Morning News

**Source**: Wall Street CN

# Market Overview

Driven by the U.S. GDP growth exceeding expectations and the decline in initial jobless claims, the strong economic data has heightened uncertainties surrounding the Federal Reserve's (Fed) future interest rate cut path, leading to a cooling of market expectations for a rate cut in October. The three major U.S. stock indexes posted a three-day losing streak, the longest such streak in a month, with all erasing the gains made following the Fed's September meeting.

Oracle plummeted by over 5%; Tesla dropped more than 4%; OKLO, a leading nuclear energy company, fell 9% after Goldman Sachs released a research report stating that the company was overvalued. In contrast, the Chinese concept stock index bucked the trend and closed higher again.

Yields on U.S. Treasuries across major maturities rose collectively, with the interest rate-sensitive 2-year Treasury yield climbing 4.5 basis points. The U.S. dollar recorded a two-day winning streak, reaching a three-week high, and the USD/JPY exchange rate approached 150.

Bitcoin fell below the $110,000 mark, declining by 3.62%. Ethereum suffered a sharp intraday drop of over 7%, briefly touching $3,823, a seven-week low. Solana slid 7.2% and extended its losing streak to six consecutive days.

Spot gold rebounded by 0.38%. Silver broke through the $45 level, hitting a 14-year high. Crude oil prices first fell and then rose, with U.S. oil climbing nearly 2% from its daily low at one point.

During the Asian trading session, China's ChiNext Index hit a new high in over three years. The total market value of CATL (Contemporary Amperex Technology Co., Ltd.) surpassed that of Kweichow Moutai. Hong Kong's Hang Seng Tech Index rose nearly 1%, while Xiaomi surged by 5% in the afternoon. Treasury bonds showed divergence, and commodities generally rose.

# Key News

The Digital RMB International Operation Center was officially launched, introducing three major platforms: cross-border digital payment, blockchain services, and digital assets.

The U.S. Q2 GDP growth was revised upward to 3.8%, a nearly two-year high, while the PCE Price Index stood at 2.6%. The number of initial jobless claims in the U.S. last week dropped significantly to 218,000, the lowest level since July.

All living former Fed Chairs, along with a number of former Treasury Secretaries and former White House economic advisors, sent a letter to the Supreme Court, urging it not to dismiss Fed Governor Cook.

Fed Governor Milan advocated for 50-basis-point rate cuts each time, aiming to quickly reach the neutral interest rate through "short-term and substantial" rate reductions. Fed Vice Chair for Supervision Bowman stated that the "fragility" of the job market justifies further interest rate cuts. A Fed voting member for next year called for reform of interest rate tools, arguing that it is time for the Fed to prepare a new benchmark.

In a rare historical move, the White House warned that permanent layoffs might occur during a government shutdown, as the budget deadlock escalates further.

It was revealed that the U.S. pressured South Korea to increase its investment commitments by nearly $200 billion, demanding cash instead of loans.

Cryptocurrencies continued to plummet, with Ethereum falling below the $3,900 mark, and long positions suffered large-scale forced liquidations.

Xiaomi's 17-series smartphones were launched with "more features at the same price," starting at 4,499 yuan for the standard model and 4,999 yuan for the 17Pro variant, equipped with the innovative "Miaoxiang Rear Display." In response to claims that "Xiaomi is just an assembler without core technology," Lei Jun (Xiaomi's founder) stated: "Chips are the necessary path to success; we must persist in this endeavor for at least ten years and invest no less than 50 billion yuan. At the age of around 50, it is the perfect time to strive for new goals."

Xiaomi Auto announced its plan to enter the European market by 2027. BYD's sales in Europe in August surged by 200% year-on-year, surpassing Tesla for two consecutive months.

South Korea's top Web2 and Web3 entities announced a merger: "South Korea's Google" (referring to a leading local internet company) will acquire "South Korea's Binance" (a major local cryptocurrency exchange), with plans to launch a Korean won-backed stablecoin and expand its business globally.

# Market Closing Quotes

## U.S. and European Stock Markets

- S&P 500 Index: Closed down 0.50% at 6,604.72 points.

- Dow Jones Industrial Average: Fell 0.38% to 45,947.32 points.

- Nasdaq Composite Index: Dropped 0.50% to 22,384.698 points.

