Morning News

Source: Wall Street Journal

Market Overview

- High - level China - US economic and trade talks are set to take place. The Federal Reserve kept interest rates on hold as expected, and Powell reiterated that there is no rush to cut rates. Near the end of the US stock market trading session, news broke that the Trump administration plans to revoke the new AI chip restrictions imposed during the Biden era, which boosted US stocks.

- US stocks ended their two - day losing streak, and the S&P 500 index closed higher amid volatility. The chip index rallied in the late trading session, with Nvidia rising more than 3%. Apple plans to revamp Safari and focus on AI - powered search, causing Google's stock price to drop more than 9% at one point. The China stock index weakened. After the after - hours financial reports were released, Arm's stock price plunged more than 11%, and Applovin's stock price soared 16% at one point.

- With the Federal Reserve keeping interest rates unchanged, US bonds rose across the board. The US dollar index increased significantly, approaching the 100 - integer mark. Bitcoin rose more than $3,000 intraday, approaching $98,000, and then traded sideways.

- Spot gold prices fell 1.91%, and futures gold prices dropped below $3,400. Crude oil prices rose intraday and then declined, falling more than 3% from the daily high, and US oil prices returned below $59.

- During the Asian trading session, A - shares rose and then fell. The Shanghai Composite Index rose 0.8%, with military - related stocks surging collectively. The Hang Seng Tech Index closed down 0.75%, with pharmaceutical stocks tumbling, and treasury bonds declined across the board.

**Key News**

- The Federal Reserve paused rate cuts again, warning of the risk of stagflation and reiterating the increased "uncertainty". Powell ignored Trump and reiterated that there is no hurry to cut rates, saying that the economy is still doing well and the uncertainty is extremely high, and refused to take pre - emptive action due to tariffs.

- Chip stocks rallied, and media reports said that Trump plans to repeal the AI chip restrictions imposed during the Biden era.

- The Chinese Foreign Ministry responded to the high - level China - US economic and trade talks, saying that this meeting was held at the request of the US side.

- The State Council Information Office's "package of financial policies" released important signals. Pan Gongsheng, the governor of the People's Bank of China, simultaneously announced a reserve - requirement ratio cut and an interest - rate cut. The major reform plan for the public - offering industry was implemented, tying the interests of investors, linking the compensation of fund managers to returns, and reducing fees.

- China's foreign - exchange reserves increased by 1.27% month - on - month in April, and the central bank has been increasing its gold holdings for six consecutive months.

- If the negotiations with the US fail, the EU is prepared to take countermeasures and impose tariffs on Boeing aircraft.

- Apple is planning a major overhaul of Safari, aiming at AI - powered search. Google's stock price once dropped more than 9%, and its position faces a severe challenge.

- Novo Nordisk's Q1 sales increased 19% year - on - year, falling short of expectations, and the company lowered its full - year sales guidance.

**Market Closing Reports**

- European and US stock markets: The Dow Jones Industrial Average rose 0.7%, the S&P 500 index rose 0.43%, and the Nasdaq Composite Index rose 0.27%. The European STOXX 600 index closed down 0.54%.

- A - shares: The Shanghai Composite Index rose 0.8%, the Shenzhen Component Index rose 0.22%, and the ChiNext Index rose 0.51%.

- Bond market: The yield on the 10 - year US Treasury bond fell 2.52 basis points to 4.2694%. The yield on the two - year US Treasury bond fell 0.62 basis points to 3.7765%.

- Commodities: WTI June crude oil futures closed down 1.72% at $58.07 per barrel. Brent July crude oil futures closed down 1.66% at $61.12 per barrel. COMEX gold futures closed down 1.35% at $3,376.50 per ounce.

**Details of Key News**

**Global Highlights**

- The Federal Reserve paused rate cuts again, warning of the risk of stagflation and reiterating the increased "uncertainty". Powell ignored Trump and reiterated that there is no hurry to cut rates, saying that the economy is still doing well and the uncertainty is extremely high, and refused to take pre - emptive action due to tariffs.

- The Federal Reserve's statement said that the uncertainty of the economic outlook has "further" increased, and a new statement was added that "the risks of rising unemployment and inflation have increased". It reiterated that the recent indicators show that the economic activity is still expanding robustly, but pointed out that the volatility of net exports has affected the data. Powell said that high tariffs may lead to an increase in inflation and unemployment, and it is too early to judge which risk, inflation or unemployment, is more serious. The current monetary policy is moderately restrictive, and the potential inflation outlook is good, so the decision to wait and see is clear. It is impossible to take pre - emptive action because we don't know how to respond until we see more data. The impact of tariffs has not yet arrived, and the impact of policies on inflation may be short - term or more long - lasting. The Federal Reserve's inflation and employment targets will not make progress in at least the next year. The negotiations may or may not substantially change the trade situation. The US GDP may be revised upward, and the rush to import makes it difficult to accurately interpret the GDP. He will not be affected by Trump's calls at all and has not asked for a meeting with the president. The growth path of the government debt is unsustainable. The "New Fed News Service" said that the Federal Reserve officials are considering whether to focus on the risks of employment or inflation.

