Artificial intelligence has once again captured traders' attention. Although Nvidia's performance exceeded expectations, its stock price remained sluggish throughout the day, ultimately closing down more than 5%, dampening market sentiment. Influenced by the weak performance of the U.S. semiconductor sector, benchmark index contracts in Japan and South Korea, where technology stocks hold a relatively high weight, declined, while contracts in Australia and Hong Kong saw slight gains. These fluctuations further indicate the market's high sensitivity to AI-related news, as participants strive to comprehend the long-term implications of this rapidly advancing technology. According to Hardika Singh, an analyst at Fundstrat Global Advisors, the market's mediocre reaction to Nvidia's better-than-expected earnings report is partly because investors now take such exceptional performance for granted.

[SMM Zinc Morning Meeting Minutes: LME Zinc Ingot Inventory Remains Low, LME Zinc Fluctuates at Highs] Overnight, LME zinc opened at $3,387.5/mt, fluctuated upward after opening, touched a high of $3,416.5/mt, then pulled back all the way, approaching the end of the session, LME zinc touched a low of $3,362.5/mt, then rebounded from the low to near the daily average line, and finally closed down at $3,387/mt...

On the macro front, news of geopolitical easing and Trump's softening trade stance prompted profit-taking by bulls in the precious metals market. Additionally, Q3 earnings reports from several US banks showed lower-than-expected provisions for loan losses, suggesting some alleviation of the US credit crisis, which also weighed on the precious metals market. The recent pullback in silver prices is more indicative of a "short squeeze ending + high-leverage washout" rather than a trend reversal. The extreme short squeeze is cooling, while the underlying macro logic of "interest rate cuts + reflation" remains unchanged. The absolute level of circulating inventory remains low, and silver prices are expected to hold up well over the medium and long term. [Economic Data] Bullish: US EIA crude oil inventories for the week ending October 17: -961,000 barrels (previous: 3.524 million barrels, expected: 1.205 million barrels) Bearish: Germany September PPI MoM: -0.1% (previous: -0.8%, expected: 0%) [Spot Market] In the domestic silver spot market, domestic smelters primarily focus on large-ingot exports, leading to persistently tightening market liquidity. Spot premium quotes vary widely, and market consumption remains dominated by just-in-time procurement. This week, there was almost no price difference between national standard silver ingots and large-smelter ingots. In Shanghai, suppliers' premiums against TD rose to 50-70 yuan/kg or 50-60 yuan/kg against the SHFE silver 2512 contract. In Shenzhen, suppliers' premiums against TD increased to 70-90 yuan/kg, but transactions were thin due to limited supply. Facing high spot premiums, downstream end-users maintained just-in-time procurement. This week, small and medium-sized merchants in Shenzhen were cautious about high prices, with stockpiling enthusiasm slightly declining and wait-and-see sentiment prevailing in the market. PV silver paste: This week, the average reference price for solar cell rear-side silver paste was 7,245-7,788 yuan/kg; for solar cell front-side finger, it was 10,902-11,716 yuan/kg; and for solar cell front-side busbar, it was 10,852-11,666 yuan/kg.

On Thursday (June 12), US stocks opened lower but closed higher, with all three major indexes rising collectively. Both the Dow and the S&P 500 closed at their highest levels in at least three months. At the close, the Dow Jones Industrial Average rose 0.24% to 42,967.62 points, its highest level since March 6; the S&P 500 rose 0.38% to 6,045.26 points, a new high since February 21; and the Nasdaq Composite Index rose 0.24% to 19,662.48 points. Among the 30 Dow components, 19 rose and 11 fell. The biggest decliner was Boeing (-4.79%). Earlier in the day, an Air India Boeing 787-8 aircraft crashed shortly after takeoff, marking the first fatal accident involving the Boeing 787 model. Driven by Oracle's positive earnings report after the market close the previous day, AI-related stocks generally rose. Oracle surged 13.31%, closing at an all-time high, with its total market capitalization reaching $560 billion, surpassing Mastercard and Netflix. Oracle's earnings report showed that the company's revenue and earnings across all segments exceeded analysts' expectations. To top it off, the company also raised its revenue forecast for the next fiscal year and provided an optimistic outlook for accelerated growth in cloud infrastructure. Oracle CEO Safra Catz stated on the earnings call that Oracle expects total revenue for fiscal 2026 to reach at least $67 billion, representing a year-over-year increase of approximately 16.7%, up from the previous forecast of 15% growth. As previously reported by Cailian Press, Trump had announced an AI infrastructure project named "Stargate," with SoftBank, OpenAI, and Oracle as the initial three companies involved in this $500 billion project. In addition to AI factors, the better-than-expected PPI report before the market open also boosted US stocks. Data showed that the US PPI rose 2.6% YoY in May, in line with expectations; core PPI rose 3%, below the market consensus of 3.1%. Analysts believe this indicates that tariffs have not yet imposed higher inflationary pressure on consumers, further boosting expectations for a US Fed interest rate cut in September. Similar to yesterday's CPI report, Trump once again pressured the US Fed to cut interest rates after the data release. Tom Hainlin, Senior Investment Strategist at U.S. Bank Asset Management Group, said that the future direction of US stocks depends on the resolution of tariff issues and how that resolution affects government budgets and US Fed policies. Hainlin stated, "We believe that the uncertainty surrounding the progress of trade negotiations remains the fundamental situation for the stock market. The market is currently experiencing sideways movement, and it is difficult to see a sustained breakthrough until we reach a conclusion." Performance of Popular Stocks Large-cap tech