- Euro Stoxx 600 Index: Closed down 0.66% at 550.22 points.

## China A-Shares

- Shanghai Composite Index: Edge down 0.01% to 3,853.30 points.

- Shenzhen Component Index: Rose 0.67% to 13,445.90 points.

- ChiNext Index: Gained 1.58% to 3,235.76 points.

## Bond Market

- U.S. 10-year Treasury Yield: Rose 2.13 basis points to 4.1678%.

- U.S. 2-year Treasury Yield: Climbed 5.73 basis points to 3.6573%.

## Commodities

- WTI Crude Oil Futures (November contract): Closed down 0.02% at $64.98 per barrel.

- Brent Crude Oil Futures (November contract): Closed up 0.16% at $69.42 per barrel.

- COMEX Gold Futures: Rose 0.38% to $3,782.60 per ounce.

# Details of Key News

## Global Highlights

The Digital RMB International Operation Center was officially launched, introducing three major platforms: cross-border digital payment, blockchain services, and digital assets. According to Xinhua News Agency, among them, the Digital RMB Blockchain Service Platform provides standardized cross-chain transaction information transfer and on-chain digital RMB payment services for blockchains in various scenarios and industries; the Digital Asset Platform can offer standard, ready-to-use financial-grade digital asset services, supporting existing financial infrastructure to expand its business onto the chain.

The U.S. Q2 GDP growth was revised upward to 3.8%, a nearly two-year high, with the PCE Price Index at 2.6%. The final value of the U.S. Q2 GDP annualized quarter-on-quarter growth was significantly revised up to 3.8%, higher than the previous revised value of 3.3%, marking the strongest performance since the 4.7% growth recorded in the third quarter of 2023. The upward revision was mainly driven by the unexpectedly strong consumer spending and the decline in imports. However, this strong report also indicated that inflationary pressures are more stubborn than previously assessed.

The number of initial jobless claims in the U.S. last week dropped significantly to 218,000, the lowest level since July.

All living former Federal Reserve (Fed) Chairs, along with a number of former U.S. Treasury Secretaries and former White House economic advisors, sent a letter to the Supreme Court, urging it not to dismiss Fed Governor Lisa Cook!

On Thursday, all living former Fed Chairs, as well as several former U.S. Treasury Secretaries, former White House economic advisors, and economists, urged the U.S. Supreme Court not to allow Trump to dismiss Fed Governor Lisa Cook. In their amicus brief submitted to the U.S. Supreme Court justices on Thursday, they stated that if Trump is allowed to remove Cook while she challenges her dismissal, it will undermine public trust in the Fed and disrupt efforts to stabilize prices, increase employment, and regulate long-term interest rates.

On the same day, Cook's lawyers stated in a new filing to the Supreme Court that even a temporary dismissal of Cook could cause chaos and disruption in the financial markets.

Fed Governor Milan advocated for 50-basis-point interest rate cuts each time, aiming to quickly reach the neutral interest rate through "short-term and substantial" rate reductions. Milan warned that the Fed's current policy interest rate is far higher than the "neutral" level he estimated, remaining in a "highly restrictive" range, and this stance makes the economy more vulnerable to downward shocks. The Fed "can reach the target through a very short round of 50-basis-point rate cuts each time."

Fed Vice Chair for Supervision Bowman: The "fragility" of the job market justifies further interest rate cuts. Bowman stated on Thursday that the inflation rate is sufficiently close to the Fed's target, within the target "range," and the impact of tariffs on price increases may be a one-time event.

A Fed voting member for next year called for reform of interest rate tools: It is time for the Fed to prepare a new benchmark. Logan suggested replacing the current benchmark with the Tri-Party General Collateral Rate (TGCR), which has a daily trading volume of over $1 trillion, far exceeding the market size of less than $100 billion for the current benchmark federal funds rate. She said that changes in the TGCR can be better transmitted to various money markets, and its moderate fluctuations are acceptable; such reforms will not extensively affect monetary policy or interfere with the balance sheet reduction, and the benchmark should be replaced in advance while the market operates smoothly, rather than making adjustments when problems arise in the transmission of money market interest rates.