- Chip stocks rallied, and media reports said that Trump plans to repeal the AI chip restrictions imposed during the Biden era. Media reports said that as part of the efforts to modify the semiconductor trade restrictions, the Trump government plans to revoke the artificial intelligence (AI) chip restrictions imposed during the Biden administration, and will not implement the so - called "AI diffusion rule" on May 15.

- The Chinese Foreign Ministry responded to the high - level China - US economic and trade talks. The spokesman of the Chinese Foreign Ministry, Lin Jian, said that the US side has continuously expressed its hope to negotiate with China recently. This meeting was held at the request of the US side. China's position of firmly opposing the US's abuse of tariffs has not changed at all. At the same time, we have also said many times that China is open to dialogue, but any dialogue must be based on equality, respect and mutual benefit. Any form of pressure and coercion will not work on China. China will firmly safeguard its legitimate interests and safeguard international fairness and justice.

- The State Council Information Office's "package of financial policies" released important signals.

- At the meeting, Pan Gongsheng, the governor of the People's Bank of China, simultaneously announced a reserve - requirement ratio cut and an interest - rate cut. The reserve - requirement ratio was cut by 0.5 percentage points, the policy interest rate was reduced by 0.1 percentage points, the housing provident fund interest rate was reduced by 0.25 percentage points, the interest rate for the first - home mortgage loans with a term of more than 5 years was reduced from 2.85% to 2.6%, and the interest rates for other terms were adjusted simultaneously. The People's Bank of China will introduce a package of macro - control measures, mainly including three types of policies: quantitative policies, price - type policies and structural policies, with a total of ten specific measures.

- The Financial Regulatory Administration proposed eight measures to fully consolidate the foundation for the economy to pick up and improve. These measures are aimed at the current economic situation and are designed to promote the steady recovery of the economy by optimizing the financing environment, enhancing the vitality of the capital market and strengthening support for key industries.

- The China Securities Regulatory Commission proposed three measures to continuously stabilize and activate the capital market.

- The major reform plan for the public - offering industry was implemented, tying the interests of investors, linking the compensation of fund managers to returns, and reducing fees. The China Securities Regulatory Commission announced the "Action Plan for Promoting the High - Quality Development of Public - Offering Funds". The plan proposed to guide industry institutions to appropriately reduce the management fees and custody fees of large - scale index funds and money - market funds. Promote the reduction of relevant fixed costs such as fund registration and settlement, index licensing, information disclosure, audit and legal services. In the assessment of the company's senior management by the shareholders and the board of directors of the fund company, the weight of the fund investment return index should be no less than 50%. In the assessment of the fund manager, the weight of the fund product performance index should be no less than 80%. For the fund managers whose product performance is more than 10 percentage points lower than the performance comparison benchmark for more than three years, their performance - related pay should be significantly reduced.

- China Taishan Securities believes that this meeting continues the idea of "expectation management" and attaches more importance to the capital market. Minsheng Securities believes that with the emergence of the impact of tariffs, the key factor that can really make the economy and the market stable and long - term is still the coordination of monetary and financial policies and fiscal policies. It is expected that with the successive implementation of the "package of financial policies" in the second quarter, the space for incremental fiscal policies in the third quarter will also be opened up.

- China's foreign - exchange reserves increased by 1.27% month - on - month in April, and the central bank has been increasing its gold holdings for six consecutive months. At the end of April, China's gold reserves were 73.77 million ounces, and the gold reserves at the end of March were 73.70 million ounces, with a month - on - month growth of 0.095%. As of the end of April 2025, China's foreign - exchange reserves were $3,281.7 billion, an increase of $41 billion from the end of March, an increase of 1.27%.

- If the negotiations with the US fail, the EU is prepared to take countermeasures and impose tariffs on Boeing aircraft. It is reported that if the negotiations with the US fail before July 14, the EU plans to include Boeing aircraft in the list of countermeasures against the US. The higher costs have begun to be transmitted to the aviation industry through the supply chain.

- Facing the US tariffs, other countries around the world are accelerating to "unite". Many countries are now adopting a two - pronged strategy. On the one hand, they are trying to reach an agreement with Trump to repeal some tariffs. On the other hand, they are strengthening trade cooperation with other partners to reduce their dependence on the US market. Some analysts said that although the US accounts for 26% of the global economic output, its import share is only 13%, which means that there is still sufficient trade space and cooperation opportunities in other parts of the world.