stocks had mixed changes. (Ranked by market capitalization) Microsoft rose by 1.32%, Nvidia rose by 1.52%; Apple rose by 0.21%, Amazon rose by 0.02%, Google C fell by 1.02%, Meta fell by 0.11%, Broadcom rose by 1.25%, and Tesla fell by 2.23%. US fintech company Chime saw its shares rise by 37.44% on its first day of trading. Among Chinese ADRs, the Nasdaq Golden Dragon China Index fell by 0.41%. Most popular Chinese ADRs declined. XPeng Motors fell by 5.87%, NIO fell by 3.21%, Li Auto fell by 1.8%, Alibaba fell by 1.45%, New Oriental fell by 0.96%, and JD.com fell by 0.36%. Zai Lab rose by 3.94%, Kingsoft Cloud rose by 3.74%, Tencent Music rose by 1.29%, Baidu rose by 0.3%, and Pinduoduo rose by 0.26%. Company News [Trump Signs Resolution to Block California's Plan to Ban Sales of New Gasoline-Powered Cars] US President Trump signed a resolution at the White House on the 12th to block California's plan to be the first state in the US to ban sales of new gasoline-powered cars by 2035. [Apple Plans to Upgrade Long-Delayed AI Siri in Spring 2026] Apple plans to upgrade its long-delayed AI Siri in spring 2026. The company hopes to include new Siri features in the iOS 26.4 software. [Jensen Huang: Autonomous Driving and Robots Will Take Off in the Next Few Years] Nvidia CEO Jensen Huang said on Thursday that autonomous vehicles and robotics technology will flourish in the next few years. Nvidia plays an important role in advancing the development of autonomous vehicles, providing both hardware and software solutions. Musk expressed a similar view to Huang's last month, stating that for Tesla, the most important things in the long run are autonomous driving and the humanoid robot "Optimus." [Lisa Su: AI Chip Market Size to Exceed $500 Billion by 2028] AMD CEO Lisa Su said that the AI chip market size will exceed $500 billion by 2028, and the inference chip market will grow even faster. Musk's AI startup xAI uses AMD's MI300 AI chips, and AMD has launched the MI350 and MI355 chips. The MI400 chip will be launched next year. [Coinbase: Will Launch Its First Credit Card, Coinbase One Card, on American Express's Network] Cryptocurrency exchange Coinbase announced that it will launch its first credit card, the Coinbase One Card, on American Express's network. This card is exclusively for Coinbase One members in the US. Each purchase transaction will earn up to 4% cashback in Bitcoin. More information will be disclosed in the fall of 2025. [Adobe's Q2 revenue was $5.87 billion, exceeding expectations] Adobe's Q2 revenue was $5.87 billion, compared to analysts' expectations of $5.80 billion. The adjusted EPS for Q2 was $5.06, compared to analysts' expectations of $4.98. The company is expected to generate annual revenue of $23.5 billion to $23.6 billion, up from its original forecast of $23.3 billion to $23.55 billion. The company expects Q3 revenue to be $5.88 billion to $5.93 billion, compared to analysts' expectations of $5.88 billion. The company expects Q3 digital media revenue to be $4.37 billion to $4.40 billion, compared to analysts' expectations of $4.34 billion.

On Tuesday (June 10), the three major US stock indices collectively rose, all closing at their highest levels in at least three months, with the S&P 500 and Nasdaq both recording a three-day winning streak. By the close, the Dow Jones Industrial Average rose 0.25% to 42,866.87 points; the S&P 500 rose 0.55% to 6,038.81 points; and the Nasdaq Composite Index rose 0.63% to 19,714.99 points. Traders are closely monitoring the progress of US-China negotiations. Previously, strong earnings reports from US publicly listed firms and a recent series of AI-related news had driven a rebound in tech stocks, boosting the overall US stock market. Jay Woods, Chief Global Strategist at Freedom Capital Markets, said, "Technically, the stock market is performing well, breaking through key levels and getting back on track. At the beginning of the week, the index was slightly above the downtrend line and is now rebounding towards its year-to-date high." Woods added, "This rebound looks similar to many tech stocks trying to return to their all-time highs. The good news is that even the weaker sectors seem to have found a soft landing spot, and from a risk/reward perspective, it's a good entry point now." The US CPI report is scheduled to be released before the market opens on Wednesday, with expectations that inflation may rise slightly. A survey by 22V Research showed that 42% of investors believe the market's reaction to the CPI data will be "risk-on," the first time the market has leaned towards risk-taking since last August. Mark Malek, Chief Investment Officer at Siebert Financial, said, "The US Fed is worried that the true inflationary effects have not yet materialized. Given the current complex tariff situation, we expect to see initial signs of tariff-driven inflation in goods such as cars, clothing, and food." Performance of Popular Stocks Most large-cap tech stocks rose, with Nvidia (by market cap) up 0.93%, reclaiming its position as the world's largest company by market cap; Microsoft down 0.39%, Apple up 0.61%, Amazon up 0.29%, Alphabet Class C up 1.34%, Meta up 1.2%, and Broadcom up 0.14%. Tesla rose 5.67%, and after a sharp rebound over three consecutive days, its market cap returned to above $1 trillion. Chip stocks generally strengthened, with the Philadelphia Semiconductor Index rising 2.06%. Among the 30 constituent stocks, only Marvell Technology (-0.43%) declined. Intel rose 7.81%, its largest single-day gain in two months, closing at $22.08, a level not seen since May 13. Novo Nordisk rose 5.13%. According to media reports citing sources, activist hedge fund Parvus Asset Management is increasing its stake in Novo Nordisk. "Stablecoin first stock" Circle fell by 8.1%, after surging over 270% in the three days since its listing. Among US-listed Chinese stocks, the Nasdaq Golden Dragon China Index rose by 0.3%. The performance of popular US-listed Chinese stocks was mixed, with Legend Biotech up 8.22%, NIO up 5.83%, New Oriental up 2.6%, XPeng Motors up 1.59%, Pinduoduo up 0.76%, and Alibaba up 0.33%. On the other hand, CHAGEE fell by 6.44%, Pony.ai fell by 5.29%, Li Auto fell by 3.57%, Baidu fell by 1.32%, Tencent Music