A rare occurrence in history! The White House warned of potential permanent layoffs during a government shutdown, as the budget deadlock escalates further. The White House has requested federal agencies to prepare for permanent layoffs in the event of a government shutdown, a move that goes far beyond the previous practice of temporary furloughs and aims to put pressure on the Democratic Party. The Democratic Party responded strongly, stating that it will not be "blackmailed" or "intimidated" and questioning the legality of the directive. If the two parties fail to reach an agreement by October 1, some federal employees will face the risk of permanent unemployment.

It was revealed that the U.S. pressured South Korea to increase its investment commitments by nearly $200 billion, demanding cash instead of loans. Media reports stated that U.S. Commerce Secretary Raimondo advised South Korea to add commitments to the $350 billion investment agreement reached in July, bringing the investment scale closer to Japan's $550 billion agreement. Earlier, South Korean media reported that due to differences in the specific plan for South Korea's investment in the U.S., U.S.-South Korea trade negotiations have entered a deadlock. Raimondo stated this month that the South Koreans either accept the agreement or pay tariffs, with no other options.

Cryptocurrencies continued to plummet, with Ethereum falling below the $3,900 mark, and long positions suffering large-scale forced liquidations! The cryptocurrency market suffered a heavy blow. Ethereum plummeted by over 7% intraday to $3,823, a seven-week low; Bitcoin fell below the key support level of $110,000, dropping by 3.62%; Solana declined by 7.2% and extended its losing streak to six consecutive days. Nearly 250,000 people around the world were liquidated, with losses exceeding $1.1 billion, and $1.7 billion worth of long positions were forced to close. The withdrawal of institutional funds has intensified selling pressure. Analysts warned that if Ethereum falls below $3,800, it will trigger a larger-scale liquidation.

Xiaomi 17 series offers "more features at the same price," with the standard model starting at 4,499 yuan and the 17Pro variant starting at 4,999 yuan, equipped with the innovative "Miaoxiang Rear Display." Is Xiaomi just an assembler without core technology? Lei Jun (Xiaomi's founder) responded: "Chips are the necessary path to success; we must persist in this endeavor for at least ten years and invest no less than 50 billion yuan."

The Xiaomi 17 series is the global first to feature the 5th-generation Snapdragon 8 Ultimate Edition, adopting the 3rd-generation 3nm process technology. When talking about the iPhone 17 and Xiaomi 17, Lei Jun stated that the iPhone 17 is also very well-made, and this update is known as a "major upgrade," but there is still a gap between the iPhone 17 and Xiaomi 17 in terms of hardware configuration. At the same time, Xiaomi launched a car customization service, planning to design 100 paint colors within three years.

Lei Jun said that what makes him tired is the abundance of doubts, criticisms, and even attacks online. For example, claims like "Xiaomi is just an assembler with no real technology, only good at marketing, and will not go far."

Lei Jun emphasized, "At the age of around 50, it is the perfect time to strive for new goals."

Xiaomi Auto plans to enter the European market by 2027. Xiaomi Auto is steadily advancing its strategy to enter the European market in 2027. Xu Fei, Vice President of the Group, recently confirmed that the company launched on-the-spot research in June this year to prepare for the establishment of a sales network. Xiaomi plans to first open exhibition halls to allow European consumers to have an immersive experience of its electric vehicles and intelligent ecosystem. Although localized production is not the first step, building factories in Europe is an inevitable plan to achieve the long-term goal of ranking among the top five globally.

BYD's sales in Europe in August surged by 200% year-on-year, surpassing Tesla for two consecutive months! BYD's sales in the EU in August increased by 201.3% year-on-year, surpassing Tesla for the second consecutive month, and its market share also expanded to 1.3%. Tesla's sales during the same period dropped sharply by 36.6%, and its market share fell from 2.0% in the same period last year to 1.2%. To support capacity expansion, BYD plans to build a battery factory in Europe, which is a key step in deepening the localized supply chain following the construction of vehicle factories in Hungary and Turkey.

South Korea's top Web2 and Web3 entities announced a merger: "South Korea's Google" (referring to a leading local internet company) will acquire "South Korea's Binance" (a major local cryptocurrency exchange), with plans to launch a Korean won-backed stablecoin and expand its business globally. This merger will combine South Korea's strongest Web2 and Web3 forces, laying the foundation for its stablecoin project and the global expansion of digital financial business. Naver Finance will launch a stablecoin project supported by the Korean won. If Naver Pay integrates the blockchain wallet "Giwallet" developed by Upbit, it is expected to integrate all financial assets such as stablecoins, tokenized deposits, and tokenized stocks in the future.

