Morning News

# Market Overview

Source: Wall Street CN

## Market Overview

As the Middle East conflict persisted, international oil prices staged a strong rebound at one point. U.S. Treasury yields and the U.S. dollar strengthened, while all three major U.S. stock indices closed lower. After the U.S. stock market closed, expectations of a U.S.-Iran ceasefire and peace talks emerged. WTI crude oil plummeted by more than 6% within an hour of after-hours trading, erasing nearly all of its intraday gains. The Nasdaq 100 futures rose by over 1%, and gold prices surged.

During Tuesday's regular trading session, U.S. small-cap stocks bucked the trend and closed up 0.45%. The Magnificent Seven tech giants significantly underperformed, wiping out the previous day's gains. Google fell 3.85%, and Oracle dropped 4.7%. The tech software sector ETF plunged more than 4% on the day. Circle plummeted nearly 20% amid concerns over U.S. stablecoin legislation.

U.S. Treasury yields rose across the board. The 10-year yield climbed more than 8 basis points at one point. The 2-year Treasury note auction was weak, with its yield rising over 10 basis points before narrowing its gains by the close.

The U.S. dollar fluctuated higher by 0.3%. Gold rose 1.4% intraday, and silver gained nearly 3%. Bitcoin fell 2.3%, dropping below $70,000.

During the Asian trading session, the Shanghai Composite rebounded by more than 1%, with micro-cap stocks surging over 5%. Power and pharmaceutical sectors rebounded. The Hang Seng Index rose more than 2%, and Laopu Gold soared over 15%.

## Key News

### China

- Wang Yi held a phone call with Iranian Foreign Minister Araghchi.

- Xiaomi Group's 2025 revenue exceeded 400 billion yuan for the first time. Adjusted net profit rose 44% year-on-year, also hitting a record high. Its automotive business achieved full-year profitability for the first time. During the earnings call: The company plans to invest 60 billion yuan in the AI field over the next three years. It will "strive to absorb" memory price hikes but "does not rule out passing on costs". The timeline for car exports remains unchanged.

- China Telecom's 2025 revenue reached 529.56 billion yuan, with a net profit of 33.18 billion yuan. The company focuses on building a leading AI service provider.

- Hujing Technology's 2025 revenue grew by 42%, and net profit increased by 47.74%. Its AI switch business doubled, leading the sector.

- Alibaba's next-generation flagship processor, Xuantie C950, set a new global record, tailored for the AI Agent era.

### Overseas

- Trump backs Pakistan to host U.S.-Iran talks. About 3,000 troops from the U.S. 82nd Airborne Division are reportedly being deployed to the Middle East. Gulf states are said to be considering joining actions against Iran. Trump stated that U.S.-Iran negotiations "may be quite close to an agreement" and that Iran has agreed to never possess nuclear weapons. Reports indicate the U.S. intends a one-month ceasefire and has put forward 15 peace talk proposals. The U.S. is reportedly demanding protection fees from multiple countries: "Spend $2.5 trillion to end the war!" Iran is again said to be charging "tolls" for passage through the Strait of Hormuz.

- Japan will release oil reserves starting Thursday, the largest in history. The first tanker taking a detour is set to arrive in Japan.

- Turkey's defense of the lira escalates, with the use of gold reserves. Plans are underway to launch gold-currency exchange to counter war impacts.

- The U.S. March composite PMI unexpectedly fell to 51.4. Manufacturing expansion accelerated, while services growth slowed. Stagflation alarms ring as the Eurozone March composite PMI dropped to a 10-month low. France's PMI contracted for the third consecutive month.

- U.S. software stocks suffered another rout! Amazon's new tools triggered a chain reaction. The software ETF plummeted 4%, widening its year-to-date decline to 23%.

- In an in-depth interview, Jensen Huang stated that the "Token economy" is booming. The share of AI computing in GDP will increase a hundredfold, and Nvidia's market cap reaching $10 trillion is inevitable.

- Microsoft has leased a Texas data center abandoned by Oracle and OpenAI, and is collaborating with Nvidia on AI using nuclear energy.

- OpenAI plans to shut down its Sora video platform. Its non-profit division aims to spend $10 billion in 2026.

- The private credit crisis intensifies. Moody's downgraded a KKR fund to "junk status", with the bad debt rate soaring to 5.5%.

- A proposed U.S. bill may restrict stablecoin "interest-earning" capabilities. Circle plummeted nearly 20%, marking its largest single-day drop in history.