fell by 0.92%, and JD.com fell by 0.44%. Corporate News [Starbucks Launches Microsoft Azure OpenAI Assistant for Baristas] Starbucks has introduced a generative AI assistant created using Microsoft Azure's OpenAI platform. The technology will be rolled out to stores in the US and Canada in fiscal year 2026. As part of its turnaround plan, Starbucks has been working to streamline baristas' work and speed up service in its cafes. [OpenAI Reportedly Plans to Partner with Google Cloud for Cloud Computing] According to media reports, sources familiar with the matter revealed that OpenAI plans to collaborate with Alphabet's Google Cloud to meet its growing computing needs. The two sides began discussions several months ago and finalised the agreement in May. This partnership not only demonstrates OpenAI's need for a diversified supply chain but also symbolises its gradual reduction of reliance on its major supporter, Microsoft. [Morgan Stanley CEO: Equity Capital Market Activity Expected to Gradually Rebound] The CEO of Morgan Stanley stated that there has been a recent rebound in deal announcements, and equity capital market activity is expected to gradually rebound, with recent deals performing well. He also expects a strong finish to the current quarter, with a stable deal pipeline showing growth in certain regions.

The latest strategic viewpoints from the top ten securities firms have just been released, as detailed below: Soochow Securities: June may mark the starting point of a new round of "East Rising, West Declining" trades The US dollar cycle is pivotal to the "East Rising, West Declining" trade. Historical experience shows that during periods of global liquidity easing and a weakening US dollar, non-US assets tend to strengthen, and the Chinese market will also benefit. Looking ahead, a weak US dollar remains the baseline assumption. Due to multiple factors such as ongoing disruptions from Trump's policies, the US government's debt pressure, and potential risks in the fundamentals, the US dollar is expected to trend weaker. Since the US dollar index turned down again in mid-May, it has once again fallen below the 100 mark. It is judged that the US dollar will continue to decline in June, possibly breaking below the previous low. The liquidity spillover driven by a weak US dollar will lead the A-share market to embark on a new round of "East Rising, West Declining" trades. In recent years, the value/growth style of the A-share market has been increasingly influenced by the US dollar cycle, specifically showing that growth stocks tend to outperform during periods of a weak US dollar. As June approaches, the technology sector will witness a series of catalytic events, and its prospects are expected to remain robust. Meanwhile, the valuations and liquidity of growth stocks will also benefit from a weak US dollar environment, potentially exhibiting better resilience. In terms of specific allocation directions, the main themes and industrial trends to focus on include: AI edge devices (including AI phones, AI glasses), AI large models, humanoid robots, controllable nuclear fusion, deep-sea technology, and autonomous driving. Zhongtai Securities: Maintaining the "switch from high to low" viewpoint at the current juncture The current market is at a critical period marked by the interplay of domestic and foreign policy variables. Domestically, the "15th Five-Year Plan" sets the tone, and reforms in public funds may reshape the market. Externally, intensifying tariff disputes between Europe and the US, as well as increased policy uncertainty within the US, will all have complex impacts on the market. At the current juncture, the "switch from high to low" viewpoint is still maintained, with a relatively optimistic stance on the technology sector. The overall market is expected to continue rotating rapidly among various hot topics in Q2. Investors should avoid chasing highs and instead focus on bottom-fishing opportunities, with this allocation logic remaining unchanged. 1) While maintaining a base portfolio of stable assets such as dividend stocks, gold, long-term bonds, and blue chips, focus on opportunities to bottom-fish in safety-related assets and technology stocks; 2) The high growth momentum in upstream AI computing power, servers, etc., as seen from Q1 earnings reports, is expected to continue into H2. Moreover, the update of the new version of DeepSeek may trigger investors' risk appetite for the technology sector; 3) The Trump administration has recently intensified technology restrictions on industries such as chips, coupled with China's increased emphasis on technology at the policy level. Among these, the direction of domestic substitution, represented by semiconductors, will also present certain opportunities. Overall, in Q2, the fundamentals of core city real estate and other endogenous momentum are gradually showing a "turning point," but total data may remain resilient under the "rush to switch exports." Current overall policies still maintain strong determination, but there is a high level of attention on the capital market, which may provide some support to the market. Hua Jin Securities: June Continues to Fluctuate Upward with Technology and Consumption Remaining the Main Themes In June, A-shares may continue to fluctuate upward. (1) Policies in June may be more proactive, with some uncertainty regarding external events. First, positive policies in June may accelerate implementation. Second, external events such as Sino-US tariff negotiations in June face some uncertainty. (2) The fundamentals in June may continue to improve. First, economic data in June may continue to show strength: firstly, the Dragon Boat Festival holiday and the "618" shopping season may keep consumption growth at a high level; secondly, overseas restocking may lead to a rebound in export growth in June; finally, accelerated policy implementation may maintain high growth in manufacturing and infrastructure investment in June, although real estate investment growth remains weak. Second, profit growth in June may continue to be in a recovery cycle. (3) Liquidity in June may remain loose. First, repeated expectations of interest rate cuts overseas have limited impact on domestic easing. Second, the