Morning News

Source: Wall Street News

Middle East tensions overshadowed the positive sentiment from interest rate cuts, causing the rally in U.S. stocks to fade. The S&P 500 and Nasdaq ended their three-day winning streak, while the Dow Jones closed nearly flat. Apple fell nearly 2% amid tariff concerns. Quantum computing stocks surged as Jensen Huang expressed optimism about quantum technology—Quantum Computing Inc. rose nearly 26%, and IBM gained nearly 2% to an all-time high after claiming a quantum computing breakthrough. Ouster surged 27% after its digital lidar was approved by the U.S. Department of Defense, and Oracle jumped as much as 8% in after-hours trading following strong quarterly results.  

With inflation slowing more than expected, U.S. Treasury prices rose intraday after the CPI release. The 2-year Treasury yield plunged over 10 basis points from its daily high, the U.S. dollar index accelerated its decline toward a three-year low, the offshore yuan reversed to gain briefly, and gold hit a daily high with an intraday jump of over 1%.  

As Middle East risks intensified, Bitcoin fell nearly $2,000, breaking below the 109,000 yuan threshold. Crude oil rebounded sharply to a two-month high, surging over 5% intraday—Brent crude briefly surpassed $70 per barrel for the first time in two months.  

During Asian trading hours, Chinese A-shares rose collectively. Rare earth永磁 (rare earth permanent magnets) surged, Insta360 Innovation soared over 270% on its IPO debut, the Hang Seng Tech Index gained over 1%, and Pop Mart hit a new high.  

### Key News  

- China's International Trade Representative of the Ministry of Commerce: China and the U.S. have reached a preliminary agreement framework in principle.  

- The U.S. Federal Appellate Court extended Trump-era tariffs, with a key hearing scheduled for late July.  

- As Trump's tariff deadline approaches, the EU is said to have refused to compromise and plans to postpone trade talks until after July.  

- Despite pending tariff hikes, U.S. CPI rose 2.4% YoY in May, while core CPI rose 0.1% MoM, missing expectations for the fourth consecutive month.  

- U.S. Treasury Secretary Janet Yellen (note: "贝森特" may be a translation error; likely referring to Janet Yellen) at a hearing: U.S. inflation data is "very good"; failure by Congress to pass a spending bill would be a "disaster." The 899 clause aims to prevent U.S. companies from losing revenue abroad, and reciprocal tariffs on trade partners that negotiate in good faith are likely to be delayed; when asked if she would consider being Fed Chair: Hopes to continue as Treasury Secretary until 2029.  

- Trump's confidence in Iran nuclear talks "has weakened," and U.S. officials said the U.S. will reduce the size of its mission in Iraq; Iran warned it would strike U.S. military bases in the Middle East if talks fail; Iraq denied reports that the U.S. embassy in Iraq was preparing to evacuate; crude oil surged over 5% intraday.  

- The Musk-Trump feud took a dramatic turn: Elon Musk publicly apologized, saying he regretted attacking Trump and had gone too far. Media reported Musk privately called Trump late at night before his apology, with Mike Pence as a key mediator.  

- Jensen Huang at GTC: Quantum computing is reaching an inflection point, planning to build 20 new "AI factories" in Europe.  

- Volcano Engine showcases ByteDance's AI strength: The new Doubao 1.6 model supports multimodal thinking, with daily token calls surging 137-fold.  

### Market Close Data  

- U.S. and European equities: The Dow fell marginally by 1.1 points (nearly flat), the S&P 500 dropped 0.27%, the Nasdaq fell 0.5%, and the European STOXX 600 index declined 0.27%.  

- Chinese A-shares: The Shanghai Composite rose 0.52%, the Shenzhen Component Index gained 0.83%, and the ChiNext Index rose 1.21%.  

- Bond market: By the end of trading, the yield on the 10-year U.S. Treasury was about 4.42%, down about 5 basis points on the day; the 2-year yield was about 3.95%, down nearly 7 basis points.  

- Commodities: WTI July crude futures rose 4.88%, Brent August crude futures gained 4.33%, COMEX August gold futures closed roughly flat, COMEX July silver futures fell 1.04%, and COMEX July copper futures dropped 1.74%.  