## Market Closing

### U.S. & European Stocks

- S&P 500: -0.37% to 6,556.37 points

- Dow Jones Industrial Average: -0.18% to 46,124.06 points

- Nasdaq Composite: -0.84% to 21,761.894 points

- European STOXX 600: +0.43% to 579.28 points

### A-Shares

- Shanghai Composite Index: +1.78% to 3,881.28 points

- Shenzhen Component Index: +1.43% to 13,536.56 points

- ChiNext Index: +0.50% to 3,251.55 points

### Bond Market

- U.S. 10-year Treasury yield: +1.79 bps to 4.3359%

- U.S. 2-year Treasury yield: +3.68 bps to 3.8887%

### Commodities

- Spot gold: +1.15% to $4,459.60/oz

- Spot silver: +2.65% to $71.0768/oz (intraday high)

- WTI May crude oil futures: +4.79% to $92.35/bbl

- Brent May crude oil futures: +4.55% to $104.49/bbl

- Early Wednesday Asia session: WTI crude oil fell 4% intraday to $88.57/bbl

# Detailed News

## Global Highlights

### China

- **Wang Yi held a phone call with Iranian Foreign Minister Araghchi**. Wang Yi reaffirmed China's principled stance, emphasizing that all hotspot issues should be resolved through dialogue and negotiation, not by force. Talking is always better than fighting. This serves the interests of Iran and its people and responds to the universal aspirations of the international community. It is hoped that all parties will seize every opportunity and window for peace to launch the peace talks process as soon as possible. China will continue to uphold an objective and impartial position, oppose violations of other countries' sovereignty, actively promote peace and stop wars, and commit to regional peace and stability.

- **Xiaomi Group's 2025 revenue exceeded 400 billion yuan for the first time, with adjusted net profit rising 44% YoY to a new high, and its automotive business achieving full-year profitability for the first time**. Earnings call: The company plans to invest 60 billion yuan in the AI field over the next three years; it will "strive to absorb" memory price hikes but "does not rule out passing on costs"; the timeline for car exports remains unchanged.

 Xiaomi Group's 2025 revenue reached 457.3 billion yuan, with a net profit of 39.2 billion yuan, both hitting record highs. The automotive business achieved full-year profitability for the first time, delivering 411,000 vehicles with revenue exceeding 100 billion yuan. The core "Smartphone × AIoT" business remained robust, with remarkable results in high-end positioning. Annual R&D investment reached 33.1 billion yuan, with intensive breakthroughs in AI and chip technologies, and the "Human-Car-Home Full Ecosystem" strategy delivered tangible results.

 As disclosed at Xiaomi's 2025 earnings conference, annual revenue hit 457.3 billion yuan and net profit 39.2 billion yuan, both all-time highs. The automotive business turned profitable for the full year, with a 2026 delivery target of 550,000 units. The AI strategy is accelerating comprehensively, with **Xiaomi miclaw** entering closed testing, and 60 billion yuan to be invested over the next three years. Facing memory price pressures, Xiaomi responds calmly with ecosystem balance and supply chain advantages, without ruling out price pass-through. The company continues to ramp up chip and high-end strategies and accelerate overseas market expansion.

- **China Telecom's 2025 revenue reached 529.56 billion yuan, with a net profit of 33.18 billion yuan, focusing on building a leading AI service provider**. China Telecom's 2025 revenue and net profit stood at 529.56 billion yuan and 33.18 billion yuan, up 0.1% and 0.5% YoY respectively, both below Bloomberg estimates. Service revenue accounted for 92.7%, while industrial digitalization growth was sluggish at just 0.5% YoY. The company raised its annual dividend payout ratio to 75%, with a dividend per share of 0.272 yuan. Strategically, it is accelerating the upgrade to "Cloud Reform, Digital Transformation, Intelligent Wisdom," with total intelligent computing capacity reaching 91 EFLOPS, fully embracing artificial intelligence.

- **Hujing Technology's 2025 revenue grew 42%, net profit rose 47.74%, with AI switch business doubling to lead the sector**. Hujing Technology's 2025 revenue reached 18.945 billion yuan, up 42%; net profit attributable to shareholders was 3.822 billion yuan, up 47.74%. Performance growth accelerated quarter by quarter, with Q4 revenue hitting 5.433 billion yuan and net profit 1.105 billion yuan, both the strongest single quarters of the year. Driven by major global cloud service providers ramping up AI capital expenditure, demand for high-speed network switches and PCBs for AI servers expanded rapidly.