inflow of funds into the stock market in June may improve; historically, foreign and margin financing flows tend to increase in June; after the holiday, margin financing and foreign capital may also return. Technology and consumption remain the main themes, with some core assets and cyclical sectors possibly offering investment opportunities. First, new consumption is likely to generate excess returns in June; second, policy encouragement points to TMT and consumption, with high-growth industries mainly concentrated in non-ferrous metals, TMT, and machinery. It is recommended to continue to allocate on dips: first, sectors with upward policy and industry trends such as computer (domestic software, autonomous driving), robotics, military, media (AI applications, gaming), electronics (semiconductors), and communications (computing power); second, sectors where fundamental expectations may marginally improve, including innovative drugs, electric vehicles, food, social services, trade retail, non-ferrous metals, and chemicals. China Galaxy: Technology Will Remain the Medium and Long-Term Investment Theme Recently, the sector rotation speed has increased, and the market's volatile pattern has not changed, with no significant increase in trading volume, still dominated by existing players. There is considerable uncertainty in the external market. On May 29, the US Federal Circuit Court of Appeals granted the Trump administration's request to temporarily suspend the previous ruling by the US International Trade Court. Although a phased tariff agreement between China and the US has been reached, temporarily alleviating trade pressure, the Trump administration's policies remain unpredictable. In the short term, the market may continue to maintain a fluctuating trend. Attention should be paid to changes in external tariffs and the pace of domestic policy implementation. With the support of a series of domestic policies, the market's adjustment space is limited. Meanwhile, several major financial policies are expected to be announced during the Lujiazui Forum from June 18 to 19, which are likely to support market expectations. It is recommended to focus on structural opportunities. In the long term, the trend of the A-share market will still reflect the principle of "taking our own path as the main focus". As the Central Huijin Investment Ltd. effectively plays the role of a "stabilization fund" and policies vigorously promote the entry of medium and long-term funds into the market, the A-share market will have a more solid foundation for stable operation. Allocation opportunities across three main themes: First, assets with a relatively high safety margin. Against the backdrop of significantly increased uncertainty in the external environment, the dividend sector, which has relatively strong earnings certainty and overall stable dividend returns, possesses defensive attributes. Second, the logic of the "technology narrative" in the A-share market is clear. The revised restructuring measures will help promote the participation of early-stage technology innovation enterprises in mergers and acquisitions. Technology will remain the main theme for medium and long-term allocation, with short-term focus on sub-sectors with lower valuations. Third, the big consumption sector boosted by policies. Economic data for April shows that the trade-in policy for consumer goods continues to be effective. Recently, the concept of new consumption has been repeatedly active. As uncertainty in the external environment increases, expanding domestic demand has become a long-term strategic move, highlighting the importance of boosting consumption. Dongguan Securities: The market's overall risk appetite is expected to receive systematic support. From the perspective of the market environment in June, overseas, the US tariff policy has been fluctuating, and the subsequent path of interest rate cuts by the US Fed will highly depend on subsequent economic data and tariff negotiation progress. Domestically, with the easing of Sino-US trade disputes, the implementation of a series of incremental policies by the "one bank, one bureau, one commission", and the concerted efforts of all parties to promote the effective implementation of established policies and accelerate the strengthening of incremental policy reserves, all these provide strong support for the domestic economic fundamentals. In the capital market, the current concerted efforts to stabilize the capital market have injected key momentum into boosting investor confidence. Looking ahead to June, as Sino-US trade relations tend to ease, quasi-stabilization funds have played a crucial supporting role in hedging tail risks in the market. With the concerted efforts of all parties to promote the effective implementation of established policies, accelerate the strengthening of incremental policy reserves, and the continuous entry of medium and long-term funds into the market, it is expected to continuously improve the market's microstructure and enhance investor confidence. Against the backdrop of the combined forces of policies and funding, the market's overall risk appetite is expected to receive systematic support. However, considering that there may be certain selling pressure above, the market may continue to fluctuate in the short term. In the medium term, supported by the economy's resilience and the accumulation of policy tools, the broader market still has upward momentum. Sector Allocation: Overweight financials, utilities, non-ferrous metals, and TMT. BOC Securities: Exports May Exceed Expectations This Year From overseas industry inventory perspectives, most sectors are in the mid-stage of restocking except midstream industries like automobiles, machinery equipment, and transportation equipment. Downstream consumer goods-related sectors show more pronounced restocking, reflecting resilient overseas demand. Leading indicators suggest short-term overseas restocking demand will likely persist, with potential for exports to surpass expectations this year. Market-wise, since May, sectors tied to external demand have outperformed. The Geneva agreement between China and the U.S. temporarily boosted market sentiment, while April's stronger-than-expected