### Detailed Key News  

#### Global Highlights  

**China's Commerce Ministry Trade Representative: China-U.S. Reach Framework Agreement in Principle**  

According to People's Daily, on local time June 10, Li Chenggang, China's International Trade Representative and Vice Minister of Commerce, stated in London during the first meeting of the China-U.S. economic and trade consultation mechanism that the two sides conducted professional, rational, in-depth, and candid communications. In principle, both sides reached a framework to implement the consensus from the June 5 telephone conversation between the two heads of state and the Geneva talks.  

The first meeting of the China-U.S. economic and trade consultation mechanism was held in London, UK. According to CCTV News, China重申 (reiterated) that both sides should move towards each other, honor their commitments with integrity and concrete actions, jointly safeguard the hard-won dialogue achievements, maintain communication and dialogue, promote stable and long-term development of China-U.S. economic and trade relations, and inject more certainty and stability into the global economy. The U.S. side said the meeting achieved positive results, further stabilizing bilateral economic and trade relations, and will act in accordance with the heads of state's instructions to implement the meeting consensus together with China.  

**U.S. Federal Appellate Court Extends Trump-Era Tariffs, Key Hearing Scheduled for Late July**  

Unless challengers quickly seek Supreme Court intervention, these tariff measures will remain effective for at least the next month until the legal battle concludes in the Washington appellate court. Whichever party loses in the Federal Circuit Court of Appeals may further appeal to the Supreme Court. Notably, the suspension period for Trump's tariffs will expire in one month. Unless a trade agreement is reached or the suspension is extended, U.S. tariff rates on many countries will rise sharply from July 9.  

**As Trump's Tariff Deadline Looms, EU Allegedly Refuses to Compromise, Plans to Postpone Trade Talks Until After July**  

Reports say the EU explicitly refused to rush into compromises at the negotiation table, believing that at best only a principled agreement can be reached, with specific details to be continued after July. The EU has prepared two rounds of countermeasures covering over $100 billion in U.S. goods, which will take effect by July 14 if talks collapse.  

**Despite Pending Tariff Hikes, U.S. May CPI Rises 2.4% YoY, Core CPI Up 0.1% MoM—Fourth Consecutive Month Below Expectations**  

U.S. May CPI data全线 (across the board) missed expectations, with energy leading the slowdown in overall CPI. Prices of cars and clothing declined, while tariffs directly impacted price hikes in categories like toys and home appliances. Traders increased bets on Fed rate cuts, basically expecting two cuts this year, with a 75% probability of a cut before September.  

**U.S. Treasury Secretary Bessent's Hearing: Views on Inflation, Trade Agreements, Spending Bills, Debt Ceiling, and Fed Chair Succession**  

- Bessent attributed the slowdown in U.S. inflation to Trump's policies, calling the data "very good."  

- He said the "Great American Bill" on tax cuts and spending would bring manufacturing back to the U.S., attracting "unprecedented" investment. The bill's Section 899 prevents hundreds of billions of dollars in U.S. corporate revenue from flowing abroad. He warned that Congress failing to pass the bill would be a "disaster," leading to the largest tax hike in history and possibly a financial crisis unseen since 2008. On whether the bill would raise Treasury levels, he said it remains to be seen.  

- Trade partners have offered "too-good-to-be-true" agreements, and reciprocal tariffs on partners negotiating in good faith are likely to be delayed.  

- When asked if he would serve as Fed Chair, Bessent said he hopes to continue as Treasury Secretary until 2029.  

- He claimed financial stability has never been an issue, U.S. bond markets are operating smoothly, and Moody's is a "lagging indicator." Jamie Dimon's warnings on U.S. bonds seem to refer to market structure, not government finances.  

- He expects the X-date for hitting the debt ceiling in mid-late summer and believes his "333" target is still achievable.  

**Trump's Confidence in Iran Nuclear Talks 'Wanes,' U.S. to Reduce Iraq Mission Size, Brent Crude Jumps Over 5%**  

Trump said Iran appears to be stalling, emphasizing that Iran will not acquire nuclear weapons whether a deal is reached or not. Iranian Defense Minister Nasirzadeh warned that if talks fail and conflict erupts, Iran will target U.S. military bases in the Middle East. According to CCTV News, the Commander of Iran's Islamic Revolutionary Guard Corps said upgraded missiles are ready for any combat.  

