays and desktop robot products scheduled for release next year.

Shares of AI software darling C3.ai plummeted 31% at one point, with concerns sparked by the CEO's health issues and disastrous earnings. Enterprise-level AI firm C3.ai previously announced that its results fell far short of expectations and that it would restructure its global sales and service teams. Its stock price dropped as much as 31% in early trading on Monday, bringing the year-to-date decline to 53%. The company expects revenue for the first quarter of fiscal 2026 to fall approximately 20% year-over-year and about 33% below previous guidance, with operating losses set to widen significantly. CEO Siebel, who suffers from severe vision impairment due to an autoimmune disease and has been absent from sales work, is regarded as a major factor behind the poor performance.

Amid the AI boom, a "former OpenAI employee" with "no investment experience" successfully raised $1.5 billion. A 23-year-old with no professional investment experience, leveraging his AI background and former role at OpenAI, not only quickly raised over $1.5 billion for his hedge fund but also achieved an astonishing 47% return that far outperformed the market in just six months. He confidently stated, "I understand AI better than fund managers in New York." This investment fever is not an isolated case; institutions including Point72 have also established AI-themed funds.

Competing for user entry points in the AI era, Google and Microsoft engage in a "browser war". Reports suggest that Google is funding a "Browser Choice Alliance" to prevent Microsoft from leveraging its Windows operating system advantage to promote the AI-enhanced Edge browser. Microsoft recently announced a major AI upgrade for the Edge browser, embedding the CoPilot assistant, which can control user tabs to perform tasks such as making reservations.

Industries/Concepts

1. CoWoS Packaging: Guosheng Securities' research report points out that the booming AI sector is driving demand for chips. Currently, mainstream AI chips all adopt CoWoS packaging, and CoWoS production capacity is in short supply. According to TSMC, it is building multiple backend facilities to expand CoWoS capacity in an effort to fill the supply-demand gap.

2. Robotics: As a core supplier of motors for Tesla, Nidec possesses integrated technology and mass production capabilities for robotic rotating joints, combining "motors + reducers + sensors + machine tools". Nidec is currently building factories in China and tends to source locally. With the surge in humanoid robot production, reducer capacity will be insufficient to meet demand, driving OEM needs for domestic reducer enterprises.

3. Sanitation Equipment: Changjiang Securities' research report indicates that sales of sanitation equipment grew 6.7% year-over-year in the first half of 2025, while new energy sanitation equipment surged 95.9% year-over-year. The large-scale deployment of unmanned sanitation equipment has driven explosive growth in market demand. If sanitation service companies are required to make supplementary social security payments in the future, it may increase their operating costs, further promoting the adoption of unmanned sanitation equipment.

4. Nitrile Gloves: Huachuang Securities notes that nitrile glove prices are expected to rebound in the second half of 2025, with an inflection point approaching. Chinese enterprises have surpassed leading Malaysian nitrile glove companies in terms of production capacity, costs, and cash reserves. Currently, the valuations of relevant Chinese enterprises are at historical lows, and considering the upcoming industry inflection point, attention can be paid to related investment opportunities.

Today's News Preview

U.S. July CPI.

U.S. July government budget.

Speeches by Richmond Fed President Barkin and Kansas City Fed President Schmid.

Australia announces policy interest rate.

OPEC releases monthly oil market report.

EIA releases monthly short-term energy outlook report.

Kweichow Moutai, CoreWeave, and Circle release earnings reports.

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