## Domestic Macroeconomics

Li Qiang held a discussion with U.S. friendly groups. According to Xinhua News Agency, Li Qiang emphasized that the foundation of China-U.S. relations lies in the people, and the healthy development of bilateral relations requires the joint efforts of the people of both countries. He expressed the hope that people from all walks of life in the U.S. will take more positive actions to enhance mutual understanding between the two countries, expand practical cooperation in various fields, and make greater contributions to promoting the development of both countries and enhancing friendship between the two peoples.

Ministry of Commerce: Announced the launch of a trade and investment barrier investigation into Mexico's relevant China-related restrictive measures. The measures under investigation in this case are: the Mexican government's plan to increase import tariff rates on products from non-free trade partners such as China, specifically involving product categories including automobiles and auto parts, textiles, clothing, plastics, steel, home appliances, aluminum, toys, furniture, footwear, leather goods, paper and paperboard, motorcycles, and glass. In addition, other trade and investment restrictive measures adopted by Mexico in recent years that involve China are also within the scope of this investigation.

1st Anniversary of "September 24th": David Tepper, who advocated "buying all Chinese assets," was proven right. Since "September 24th" one year ago, the total market value of China's A-share market has exceeded 100 trillion yuan for the first time, and more than 3,000 individual stocks have seen their prices rise by over 50%. Goldman Sachs believes that the momentum of China's stock market is very strong, there is still huge room for market capital allocation at present, technical indicators show that the rebound may have just begun, and the foundation for A-shares to form a "slow bull market" is more solid than ever before.

Hang Seng Tech Index is approaching the "longest consecutive rise record in history." The Hang Seng Tech Index is expected to set the longest consecutive rise record since its establishment. Investors' continued enthusiasm for the AI field drove tech stocks to rise further on Thursday, and the index is about to achieve an eighth consecutive week of gains. The government's announcement to increase support for the technology industry has injected new impetus into the market. Alibaba's announcement of increasing AI investment and establishing a new cooperation with NVIDIA has further boosted investor confidence.

How to understand the current revaluation of China's stock market? The research team led by Guo Lei from GF Securities believes that global assets are being re-priced around three main lines: the weakening of U.S. dollar credit, supply chain backup, and the new technological revolution; domestically, China is driven by the release of engineer dividends, the endogenous appreciation of the RMB, and sufficient liquidity. Behind the rise of high-growth narratives is the resonance of risk mitigation, lower capital costs, and industrial transformation.

## Domestic Companies

How much will Alibaba increase its capital expenditure? Morgan Stanley predicts "an annual increase of 3GW," while UBS forecasts "1-2GW," and each 1GW is equivalent to a capital investment of approximately 100 billion yuan. According to Morgan Stanley's calculation, from 2026 to 2032, the annual新增 capacity of Alibaba Cloud will exceed 3 gigawatts, a scale equivalent to Morgan Stanley's predicted新增 capacity of 3-4 gigawatts in the entire Chinese market in 2025. UBS believes that the guidance on the investment intensity and sustainability of Alibaba Cloud "exceeds market expectations." The bank estimates that Alibaba Cloud will expand its data center capacity at a rate of 1-2 gigawatts per year in the future, which may translate into an incremental capital investment of up to 100 billion to 200 billion yuan per year.

"Keling 2.5 Turbo" features high performance and low cost! Goldman Sachs: Kuaishou ranks among the world's top in AI video. Goldman Sachs stated that the "Keling AI 2.5 Turbo" model launched by Kuaishou has achieved a cost reduction of nearly 30% while maintaining top-tier performance, establishing its leading position in the global AI video generation field. This model performed excellently in comparative tests with major competitors, with a user preference rate of up to 69%. It is expected that the annual revenue of Keling AI in the 2025 fiscal year will reach $154 million, higher than the official guidance of $125 million.

CATL's market value surpassed that of Kweichow Moutai, becoming China's third-largest listed company! CATL's stock price hit a record high on Thursday, with its market value reaching 1.83 trillion yuan at one point, exceeding Kweichow Moutai's valuation of 1.8 trillion yuan. Some analysts believe that the prospects for batteries are promising, and some investors may be rotating from electric vehicle stocks to battery stocks, benefiting CATL, the industry leader.