exports corrected overly pessimistic expectations. Subsequent uncertainties around export and external demand strength remain the market's focus. Unlike 2018, tariff policies now pose significantly reduced impacts on domestic fundamentals and markets. Fundamentally, ample policy buffers mitigate economic downside risks, with domestic demand data and tariff progress influencing policy expectations. Market-wise, upside room depends on economic recovery strength, while "quasi-stabilization funds" contain downside risks. Uncertainty from Trump-era trade policies may prolong "diversion trade," with resilient demand potentially driving exports above expectations and strengthening external demand chains. GF Securities: China-U.S. Relations, Fiscal Stimulus, and DeepSeek's Tech Breakthrough May Trigger A-Share Market Breakout After April's oversold rebound, A-shares fluctuated rangebound near pre-reciprocal tariff levels, with only innovative drugs showing sectoral trends amid mostly thematic rotations. Looking ahead, China-U.S. relations, fiscal stimulus, and DeepSeek's tech milestone could serve as key triggers to escape this tight range. Absent domestic fiscal or bilateral progress, tech sector developments may prove pivotal. After three months of adjustment, tech stocks—especially AI-related segments—now meet prerequisites for a rebound: 1) TMT turnover ratios hover at the lower bound of 2023's AI narrative range, signaling potential momentum; 2) Since April's reciprocal-tariff rebound, margin balances stagnated at yearly lows, leaving room for incremental funding. Thus, June's concentrated tech giant product launches may prove decisive. Ping An Securities: New Quality Momentum Gathers Strength, Tech Growth Breaks Through Overseas, the US tariff policy faces multiple uncertainties from domestic judicial rulings and external negotiations, while Nvidia's Q1 results exceeded expectations again. Domestically, the manufacturing sector's prosperity margin rebounded in May, with high-tech industry profits showing positive trends; expectations for financial policies have increased. Overall, the current changes in the external environment still carry uncertainties, and the importance of self-reliance and controllability in domestic technology and the resilience of domestic demand continue to rise. Domestic policy support and the positive development of industries towards innovation are expected to continue to support the medium-term upward potential of the equity market. Structurally, attention should be paid to two main lines: First, the growth style represented by domestic technology and high-end manufacturing, such as the defense and military industry with upward industry prospects, and the direction of self-reliance and controllability in technology represented by semiconductors; second, high-quality consumer assets (new consumption/pharmaceutical and biological, etc.) that benefit from policies supporting the expansion of domestic demand. Huaxi Securities: A-shares in June Still in a Window Period for Market Recovery A-shares in June remain in a window period for market recovery. Recently, market trading sentiment has pulled back, mainly due to the repeated changes in the US tariff policy overseas. In addition, the slow pace of Sino-US trade negotiations may partly be due to tactical considerations in negotiations. Subsequent Phase II Sino-US consultations will remain a key influencing factor for market risk appetite. On the other hand, the strength of domestic medium and long-term patient capital is growing. By promoting the construction of long-term market stabilization mechanisms and signaling regular "market support," regulators will strongly support the bottom range of A-shares. ·In terms of industry allocation, maintain a moderately balanced allocation. Attention should be paid to precious metals, public utilities, new consumption, AI applications (software, hardware), etc. In terms of themes, attention should be paid to: military industry, self-reliance and controllability, mergers and acquisitions, etc. Everbright Securities: Consumption is Expected to Remain One of the Key Momentums for Economic Recovery The most severe period of short-term external risk disturbances may have passed, but vigilance is still needed regarding potential reversals in Trump's subsequent policies. Recently, domestic policies have remained actively implemented, and it is expected that subsequent policies will continue to be rolled out. With the US and China hitting the "pause" button on "reciprocal tariffs" for 90 days, exports may maintain high growth in the short term, and consumption is expected to remain one of the key momentums for economic recovery. Amidst the interplay of internal and external factors, it is expected that the index will remain volatile overall in June. Definite Main Lines: 1) Domestic consumption. Expanding domestic demand has been a key focus of recent domestic policies, and it is expected to continue to receive policy catalysts in the future. In addition, the overall performance of the consumer industry is more resilient. Attention should be paid to industries such as household goods, food processing, professional services, and leisure food. 2) Domestic substitution. Attention should be paid to two clues: performance certainty and thematic investment. The former focuses on industries with a high proportion of imports from the US and strong domestic supply capabilities, including publishing, decoration materials, etc. The latter focuses on industries with a high proportion of imports from the US but with domestic supply capabilities expected to improve, such as aviation equipment, medical devices, animal health, and chemical pharmaceuticals. 3) Underallocated sectors by funds: The "Action Plan for Promoting the High-Quality Development of Public Funds" may have a profound impact on the asset allocation of the fund industry. Some sectors that are underallocated by funds are worth paying attention to in the medium and long-term, including banking, non-banking financial services, utilities, transportation, and other industries. However, in the short-term, it is necessary to be cautious about the potential expectation deviations that may arise from over-interpretation.