- **Alibaba's next-generation flagship processor **Xuantie C950** sets a new global record, tailored for the AI Agent era**. Built on a 5nm process with a frequency of 3.2GHz, its single-core performance exceeded 70 points for the first time, with comprehensive performance more than three times that of the previous-generation Xuantie C920, breaking the global RISC-V CPU performance record. It is suitable for cloud computing, generative AI, high-end robotics, edge computing, and other fields. Leveraging the open-source nature of RISC-V, Xuantie C950 natively supports large models with hundreds of billions of parameters such as Qwen3 and DeepSeek V3 for the first time, and is poised to become a new high-end CPU for the AI Agent era.

### Overseas

- **Trump backs Pakistan to host U.S.-Iran talks; about 3,000 troops from the U.S. 82nd Airborne Division are reportedly deploying to the Middle East; Gulf states are said to consider joining actions against Iran**. Pakistan's prime minister stated readiness to host U.S.-Iran talks; Iran reportedly fears the negotiations could be a "trap." Reports indicate the U.S. Army's elite 82nd Airborne Division's "Immediate Response Force" is set to deploy to the Middle East. The White House said military actions against Iran remain "ongoing and unabated." Israel's defense minister stated Israel is conducting strikes against Iran at "full intensity." Iran appointed Zolghadr as Secretary of the Supreme National Security Council, replacing the late Larijani. Gulf states including Saudi Arabia and the UAE are said to be losing patience with Iran but have a high threshold for war, only acting if Iran attacks their water and power infrastructure. Qatar denied involvement in mediation, emphasizing priority on national security.

- **Trump says U.S.-Iran negotiations "may be quite close to an agreement" and Iran has agreed to never possess nuclear weapons; reports say the U.S. intends a one-month ceasefire and has put forward 15 peace proposals**. Trump stated Iran "wants an agreement" and has "begun rational communication"; the U.S. is in talks with Iran, which will surge the global "programmer" population from 30 million to 1 billion.

- **Microsoft leases a Texas data center abandoned by Oracle and OpenAI, and collaborates with Nvidia on AI using nuclear energy**. Microsoft quietly took over the 700-megawatt Texas data center project that collapsed in negotiations between Oracle and OpenAI, investing approximately $50 billion to expand AI infrastructure. Meanwhile, Microsoft and Nvidia launched the "AI for Nuclear" initiative, using AI to cut nuclear power licensing approval cycles by 92%. Microsoft has accelerated a two-front battle for computing power and energy.

- **Claude kills OpenClaw!** Early Tuesday, Claude launched its "Computer Use" feature, allowing AI to control computers across applications with a single sentence—handling files, editing images, writing code, and supporting remote control via mobile phones with built-in safety guardrails. Netizens exclaimed this move "killed OpenClaw"! However, the feature is currently only available to Claude Pro and Max subscribers and supports only macOS.

- **After 9 days of anticipation, OpenClaw's major upgrade "flops."** Nine days after its last release, OpenClaw launched an "epic update," introducing the plugin marketplace **ClawHub**, support for switching models per Agent, the new `/btw` lightweight Q&A command, and enhanced authentication and execution security. But rushed release led to issues like missing Web UI and non-functional WeChat plugins, prompting the founder to issue urgent fixes and frequent responses. Even with fast patch updates, netizens remained critical: some joked "testing work was outsourced to users."

- **OpenAI plans to shut down the Sora video platform; its non-profit division aims to spend $10 billion in 2026**. OpenAI will discontinue the Sora AI video generation service to streamline its product lineup. This is part of a series of adjustments to refocus on commercial and programming functions ahead of a potential IPO as early as Q4 this year. OpenAI plans to invest $10 billion through its non-profit division in various AI-related projects in 2026, with several key personnel appointments made. On the same day, reports said OpenAI completed preliminary development of a new AI model; Altman will no longer directly oversee the company's safety team, focusing instead on financing, supply chains, and data center construction.

- **Private credit crisis intensifies; Moody's downgrades KKR-affiliated fund to "junk status," with bad debt rate soaring to 5.5%**. Moody's downgraded the debt rating of FS KKR Capital Corp, a private credit fund jointly operated by KKR and Future Standard, to Ba1. Moody's noted the fund's underlying asset quality has deteriorated significantly lagging behind peer Business Development Companies (BDCs). As of the end of 2025, the fund's non-performing loan ratio (loans where borrowers stopped repaying, as a share of total investments) rose to 5.5%, among the highest for rated BDCs.

- **Proposed U.S. bill may restrict stablecoin "interest-earning" capabilities; Circle plunges nearly 20%, marking its largest single-day drop in history**. Shares of stablecoin issuer Circle plummeted after a latest version of the **Clarity Act** revealed potential restrictions on stablecoin balance yields. Circle's plunge also dragged down Coinbase. On the same day, Circle's competitor Tether announced it had hired an unnamed "Big Four accounting firm" to conduct its first audit of USDT reserves.