## Overseas Macroeconomics

Citadel Macroeconomic Expert: With the Fed cutting interest rates amid such ample liquidity, "increasing risk appetite" is the only conclusion the market can draw. Nohshad Shah believes that against the backdrop of sound macroeconomic fundamentals, the increased easing of monetary policy is creating a strong tailwind environment for risky assets. As the market becomes more optimistic about future growth prospects, cyclical stocks should continue to outperform defensive stocks, and interest rate-sensitive sectors, especially small-cap stocks and unprofitable tech stocks, will also receive support.

Swiss National Bank (SNB) rejected negative interest rates and suspended interest rate cuts for the first time since the beginning of 2024. Due to low inflationary pressures, the SNB has adopted a wait-and-see attitude, and economists expect the interest rate cut cycle to end. It is worth noting that the Swiss franc has strengthened significantly this year, rising to a ten-year high against the U.S. dollar last week.

How will Milei "save himself"? Wall Street: The Argentine peso needs to be "devalued by 20%, if he dares to do so." The Milei government of Argentina is facing a peso crisis. Wall Street generally believes that the peso is severely overvalued and needs to be devalued by 20% or more to get rid of economic difficulties and meet the requirements of the IMF. However, a significant devaluation before the key election is undoubtedly a political gamble. Although the strong peso has effectively curbed inflation, it is increasingly dragging down the economy, leading to Argentines shopping overseas and importing beef.

The $7 billion target was "achieved quickly," and Argentina resumed the grain export tax. Official information shows that it only took two days for the export declaration volume to reach the upper limit of $7 billion, resulting in the early termination of the agricultural product export tax exemption policy.

A "major accident" at the world's second-largest copper mine led to its shutdown. Wall Street: A black swan event! "Traders buy first and ask questions later." Freeport-McMoRan announced that its Grasberg copper mine in Indonesia has encountered force majeure, leading to the shutdown of this world's second-largest copper mine. Goldman Sachs analysts characterized this incident as a "black swan," expecting a copper supply loss of 500,000 tons within the next 12-15 months, and asserted that "copper prices must rise as a result." Traders responded to this by "buying first and asking questions later."

# Overseas Companies

"Perpetual contracts" are booming in the cryptocurrency circle, offering the possibility of "getting rich overnight or restarting with one click"! The core feature of perpetual contracts is that there is no expiration date or strike price—traders can hold positions indefinitely, similar to an option contract that can be automatically rolled over. This speculative tool is accelerating its entry into the regulated U.S. market. Coinbase, a leading cryptocurrency exchange, launched perpetual contract products for its U.S. retail customers this summer. Meanwhile, Cboe Global Markets also plans to roll out such contracts in November.

Is the "coin-hoarding" model on the verge of collapse? "Digital currency treasury companies" are successively launching share repurchases in an attempt to boost stock prices. Analysts believe that such repurchases indicate the business model of "digital currency treasury companies" may have reached its end, and these repurchases are "a sign of market saturation."

Circle: Exploring "reversible" transactions for stablecoins, aiming to learn lessons from the traditional financial system. Circle, the world's second-largest stablecoin issuer, is exploring the introduction of a "reversible" mechanism that allows refunds in cases of fraud or disputes. It aims to attract banks and institutional clients with higher demands for security and compliance by providing risk control and error-correction functions similar to those in traditional finance. Circle also plans to implement "reverse payments" at the protocol layer through its new blockchain, Arc, to balance the needs of transaction finality and error correction.

Amazon reached a settlement with the FTC, agreeing to pay $2.5 billion to resolve allegations of tricking users into subscribing to Prime. Amazon will pay a $1 billion fine and refund a total of $1.5 billion to approximately 35 million users, with a single refund amounting to $51 per user.

The Trump administration agreed to use the AI models of xAI, owned by Elon Musk. Through a new cooperation, the Trump administration will provide the AI models of xAI (a company under Musk) to federal agencies. This move may boost Musk's AI firm and signals a warming of his relationship with the White House. Under the agreement, federal agencies will be able to access models including Grok 4 and a new fast version named Grok 4 Fast at a symbolic fee of 42 cents.