On Wednesday, Eastern Time, the three major US stock indices weakened in late trading and closed collectively lower as investors digested the minutes of the US Fed meeting and awaited the earnings report of Nvidia, a leader in artificial intelligence. The meeting minutes released by the US Fed during the trading session showed that officials believed they might face a "difficult trade-off" in the coming months, with both inflation and unemployment rising, and that heightened economic uncertainty justified a cautious monetary policy. Peter Cardillo, chief market economist at Spartan Capital, commented that the market was stagnant today, and the Fed's meeting minutes did not reveal anything new. They basically indicated that the Fed was in a wait-and-see mode, trying to learn more about the impact of trade policies. Notably, Trump defended the popular "TACO" trade in the market on Wednesday. Trump was angered by this narrative, calling it the most annoying issue, and said his repeated retreats were part of a trade compromise strategy. "This is called negotiation," Trump said. As part of the negotiation, he intentionally set an outrageously high number and then slightly lowered it. TACO stands for Trump Always Chickens Out. In this trade, investors buy the dip after Trump issues tariff threats, and the stock market will rebound when he eventually softens his tone. The positive impact of easing US-European trade tensions is fading, and investors' focus has shifted to Nvidia's earnings report, a major event for the global financial market. Investors have high hopes for the leading company riding the wave of the artificial intelligence technology boom. However, there are also concerns that Nvidia's stock price may have risen too high, despite its basically stagnant performance this year. In the bond market, the yield on 10-year US Treasuries rose to 4.47% from 4.43% at the end of trading on Tuesday. US Treasury yields were volatile last week, unsettling global markets, partly due to concerns about the rapid rise in the US government's debt levels. This volatility also affected Japan, with a poor performance in the auction of 40-year Japanese government bonds on Wednesday. The latest US Fed meeting minutes showed that some rate-setters noted the decline in the prices of US Treasuries, stocks, and the US dollar in the weeks after Trump announced sweeping tariffs on trading partners. "These participants pointed out that the continued shift in these correlations, or the weakening of the status of US assets as a safe haven, could have long-term implications for the economy," the minutes said. Market Dynamics At the close, the Dow Jones Industrial Average fell 244.95 points, or 0.58%, to 42,098.70; the Nasdaq Composite dropped 98.23 points, or 0.51%, to 19,100.94; and the S&P 500 index declined 32.99 points, or 0.56%, to 5,888.55. Among the 11 sectors of the S&P 500, the consumer discretionary sector fell by 0.94%, the information technology/technology sector declined by 0.34%, the energy sector dropped by 1.25%, and the financial sector decreased by 0.7%. Performance of Popular Stocks Most large-cap tech stocks closed lower, with Tesla down 1.65%, Microsoft down 0.72%, Amazon down 0.63%, Nvidia down 0.51%, Alphabet Class A down 0.31%, Apple up 0.1%, and Meta up 0.23%. Shares of Joby Aviation, a US electric air taxi company, surged nearly 29% after it received its first strategic investment worth $250 million from Toyota Motor Corporation. Synopsys fell nearly 10%, and Cadence dropped 10.67% following reports that the US Department of Commerce would introduce new policies targeting semiconductor software designers. Most popular Chinese ADRs closed lower, with the Nasdaq Golden Dragon China Index down 0.71%. Niu Technologies rose over 3%, while Alibaba and JD.com fell over 2%, and iQIYI dropped over 4%. Company News [Apple Reportedly Plans to Overhaul OS Naming Convention, Using Years Instead of Version Numbers] Apple Inc. plans to make its most comprehensive adjustment to the naming of its operating systems yet, as part of a software overhaul that will extend to all its devices. According to people familiar with the matter, Apple's next-generation operating systems will be named after years rather than version numbers. Anonymous sources indicated that this means the current iOS 18 will give way to "iOS 26". Other system updates will also be called iPadOS 26, macOS 26, watchOS 26, tvOS 26, and visionOS 26, respectively. Apple's move aims to achieve branding consistency and move away from current practices that may confuse users and developers. Today's operating systems—including iOS 18, watchOS 12, macOS 15, and visionOS 2—use different version numbers, so their initial releases are not simultaneous. [OpenAI Executive: Restructuring Paves the Way for IPO, Decision Depends on Market and Company Development] Sarah Friar, the Chief Financial Officer of OpenAI, said on Wednesday that the company's restructuring plan lays the groundwork for a potential future initial public offering (IPO), but whether to proceed with an IPO will depend on the conditions of the public market and the company's own readiness. "The structure of a public benefit corporation positions us for an IPO...if we want to and are ready," she said. [ExxonMobil CEO: Company Will Stick to Investment Plans Even if Oil Prices Fall to $50] Darren Woods, the CEO of ExxonMobil, stated that the company will maintain its capital allocation plans unchanged even if oil prices fall to $50 per barrel. Woods said that at the end of last year, the Texas oil giant conducted stress tests on its business under "more punishing conditions" than the current environment and presented the results to the board. The outcome was that even if oil prices fall from the current $65 per barrel, the company will continue to invest in new projects and return cash to shareholders. Despite the company's flexibility, Woods said, "We don't see a need to make changes even if oil prices drop as low as $50 per barrel." "To achieve differentiated long-term value, we must invest in profitable growth and favorable investment opportunities," he added. [Nvidia's net profit in the first fiscal quarter was $18.78 billion, up 26% YoY] Nvidia's revenue in the first fiscal quarter was $44.1 billion, up 69% YoY, exceeding market expectations of $43.29 billion. Data center revenue in the first fiscal quarter was $39.1 billion, up 73% YoY, exceeding the estimate of $39.22 billion. Net profit in the first fiscal quarter was $18.78 billion, up 26% YoY. Nvidia expects revenue in the second fiscal quarter to be around $45 billion, with a 2% fluctuation, while analysts expect $45.5 billion.