## Selected Research Reports

- **JPMorgan quantifies oil shock: Global oil supply deficit may persist at 10 million barrels per day; policy tools unlikely to fill the gap**. JPMorgan warned the Strait of Hormuz crisis has created a global oil deficit of up to 16 million barrels per day. Policy tools such as strategic reserves and sanction waivers are a drop in the bucket, with a roughly 10 million bpd deficit likely to persist long-term. Chemicals, aviation, and agriculture face broad pressure, with Southeast Asia bearing the brunt—as price hikes become the only adjustment mechanism, demand destruction is spreading system-wide.

- **Bernstein "pours cold water": Musk's superchip factory requires $5–13 trillion in capital expenditure, "harder than landing on Mars."** Bernstein believes the "Terafab" project remains largely speculative. It estimates achieving an annual production capacity of 1 exaflop would require $5–13 trillion in capital expenditure and add semiconductor capacity equivalent to the current global total, with difficulty "comparable to rebuilding the entire semiconductor industry."

- **SemiAnalysis deep dive into GTC: Behind three new systems, Nvidia is redefining the boundaries of AI infrastructure**. At GTC 2026, Nvidia launched three systems: the LPX inference rack integrating Groq LP30 chips, the liquid-cooled Vera ETL256 rack housing 256 CPUs, and the STX storage reference architecture. SemiAnalysis argues the three systems send a unified strategic signal: Nvidia is no longer just a GPU supplier but evolving into a full-stack AI infrastructure platform provider, expanding into inference optimization, CPU density, storage orchestration, and other areas previously dominated by other vendors—profoundly reshaping the competitive landscape of the entire AI hardware supply chain.

# Domestic Companies

- **JD.com open-sources the Instruct version of its foundational large model JoyAI-LLM Flash, optimized for the recently popular "Longxia" (OpenClaw)**. Boasting core advantages of efficient response, lightweight deployment, and high precision, the model is well-suited for code development, agent building, terminal applications, and especially the trending "Longxia" ecosystem, providing a cost-effective model foundation for developers and SMEs. Since the launch of JD Cloud's "Longxia" series, token calls have surged **455% week-on-week**.

- **Haidilao posts 1.1% revenue growth in 2025, net profit down 14% amid pressure; delivery revenue more than doubles**. Total revenue reached **43.225 billion yuan** (+1.1% YoY), while net profit fell 14.0% to **4.042 billion yuan**. The core drag on profits was persistently declining table turnover, with self-operated restaurants averaging **3.9 turns/day**. On the bright side, delivery revenue soared **111.9% YoY** to **2.658 billion yuan**.

- **Nongfu Spring achieves record 22.5% revenue growth in 2025, net profit up 30.9%; proposes 11.134 billion yuan cash dividend**. Annual revenue topped **50 billion yuan** for the first time. Ready-to-drink tea remained the growth engine, with revenue of **21.596 billion yuan** (+29.0% YoY). Packaged water resumed growth after adjustments, reaching **18.709 billion yuan** (+17.3% YoY).

- **Mixue Ice Cream & Tea reports 33% surge in net profit, 35.2% revenue growth in 2025; global stores near 60,000**. Revenue rose 35.2% to **33.56 billion yuan**, beating analyst estimates of **32.94 billion yuan**. Net profit jumped 33.1% to **5.93 billion yuan**, exceeding market expectations of 31% growth. Zhang Hongfu stepped down as CEO to become co-chairman, with Zhang Yuan taking over as CEO. Global store count expanded from 46,000 at end-2024 to nearly 60,000. Mixue Group’s Hong Kong-listed shares rose over 8% in afternoon trading.

- **Wall Street analysts hail Laopu Gold’s earnings: results beat expectations, company on track to become China’s first true luxury brand**. Citi and Nomura note growth driven by store expansion, rising gold prices, and price hikes, with significantly improved profitability. Even in a bearish scenario with falling gold prices, profits remain stable with limited downside risk; ample inventory removes financing pressure. Brand premiumization accelerates, with customer overlap with top luxury brands rising, positioning it as a rare "Chinese luxury brand" candidate.

# Overseas Macro

- **Crude futures trading volume spikes 15 minutes before Trump’s "TACO" announcement**. Just 15 minutes before Trump posted that U.S.-Iran talks were "productive," a **$580 million** large sell order hit the oil market, triggering a sharp drop in oil prices and a jump in U.S. stock futures. The unusual timing led hedge funds to claim "someone just made a fortune". The White House denied insider trading, but Iran later called the news "fake news," fueling concerns over market information asymmetry amid an information war.