Iraq denied that the U.S. embassy in Iraq was preparing to evacuate. Earlier on Wednesday, June 11, Iraqi security officials and U.S. sources said the U.S. embassy in Iraq was preparing to evacuate due to "escalating regional security risks."  

**Dramatic Turn in Trump-Musk Feud: Media Says Musk Privately Called Trump Late at Night Before Public Apology, with Pence as Key Mediator**  

Trump said Musk did the right thing by retracting, feeling Musk was deeply guilty about his words. He said he would not blame him, only being "a bit disappointed" by Musk's criticism of the Republican spending bill. When asked if he could reconcile with Musk, Trump said, "I think I can."  

Media reported that U.S. Vice President Pence and White House Chief of Staff Wiles urged Musk to end the dispute in a phone call last Friday. Musk privately discussed "truce" options with Pence and Wiles on Friday, and a Monday call with Trump prompted Musk to post an apology on Wednesday.  

**Musk Apologizes: Regrets Attacking Trump, Admits Going Too Far**  

On Wednesday, Musk posted on X: "I regret some of the posts I made last week about President Trump; they went too far." This was his strongest apology yet. After his statement, Tesla's after-hours stock price surged nearly 2%.  

**Morgan Stanley's Take on the Feud: Musk's Careful Design, Market Underestimates His Abilities, with Many Trading Opportunities Ahead**  

MS believes the Trump-Musk dispute was not impulsive but a strategically planned move by Musk to achieve specific goals and maximize public attention. By pushing the U.S. budget deficit and debt into the spotlight, he believes Tesla, SpaceX, and other firms, however successful individually, are ultimately tied to the nation's overall fiscal strength. MS warned that if the dispute escalates, Tesla's stock could face more volatility but also create abundant trading opportunities.  

**Musk: Robotaxi Trial Operation Starts June 22**  

Musk revealed the trial will be极小 (minuscule), involving only 10-20 Robotaxis—Model Y equipped with the new "unsupervised" FSD technology. Initial operations will be limited to specific areas, with company employees monitoring remotely.  

**Jensen Huang's Full GTC Speech: Quantum Computing Reaching Inflection Point, Plans 20 New 'AI Factories' in Europe**  

At the June 11 GTC conference, Huang announced plans for 20 new "AI factories" in Europe, where AI computing power will grow 10-fold in two years, equipped with 10,000 GPUs. Quantum computing is reaching a critical inflection point, expected to become powerful enough in the next few years to "solve some interesting global problems."  

**Volcano Engine Showcases ByteDance's AI Strength: New Doubao 1.6 Model Supports Multimodal Thinking, Daily Token Calls Surge 137-Fold!**  

ByteDance's Volcano Engine released Doubao 1.6, enabling multimodal thinking—scoring 144 in the college entrance math exam and supporting GUI operations. Its首创 (pioneering) unified pricing model cuts comprehensive costs for common corporate use by 63%. As of late May 2025, Doubao's daily token usage exceeded 1.64 trillion, up 137-fold from its launch in May last year.  

#### Domestic Companies  

**Can 60-Day Payment Terms End Price Wars in the Auto Industry?**  

Shortening payment terms—does it truly reduce the time suppliers receive payments? Are there more strategies at play around the 60-day mark? Automakers need more tangible actions to prove consistency between words and deeds.  

**Joe Tsai: After DeepSeek's Breakthrough, Alibaba Engineers Worked Through Spring Festival to Chase the AI Wave**  

Alibaba Chairman Joe Tsai said China's vibrant consumer internet environment, coupled with the fierce competitive culture among local engineers, continues to drive AI innovation. Alibaba realized it had fallen behind in AI after DeepSeek released Model R1, prompting engineers to cancel holidays and work through the Spring Festival to launch the Qwen series. One reason for open-sourcing Qwen is to promote AI adoption, benefiting the company's cloud computing business.  

**Insiders Say Pop Mart Expanded Production Capacity Early This Year, but Demand Outpaces Supply Chain Response**  

According to The Paper, as IP popularity surges, Pop Mart urgently recruited workers to resume production after the Spring Festival to meet booming demand. For brands, when market demand far exceeds supply chain capacity, it's a "bittersweet problem"—"We're running sewing machines at full tilt but still can't keep up."  