On Tuesday, Eastern Time, the three major US stock indices closed collectively higher, as Trump's postponement of tariff hikes on the EU and a significant rebound in the US consumer confidence index boosted investors' risk appetite. Earlier, Trump posted on social media that he had extended the deadline for imposing additional tariffs on EU goods, stating that European Commission President Ursula von der Leyen had requested the extension. On Monday, the EU's chief trade negotiator said he had a "positive call" with the Trump administration and expressed the EU's commitment to reaching a trade agreement before the July 9 deadline. Paul Nolte, a senior wealth advisor and market strategist at Murphy and Sylvest, commented that Trump's tough actions on April 2 had caused significant market panic, prompting investors to sell off assets rapidly and aggressively, but the market subsequently rebounded quickly. Nolte added, "Investors now have a bit of an understanding of Trump. He's like a poker player at the table; you know he'll make some bets, but when other players pressure him, he folds." In terms of economic data, figures released by The Conference Board on Tuesday showed that the US consumer confidence index rose 12.3 points to 98 in May, well above the expected 87 and the previous 86. This marked the first monthly increase since November last year and the largest monthly gain since March 2021. Richmond Fed President Thomas Barkin stated that people are observing policy uncertainties, and there is no evidence that declining sentiment is affecting consumer spending. This aligns with the views of many US Fed officials, who expect key interest rates to remain unchanged until the full impact of Trump's tariffs is determined. Market Movements At the close, the Dow Jones Industrial Average rose 740.58 points, or 1.78%, to 42,343.65; the Nasdaq Composite gained 461.96 points, or 2.47%, to 19,199.16; and the S&P 500 index advanced 118.72 points, or 2.05%, to 5,921.54. Among US sector ETFs, the Global Jets ETF closed up 3.92%, the Semiconductor ETF rose 3.17%, the Consumer Discretionary Select Sector SPDR Fund gained 2.95%, and the Technology Select Sector SPDR Fund, Regional Bank ETF, Bank ETF, and Global X Cloud Computing ETF each rose at least 2.22%, with the Utilities Select Sector SPDR Fund being the worst performer, up 0.87%. Among the 11 sectors of the S&P 500, the Consumer Discretionary sector rose 3.04%, the Information Technology/Technology sector gained 2.55%, and the Communication Services sector increased 2.14%. Performance of Popular Stocks Major tech stocks generally rose, with Nvidia up 3.21%, Alphabet (Google A) up 2.63%, Apple and Amazon each up at least 2.5%, Meta up 2.43%, and Microsoft up 2.33%. Tesla's shares surged nearly 7% after Elon Musk posted on social media platform X that he had returned to a state of working "24/7" or sleeping in conference rooms, server rooms, or factory spaces. Trump Media & Technology Group fell more than 10% after the company announced it had signed subscription agreements with 50 institutional investors to issue $1.5 billion worth of common stock and $1 billion worth of zero-coupon convertible bonds, with the conversion price 35% higher than the current market price. The offering is expected to close around May 29. With the $2.5 billion raised from the financing, the company plans to establish a Bitcoin reserve. Pinduoduo fell more than 13%. In its recently released first-quarter earnings report, Pinduoduo achieved revenue of 95.67 billion yuan, up 10% YoY (vs. an estimated 101.6 billion yuan); adjusted net profit was 16.92 billion yuan, down 45% YoY (vs. an estimated 27.88 billion yuan). The Nasdaq Golden Dragon China Index fell 0.28%, with most popular Chinese ADRs declining. Bilibili rose more than 2%, while Zhihu, New Oriental, and iQIYI rose more than 1%. Li Auto and JD.com fell more than 2%, while XPeng Motors and NIO fell more than 3%. Corporate News [FDA Halts Rocket Pharma's Gene Therapy Trial] Following the death of a patient due to severe complications, the US Food and Drug Administration (FDA) announced the suspension of a pivotal Phase 2 clinical trial for Rocket Pharma's gene therapy for Danon disease. Affected by this news, Rocket Pharma's shares closed down more than 60% on Tuesday. According to an announcement released by Rocket Pharma on Tuesday, the patient who unfortunately passed away received treatment in early May but developed complications related to capillary leak syndrome. The FDA halted the relevant clinical trial last Friday before the patient's death. At that time, Rocket was testing its gene therapy drug RP-A501, primarily for the treatment of Danon disease, a rare genetic disorder that causes myocardial damage and progressive muscle weakness. Currently, Rocket is investigating the specific cause of death, focusing on a new immunosuppressant recently added to the treatment regimen to enhance patient safety. [Texas Governor Signs Law to Implement Age Verification for Apple and Google App Stores] Texas Governor Greg Abbott signed a bill requiring Apple and Google to verify the ages of users on their app stores, making the second-most populous US state a focal point in the debate over whether and how to regulate children's and adolescents' use of smartphones. Another legislative draft has passed the Texas House of Representatives and is awaiting Senate approval, which would restrict the use of social media applications by users under 18. [Apple Plans to Launch a Dedicated Video Game App for Its Devices] Apple is planning to launch a dedicated video game app on its devices, which will be pre-installed on iPhones, iPads, Macs, and Apple TVs later this year. The app will serve as a game launcher, centralizing in-game achievements, leaderboards, communication history, and other activities, while also providing editorial content, access to the App Store's gaming section, and promoting the Arcade subscription service. This app will replace the existing Game Center and is part of Apple's efforts to enhance the gaming experience on its devices. Currently, games and in-app purchases contribute approximately two-thirds of the App Store's revenue. [Meta is Restructuring Its AI Team to Accelerate the Launch of New Products and Features] Meta Platforms is restructuring its AI team to accelerate the launch of new products and features. In an internal memo released on Tuesday, Chief Product Officer Chris Cox announced that the new structure will divide the team into two branches: ① AI Product Team: Led by Connor Hayes, responsible for the development of the Meta AI assistant, AI Studio tools, and AI features within Facebook, Instagram, and WhatsApp. ② General AI Foundation Team: Co-led by Ahmad Al-Dahle and Amir Frenkel, covering Llama model R&D, inference capability enhancement, multimedia and speech technologies, etc. The company's original AI research division, FAIR (Fundamental AI Research), will remain independent, but a specific team focused on multimedia technologies will be merged into the newly established AGI Foundation Team.