- The sharp appreciation of the New Taiwan dollar is just a preview, and US - dollar assets are facing a "pressure of $2.5 trillion in selling"? The famous economist Stephen Jen warned that Asian exporters and investors may have accumulated "extremely large" US - dollar reserves over the years. With the intensification of the trade war dominated by the US, some Asian investors may remit a large amount of funds back, which may lead to a large - scale outflow of funds from the US dollar.

- Apple is planning a major overhaul of Safari, aiming at AI - powered search. Google's stock price once dropped more than 9%, and its position faces a severe challenge. The era of Google - dominated search may be coming to an end. The application of Apple's browser search declined for the first time in April. Apple is "actively considering" a major overhaul of the Safari browser on its devices, with a focus on AI - powered search engines. This decision may end the long - standing cooperation between Apple and Google, triggering a major transformation in the entire industry and posing a challenge to Google's dominant position in the search field.

- Arm's profit and revenue exceeded expectations, but the guidance was disappointing, and its stock price plunged more than 11% after hours. The chip - design giant Arm announced its financial report, with both profit and revenue exceeding expectations, but the guidance was flat. It is expected that the revenue in the first fiscal quarter will be $1 - 1.1 billion, while the analyst's expectation is at the high end of the $1.1 - billion range. Arm's expectations are in line with those of its peers in the chip industry. These companies have previously told investors that the start of 2025 is strong, but the economic environment makes the forecast more uncertain.

- Novo Nordisk's Q1 sales increased 19% year - on - year, falling short of expectations, and the company lowered its full - year sales guidance. Novo Nordisk's first - quarter sales were 78.1 billion Danish kroner, falling short of the expected 78.7 billion Danish kroner, and the sales of its flagship weight - loss drug Wegovy also fell short of expectations. Due to the lower - than - expected market penetration brought by the "supplement industry" in the US, the annual growth guidance was lowered by 3 percentage points from the original 16% - 24% to 13% - 21%.

**Domestic Macroeconomy**

- Xi Jinping published a signed article in the Russian media. The article said that both China and Russia are major countries with important influence and are constructive forces in maintaining global strategic stability and improving global governance. The China - Russia relationship has a clear historical logic, strong internal driving force and profound cultural heritage. It is not directed against any third party and is not subject to any third party. The two sides should jointly resist any attempt to interfere with and undermine China - Russia friendship and mutual trust, not be confused by temporary events, and not be disturbed by high winds and rough waves. With the certainty and tenacity of China - Russia strategic cooperation, they should jointly promote the process of world multi - polarization and jointly promote the building of a community with a shared future for mankind.

- Comprehensive lifting of exchange restrictions: Breaking through in exports to Europe. GF Securities believes that the improvement of China - EU relations is essentially the inevitable result of the spillover of the structural contradictions between Europe and the US. From the two dimensions of the export exposure to Europe and the market share in Europe, the process of China's various industries' exports to Europe can be roughly positioned. The first - gear existing market: power batteries, inverters, wind - power components, etc. The second - gear to - be - improved: new - energy passenger vehicles, electric forklifts. The third - gear potential areas: motorcycles, communication equipment, etc. are expected to reopen the European market.

**Domestic Companies**

- Tesla's sales in China fell 6% year - on - year in April, the seventh consecutive month of decline. In April 2025, Tesla's wholesale sales in China were 58,459 units, a 6% decrease compared with the same period in 2024. Tesla also suffered setbacks in the European market, with double - digit declines in the six major markets.

- The identity of the mysterious seller of Pop Mart was revealed, and the company's director Tu Zheng emptied all his shares. Fengqiao Capital responded to the liquidation of the founding shareholders of Pop Mart, saying that due to the upcoming expiration of its first - phase RMB fund, it has emptied all Pop Mart shares through block trades in three times. At the same time, the identity of Tu Zheng, a director of Pop Mart, was revealed. He sold all his shares through block trades, and his shareholding was reduced to 0% from the original 0.89%.

- Are JD.com and Meituan really engaged in a food - delivery war? Yes and no. Bernstein believes that the competition between JD.com and Meituan in the food - delivery field is a new round of strategic layout around "instant retail" by both sides. JD.com's entry is more of a response to the growth of Meituan's instant - retail business, while Meituan is defending with its advantages in the long - tail food - service market.