Meta launched the Vibes platform to enter the AI video market. Meta announced that it will integrate Vibes, an AI video creation platform, into the Meta AI app, allowing users to create, discover, and share short video content. Presented in the form of a feed, this feature enables users not only to browse AI-generated videos created by other creators and communities but also to turn their own ideas into reality using brand-new AI visual tools or rework existing videos.

"Etching coolant channels into chips"! What does Microsoft's new technology mean? Microsoft unveiled an entirely new cooling technology that etches tiny channels inside chips to allow coolant to directly draw away heat. Laboratory tests show that its heat dissipation efficiency can be up to three times that of traditional cold plates. However, Morgan Stanley believes the technology still faces challenges in "reliability," "design integration," and "serviceability," and its widespread adoption will take time. Therefore, it will have little short-term impact on suppliers of traditional heat dissipation solutions.

SAP faces an EU antitrust investigation over software support services. The European Commission has launched an antitrust investigation into SAP, the German software giant, suspecting that it restricts competition in the market for maintenance and support services of enterprise resource planning (ERP) software, thereby undermining customer choices and driving up costs. The EU is concerned that SAP may exploit customers through unfair trading terms. If the investigation confirms the allegations, SAP could face a substantial fine. SAP's stock price fell by more than 2.3%.

AI passes the CFA Level III exam easily in just a few minutes. Latest research shows that multiple AI models can now pass the prestigious CFA Level III exam in just a few minutes, whereas humans typically require years of study. Among them, Gemini 2.5 Pro delivered the best overall performance, and the domestic model KIMI K2 achieved an accuracy rate of 78.3% in multiple-choice questions. Despite AI's outstanding performance in the exam, experts believe it still cannot fully replace human financial professionals in aspects such as contextual understanding.

# Industries/Concepts

## 1. Copper

According to China Nonferrous Metals News, the 5th Meeting of the 3rd Council of the Copper Branch of the China Nonferrous Metals Industry Association was recently held in Xiong'an New Area, Hebei Province. The China Nonferrous Metals Industry Association attaches great importance to the "involution" issue in the copper smelting industry and has put forward specific suggestions on measures to strictly control the expansion of copper smelting capacity. Currently, relevant national authorities are accelerating research on specific measures to strengthen the standardized management of copper smelting capacity construction.

**Commentary**: TF Securities believes that the top priority for "countering involution" in the copper smelting industry lies in "capacity optimization." First, eliminate a batch of outdated capacity; second, reduce costs and improve efficiency of existing capacity, including the adoption of advanced smelting technologies as well as intelligent and green transformation; third, newly built or expanded capacity should involve the construction of high-level smelters, and support the matching of copper mine capacity or the effective use of recycled resources. The copper industry is expected to see its profits return to positive territory in the long run, with optimized capacity distribution. Drawing on the achievements of supply-side structural reform, it is expected that through "countering involution," the matching degree between mining and smelting sectors will improve, and the copper smelting industry is likely to turn losses into profits.

## 2. Digital RMB

On September 25th, according to Xinhua News Agency, it was learned from the People's Bank of China that the Digital RMB International Operation Center was officially put into operation in Shanghai, and three major business platforms were launched—namely the Digital RMB Cross-border Digital Payment Platform, the Digital RMB Blockchain Service Platform, and the Digital Asset Platform. It is reported that the Digital RMB Cross-border Digital Payment Platform explores the use of legal digital currency to address pain points in traditional cross-border payments; the Digital RMB Blockchain Service Platform provides standardized cross-chain transaction information transfer and on-chain Digital RMB payment services for blockchains in various scenarios and industries; the Digital Asset Platform can offer standard, ready-to-use financial-grade digital asset services, supporting existing financial infrastructure to expand their businesses onto the blockchain.

**Commentary**: Research institutions believe that as China's legal digital currency, Digital RMB relies on advanced technologies to ensure security and stability. Its underlying technologies include blockchain, distributed ledgers, dual offline payment, and robust encryption algorithms. These technologies not only enhance the transparency and security of transactions but also ensure the protection of user privacy. In particular, the dual offline payment function allows users to complete transactions without a network connection, further enhancing the practicality and flexibility of Digital RMB. Digital RMB has huge potential for future development, and technology and service companies in its industrial chain are presented with development opportunities.