- **Japan’s February CPI falls for 4th straight month; headline inflation drops to 1.3%, a 4-year low; core CPI slips below 2% policy target for first time in 4 years**. Government fuel subsidies continue to suppress inflation, while the Middle East conflict pushes energy prices higher, creating a tug-of-war. With near-stagnant growth and distorted inflation signals, BOJ Governor Kazuo Ueda faces an uncertain path to rate hikes.

# Overseas Companies

- **Anthropic expands AI autonomy, introduces auto mode for Claude Code**. The new "auto mode" lets AI decide which actions to execute directly without user confirmation, with built-in safety layers reviewing all operations—approving safe actions and blocking risky ones.

- **Arm challenges Intel and AMD directly with first AI data center CPU; targets $15 billion annual revenue**. Arm’s AGI CPU features up to 136 cores, competes with x86 architectures, and works with AI accelerators; initial customers include Meta. Arm aims to "capture a larger share of AI infrastructure spending," projecting new chip sales to exceed existing business in 5 years, with total annual revenue reaching **$25 billion**—five times current levels. Shares briefly rose 2.7% before turning lower.

- **Investment ramps up amid explosive demand growth**. In January 2026, China halted rare earth exports to Japan; rare earth materials are critical for producing faraday rotators.

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# Hot Topics & Market Commentary

## 1. Rare Earths

China suspended rare earth exports to Japan in January 2026. Faraday rotator production relies on rare earth materials, and market demand is surging as construction accelerates.

## 2. Computing Power

At the **China Development Forum 2026** on March 23, National Data Bureau Director Liu Liehong officially translated **Token** as **"cíyuán" (word token)**. He emphasized it is not only a value anchor in the intelligent era but also a "settlement unit" connecting tech supply and commercial demand, enabling quantifiable business models.

**Commentary (Securities Times):** By end-2025, China had built over **100,000 high-quality datasets**. As of March 2026, daily token (cíyuán) calls exceed **140 trillion**—up over **1,000x** from early 2024 (100 billion) and **40%+** from end-2025 (100 trillion).

## 3. Semiconductors

The **China (Shanghai) International Semiconductor Exhibition** runs March 25–27. China accounts for **1/3** of global semiconductor sales, with demand rising from AI, 5G, IoT, energy conservation, and new energy vehicles. The 2026 market is projected to reach **1.985 trillion yuan**, showing huge potential.

**Commentary (Kaiyuan Securities):** Geopolitics, AI demand, and regional subsidies are reshaping the global wafer manufacturing landscape. Foundries are raising prices amid restocking in auto/industrial markets and cost pass-through. Long-term, advanced logic chip localization and CBA architecture penetration will drive massive wafer capacity demand and profit expansion.

## 4. Lithium Batteries

Chinese firms with lithium assets in Zimbabwe report normal operations, but **lithium concentrate exports remain suspended** with no further details on the ban. Discussions continue on resuming exports. On March 24, the main lithium carbonate contract rose **7.10%** intraday to **154,400 yuan/ton**. The nearly month-long ban may last longer than expected; market participants initially forecast a 1-month impact.

**Commentary:** Zimbabwe is a key lithium source for China. The ban aligns with its value-retention strategy, but the immediate full ban (only lithium sulfate allowed) is inconsistent with local production and likely temporary. Exports should resume after整顿 illegal mining and new approvals. Supply disruptions amid strong demand and low inventories may push lithium carbonate above **200,000 yuan/ton** if the ban is extended.

## 5. Building Materials

A subsidiary of **Sunrise** announced a **10%–25%** price increase for industrial coatings starting March 23, citing surging raw material costs (epoxy resin, acrylic acid, xylene). Prices will be negotiated case-by-case.

**Commentary:** The coating sector offers low investment value amid weak overall building material demand. However, leading companies have seen operational improvements and earnings recovery after years of property downturns, presenting attractive entry points for growth plays.

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# Today’s Key Events Preview

- Opening of **2026 Zhongguancun Forum Annual Meeting**

- UK February CPI data

- Speech by ECB President Christine Lagarde

- Release of BOJ January monetary policy meeting minutes

- Earnings reports: **Pinduoduo, Kuaishou, Pop Mart**

- Opening of **Shanghai International Semiconductor Exhibition**

- **China Rare Earth and Rare Metals Conference**

- U.S. weekly EIA crude oil inventory change

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# Risk Warning & Disclaimer

The market involves risks, and investment requires caution. This article does not constitute personal investment advice and does not consider the specific investment objectives, financial situations, or needs of individual users. Users should assess whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment decisions based on this article are at the user’s own risk.