Overseas Macroeconomy

The largest stock buyback wave in the history of U.S. stocks has arrived. In the face of uncertainty, enterprises have chosen to "bottom-fish" themselves. According to data from Deutsche Bank, companies in the S&P 500 index are expected to repurchase stocks worth $192 billion in the coming months, setting the highest record for a single week since 1995. Under the shadow of uncertain factors such as trade tariffs, enterprises are more inclined to deploy their huge cash reserves through share buybacks.

How to view the big rebound in U.S. stocks? Goldman Sachs: In a bear market, there are often long bullish candlesticks, and from the current valuation perspective, the upside space is limited. Many investors were forced to sell risky assets in early April, and now they are forced to "reluctantly buy back" during the stock market rebound. Goldman Sachs said that the biggest driving force in the current market is still uncertainty, and investors have not really taken a bullish or bearish stance on the market. Since 1980, the average increase in bear market rebounds has been 14%, and this rebound has increased by 18%, which may be close to the limit.

How big is the impact of tariffs? Wall Street is closely watching port, truck, and supply chain data. When the economic outlook is unclear, traders usually pay attention to shipping and logistics data, and transportation stocks are often regarded as the "barometer" of the market. The import volume of the Port of Los Angeles this week is expected to decrease by 35% compared with the same period last year; trucking companies are reducing orders for heavy-duty trucks, and the cancellation rate of North American heavy-duty truck orders in March has reached a new high in nearly two years.

Harvard and Yale took the lead, and American university endowment funds are competing to flee private equity funds. Following Harvard and Yale, the Princeton University endowment fund has been studying the feasibility of potential sales of private equity shares in recent weeks. The Texas Tech University endowment fund plans to reduce its exposure to private equity. Gaurav Patankar, Chief Investment Officer of the endowment funds and foundations at Highland Consulting, said: "This is a bit like planning an escape in a cinema for a fire that is unlikely to occur, and everyone wants to be the first to flee."

Overseas Companies

OpenAI: Microsoft should take less revenue share. Microsoft: Give me more technology. OpenAI plans to significantly cut the revenue share given to Microsoft, from the current 20% to 10% in 2030. Microsoft hopes to continue to use the intellectual property of OpenAI after its restructuring, and the two sides are also negotiating on aspects such as the Azure cloud server agreement. Analysts pointed out that an outstanding issue at present is whether the current agreement covers products that OpenAI has not yet released or products that have not yet generated revenue.

Disney's stock price rose by more than 10%. Its theme park and streaming media businesses are strong. Its Q2 performance exceeded expectations, and it significantly raised its annual profit guidance. Disney expects its adjusted earnings per share for the whole year to increase by 16% to $5.75, higher than the market expectation of $5.44, approximately twice the previously expected growth. In addition, Disney expects the park business to perform even more strongly in the second half of the year and will continue to improve the profitability of its streaming media business.

BMW's EBIT in Q1 plummeted by 23% year-on-year, but it maintained its profit guidance and said that some auto tariffs will be temporary.

Driven by the strong gold price, Barrick Gold's net profit in Q1 increased by 81.08% year-on-year.

Industry/Concepts

1. Military Industry: Huatai Securities pointed out that the fundamental situation of the industry in Q1 of 2025 may already be in a recovery trend. In terms of military trade, the current international situation is still complex and changeable. Since 2025, many countries have increased their defense budgets, and global military expenditure has increased significantly. The defense pressure of various countries has increased, promoting the military trade market to enter a more active state. Domestically, as 2025 is the final year of the "14th Five-Year Plan", the established national defense construction tasks need to be completed, and the previously backlogged demand will be quickly released.

2. Domestic Computing Power: From 2024 to 2028, the investment scale of China's intelligent computing center market is expected to grow significantly. The computing power scale of intelligent computing centers built by Internet and cloud vendors accounts for 35%. Under the export restrictions of H20, there is a broad space for domestic chips, and the Ascend industrial chain will benefit significantly.

3. Metal Materials: According to a research report by GF Securities, AI has gradually been integrated into the material research and development system. Through intelligent algorithms, it breaks through the limitations of the traditional trial-and-error model and improves the efficiency of component design, microstructure optimization, and manufacturing process improvement. At the same time, open-source material large models such as OMat24 are accelerating the empowerment of AI in material discovery.

4. Intelligent Driving: According to a research report by GF Securities, BYD has pressed the acceleration button for the downward penetration of intelligent driving, and various automakers are actively following up. Intelligent driving is penetrating into the volume area of mid- and low-end models. The growth space for intelligent hardware is broad, and the domestic supply chain is expected to be more deeply involved.

Preview of Today's Major News

The Bank of England announces its interest rate decision.

The Bank of Japan releases the minutes of its March monetary policy meeting.

The number of initial jobless claims in the United States last week.

Shopify releases its financial report.

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