Xiaomi's Earnings Preview: Net Profit May Double, Achieving Another Outstanding Performance. According to a survey by VisibleAlpha, Xiaomi's net profit in Q1 2025 may reach 8.23 billion yuan, doubling that of the same period last year. Revenue may increase 44% YoY to 109.06 billion yuan. Key focuses of the earnings report and conference call include: the launch and selling price announcement of the new car model, Xiaomi YU7, the smartphone business and its overseas expansion, as well as the growth of the IoT business in the Chinese market and the possibility of its gross profit margin reaching a record high. Jefferies believes that Xiaomi's smartphone market is growing and may expand further. Daiwa believes that Xiaomi's IoT business has shown strong growth in the Chinese market.

SMM News on May 21: In recent trading days, the automotive sector has seen consecutive gains, achieving four straight days of increases as of May 21. By the close of trading on May 21, the automotive sector index rose by 1.06%. Among individual stocks, JAC surged by over 8%, JMC rose by over 6%, while multiple stocks including King Long United Automotive Industry, Seres, and Hanma Technology followed suit with gains. On the news front, Recently, the Central Committee of the Communist Party of China and the State Council issued the revised "Regulations on Practicing Frugality and Combating Waste in Party and Government Offices," which stipulates centralized procurement of official vehicles, requiring all regions and departments to strictly comply. In this revised version, the management of official vehicles has become a major highlight, explicitly stating that official vehicles should be procured centrally by the government, with a preference for domestically produced vehicles, and priority given to new energy vehicles (NEVs). This move aims to further promote frugality and combat waste in Party and government offices, while also facilitating the green development of the domestic automotive industry. In recent years, the state has also introduced multiple policies to support the development of NEVs, with the promotion of NEVs frequently appearing in the field of official vehicles. Meanwhile, local governments have been continuously issuing relevant supportive policies. According to publicly available information, previously, regions including Shandong and Hainan have required achieving 100% electrification of official vehicles by 2025 (except for special purposes). The General Office of the People's Government of Guangdong Province has also mentioned that the proportion of pure electric vehicles (EVs) in the total number of vehicles equipped and updated in the same year for Party and government offices and public institutions at the provincial level and in the Pearl River Delta region should be no less than 95%. Other cities should refer to the promotion targets of the Pearl River Delta region and determine their own promotion targets based on local conditions. State-owned enterprises should refer to the aforementioned requirements to purchase and use NEVs, and take measures such as building, renovating, or leasing charging and battery swapping facilities to encourage employees to purchase and use NEVs. Shanghai also issued a policy in 2024 stating that by 2027, the proportion of green transportation trips in the central urban area should exceed 75%. Accelerate the comprehensive electrification of vehicles in urban public sectors, with buses and taxis basically achieving electrification by 2025. In principle, new or updated vehicles in public sectors such as Party and government offices, state-owned enterprises and institutions, environmental sanitation, and postal services should use NEVs. Encourage the use of NEVs for new or updated vehicles in urban freight trucks, rental cars, and intra-city charter buses with suitable models. Promoting the electrification of official vehicles can, on the one hand, enhance public acceptance of NEVs through government demonstration, thereby indirectly stimulating the civilian market. On the other hand, it can also significantly reduce operating costs. It is reported that the annual operating cost of new energy official vehicles in Chengdu is approximately 25,000 yuan less per vehicle compared to internal combustion engine vehicles. The market expects that with the continuous deepening of subsequent local policies, there is still greater room for growth in the application of NEVs in the official vehicle market. In addition, Li Chao, Deputy Director of the Policy Research Office and spokesperson of the National Development and Reform Commission (NDRC), stated that in April, retail sales of passenger NEVs reached 905,000 units, up 33.9% YoY; the retail penetration rate of NEVs reached 51.5%, a 7 percentage point increase YoY. Regarding the recent automotive market, according to the China Passenger Car Association (CPCA), from May 1 to 18, nationwide retail sales of passenger NEVs reached 484,000 units, up 32% YoY and 15% MoM; the retail penetration rate of the nationwide NEV market was 52%, with cumulative retail sales of 3.808 million units since the beginning of the year, up 35% YoY. From May 1 to 18, nationwide wholesale sales of passenger NEVs by producers reached 467,000 units, up 23% YoY and 0% MoM; the wholesale penetration rate of NEV producers was 54.4%, with cumulative wholesale sales of 4.448 million units since the beginning of the year, up 40% YoY. On May 21, according to the latest statistics from TrendForce, global sales of new energy vehicles, including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hydrogen fuel cell vehicles, reached 4.02 million units in the first quarter of 2025, up 39% YoY, accounting for 18.4% of global auto sales in the first quarter. In terms of individual stocks, although BYD, the leader in the EV sector, did not see a significant increase in its share price today, its share price reached a record high, surging to 404 yuan per share at one point during the trading session, marking a new all-time high since its listing. It is also worth mentioning that, according to media reports, in the recently released Q1 2025 earnings reports of A-share vehicle manufacturers, BYD ranked first with a net profit exceeding 9.1 billion yuan. According to Q1 financial data, BYD's net profit in the first quarter increased by 100.38% YoY. The rapid growth in sales of its NEVs was the main reason for its outstanding performance in the first quarter. It is reported that BYD's cumulative NEV sales in the first quarter reached 1.0008 million units, up 59.81% YoY.