## 3. Advanced Packaging

According to Jiemian News, at the 2025 Yunqi Conference, Intel exhibited its next-generation Xeon processor. It is reported that the next-generation Intel Xeon Efficiency Core processor will adopt the all-new Intel 18A process and Foveros Direct3D advanced packaging technology to further improve performance and energy efficiency. It has not been officially released yet. At the 2025 Yunqi Conference, Intel also jointly launched a number of new cloud infrastructure products based on the Xeon 6 processor with Alibaba Cloud.

**Commentary**: Industrial Securities believes that driven by demand in the AI market, the scale of the advanced packaging market is growing rapidly, and its market share will surpass that of traditional packaging. According to institutional statistics, the global advanced packaging market size was $44.3 billion in 2022 and is expected to reach $78.6 billion by 2028, with a compound annual growth rate (CAGR) of 10% from 2022 to 2028. Among advanced packaging formats, Flip Chip (FC) packaging accounted for the largest share in 2022 at 51%, while 2.5D/3D packaging accounted for 21%. It is expected that by 2028, the share of FC packaging will drop to 47%, and the share of 2.5D/3D packaging will rise to 33%, making 2.5D/3D packaging the fastest-growing advanced packaging format.

## 4. AI Video

On September 25th, according to TechWeb, Baidu's Steam Engine— the world's first integrated Chinese audio-video video generation model—was upgraded and launched a general AI long video generation function. This function supports users in generating AI videos of unlimited length and provides a brand-new "streaming unlimited generation" experience. This upgrade is a first in the industry, breaking through the previous limitation where AI could only generate short videos of 5 or 10 seconds or rely on start and end frames to control the duration of extended videos. It uses streaming generation technology to achieve "unlimited" generation capability for general long videos.

**Commentary**: Baidu launched the Steam Engine 2.0 version a month ago, covering multiple editions including Turbo, Lite, Pro, and the audio-enabled version, further enriching product forms and user choices. The pricing strategy for the new Steam Engine version has been significantly reduced, with the listed price dropping to 70% of that of similar products. This pricing move not only lowers the threshold for video generation but also enhances the cost-effectiveness and competitiveness of Baidu's Steam Engine in the market. Analysts believe that the launch of this general AI long video generation function is expected to further expand the application scenarios of AI video generation tools, including film-level special effects and digital content creation.

## 5. Brain-Computer Interface

According to China Securities Journal, BrainCo, a company known as one of the "Six Dragons of Hangzhou," recently demonstrated a groundbreaking wirelessly connected bionic hand product. It does not require chip implantation; instead, it relies on super sensors in contact with the skin to decode neuromuscular electrical signals, allowing users to control it with their thoughts to perform actions such as grasping and lifting, with almost negligible delay. This bionic hand can help people with disabilities solve many problems related to daily self-care. And this is just the beginning—the R&D team is fully committed to developing neural control for lower limbs, and more people with disabilities will benefit from this technology in the future.

**Commentary**: It is reported that this product breaks away from the physical control method of traditional prosthetics and realizes a true "brain remote control." BrainCo focuses on the R&D of non-invasive brain-computer interface technology and is committed to enhancing human capabilities through brain-computer technology. Its core products include intelligent bionic hands and intelligent bionic legs. Unlike invasive solutions, BrainCo has chosen a non-implantation path. Through independently developed AI algorithms to analyze brain neural signals, it enables patients with high paraplegia to write with their thoughts without the need for exoskeletons, and allows people with aphasia to "speak" again.

# Preview of Today's Key News

- U.S. Personal Income, Consumer Spending, and Core PCE Price Index for August

- University of Michigan U.S. Consumer Sentiment and Inflation Expectations for September

- Tokyo CPI for September (Japan)

- Speeches by Federal Reserve Governor Bowman and Richmond Fed President Barkin

- Alibaba 2025 Yunqi Conference

- Muxi Threads' IPO hearing on the Science and Technology Innovation Board (STAR Market)

- Launch of Li Auto i6

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# Risk Warning and Disclaimer

The market is risky, and investment needs to be prudent. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinion, view, or conclusion in this article is consistent with their specific situation. Any investment made based on this article shall be at the user's own risk.