#### Overseas Macro  

**10-Year U.S. Treasury Auction Holds Steady, Robust Demand Eases Market Concerns**  

Amid a global surge in long-term bond supply—where auctions have become risky—this 10-year Treasury auction performed relatively strongly. Analysts say "animal spirits" have returned in the U.S., with markets apparently buying everything frantically. After the auction, the 10-year yield fell to an intraday low, the lowest in a week.  

**Wall Street Guru Tudor Jones: Trump Will Pick 'Ultra-Dovish' Fed Chair, with Bessent as Top Choice**  

Billionaire investor Paul Tudor Jones believes Trump is likely to appoint an "ultra-dovish" Fed chair to align with his pro-growth policies, with Treasury Secretary Bessent the most probable candidate.  

**'New Bond King' Gundlach Warns: U.S. Treasuries No Longer Safe Havens, '清算时刻 (Liquidation Moment) Approaches'**  

Gundlach said Wednesday that U.S. debt burdens and interest payments have become "unsustainable," meaning long-term Treasuries are no longer seen as truly risk-free investments. He compared the current market to the pre-1999 dot-com bubble and pre-2007 financial crisis environments, advising investors to increase non-U.S. dollar assets. His firm is incorporating foreign currencies into its funds.  

**Gold Replaces Euro as World's Second-Largest Reserve Asset**  

The ECB reported Wednesday that global central banks' gold reserves accounted for 20% in 2024, surpassing the euro's 16% to become the second-largest reserve asset after the U.S. dollar (46%). Central banks have bought over 1,000 tons of gold for three consecutive years—double the 2010s average—at a record pace. Major buyers last year included China, India, Turkey, and Poland.  

#### Overseas Companies  

**OpenAI Delays Open-Source Model Launch to Late Summer—Aims to Snipe DeepSeek R2?**  

OpenAI postponed its originally scheduled June open-source model launch to late summer, with Altman citing "unexpected breakthroughs" requiring more optimization. The model aims to outperform open-source inference models like DeepSeek R1, featuring GPT-4o-level complex reasoning. Netizens speculate that rushing a launch now could leave OpenAI at a disadvantage when DeepSeek R2 debuts.  

**IBM Hits All-Time High on Genuine 'Quantum Computing' Breakthrough**  

IBM claims to have found a "feasible path" to build the world's first large-scale "fault-tolerant" quantum computer by 2030, with operational capabilities expected to be 20,000 times that of existing machines. The company plans to launch IBM Quantum Loon for testing the architecture later this year.  

**Nintendo Switch 2 Sells 3.5 Million Units in Four Days, Sets Record—Analysts Eye 20 Million Target**  

Switch 2 is currently out of stock at major U.S. retailers like Walmart, GameStop, Target, and Best Buy. Nintendo set a sales target of 15 million units by the end of the fiscal year in March 2026, but analysts widely view this as conservative.  

#### Sectors/Concepts  

1. **Civil Aviation**: CITIC Securities notes that from both incremental and stock perspectives, domestic civil aviation supply is fragile, with industry supply growth remaining low. The mismatch with demand is increasingly evident. Benefiting from three tailwinds—supply-demand dynamics, oil prices, and exchange rates—airlines are迎来 (ushering in) an earnings inflection point.  

2. **Price Hikes**: Recent notable price increases in H-acid and reactive dyes. Debon Securities reports that environmental pressures create long-term supply-demand gaps; investors should value related companies' elasticity.  

3. **Beverages**: Guosheng Securities states that the beverage industry is expected to see intensive catalysts during the short-term peak season. Throughout the year, beverage companies are accelerating new product launches, with strategic single products aligning with trends of health and cost-effectiveness. Combined with reforms like management renewal, mechanism improvement, and marketing breakthroughs, the probability of single-product success is enhanced, enabling positive growth.  

4. **Robotics**: Sinolink Securities points out that as China's aging process deepens, the elderly care robot market shows broad prospects, with conservative estimates of short-term market size exceeding 15 billion yuan. The elderly care robot industry chain is highly synergistic with humanoid robots, and its rapid development will continue to catalyze upgrades in related industry chains. Focus on high-precision sensors and core precision transmission components like reducers and lead screws.  

#### Upcoming Key News  

- U.S. May PPI  

- U.S. initial jobless claims last week  

- Fed releases "U.S. Quarterly Financial Accounts Report"  

- Adobe earnings report  

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