Morning News

Source: Wall Street News

Market Overview

The U.S. CPI cooled. Chip stocks supported the S&P 500 to erase its year - to - date losses. The Nasdaq rose more than 1%. Among the seven tech giants, only Microsoft closed lower. The Trump administration revoked the AI chip restrictions imposed during the Biden administration, and the chip index rose more than 3%. NVIDIA closed higher for two consecutive days, with an increase of over 5% each day. UnitedHealth, which suddenly announced the resignation of its CEO, plunged nearly 18%, leading the Dow down. Coinbase, which will be included in the S&P, rose 24%.

The China - concept index declined. JD.com rose more than 3% after its earnings report. The German stock market hit new all - time highs for three consecutive days.

After the release of the U.S. CPI, the yield on U.S. Treasuries fell briefly, but then rebounded. The U.S. dollar index accelerated its decline from a four - week high. The offshore RMB broke through 7.18 during trading, hitting a five - month high, and then fell back for a while.

Crude oil rose for four consecutive sessions. U.S. oil rose nearly 3% and closed at a three - week high. Gold futures rose more than 1% at one point.

During the Asian session, A - shares opened high and then declined. The Shanghai Composite Index closed slightly higher by 0.17%. Shipping and port stocks saw a wave of涨停. The Hang Seng Index ended its eight - consecutive - day gain. The trend of pharmaceutical stocks reversed, and most government bonds closed higher.

Top News

After China and the U.S. reached a tariff agreement, foreign investment banks have successively raised their growth forecasts for the Chinese economy.

Trump: The market will rise much higher. There is no inflation, and the Federal Reserve must cut interest rates.

U.S. inflation cooled. The CPI in April was up 2.3% year - on - year, the lowest level since February 2021. The "New Fed News Agency": The April CPI did not reflect the tariff shock, and inflationary pressures will emerge in the coming months.

The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce issued a notice stating that it has initiated the revocation of the Biden administration's "Artificial Intelligence Diffusion Rules" and announced additional measures to strengthen global semiconductor export controls.

Saudi Arabia promised to invest $600 billion in the United States, covering military hardware, technology, Boeing aircraft, infrastructure, and data centers. Chip giants are helping Saudi Arabia build an AI factory. NVIDIA will supply 18,000 chips, and AMD is also involved. The United States may allow the United Arab Emirates to import more than one million advanced NVIDIA chips to support OpenAI in building a data center in the UAE. Musk: Starlink has been approved by Saudi Arabia, and he hopes to introduce robotaxis in the future.

Bessent: The EU may have a "collective action problem" in trade. India proposed countermeasures against Trump's tariffs in his second term for the first time, and the Indian stock market fell more than 1%.

JD.com's Q1 revenue and net profit exceeded expectations. The revenue of its new business increased by 18.1%, but the loss doubled. During the earnings call: JD.com's daily order volume for food delivery will exceed 20 million. The Chinese food delivery market "can fully accommodate multiple platforms", and at this stage, more attention is paid to user experience.

Market Closing Quotes

European and American Stock Markets: The Dow Jones Industrial Average fell 0.64%, the S&P 500 Index rose 0.72%, and the Nasdaq rose 1.61%. The European STOXX 600 Index closed up 0.12%.

A - shares: The Shanghai Composite Index rose 0.17%, the Shenzhen Component Index fell 0.13%, and the ChiNext Index fell 0.12%.

Bond Market: The yield on the 10 - year U.S. Treasury note rose 2.37 basis points to 4.4946%. The yield on the two - year U.S. Treasury note rose 0.87 basis points to 4.0190%.

Commodities: WTI June crude oil futures closed up 2.77% at $63.67 per barrel. Brent July crude oil futures closed up 2.57% at $66.63 per barrel. COMEX gold futures rose 0.96% to $3259 per ounce.

Details of Top News

Global Highlights

After China and the United States reached a tariff agreement, foreign - funded investment banks have successively raised their growth forecasts for the Chinese economy. Morgan Stanley has raised its forecast for China's recent quarterly GDP, expecting that enterprises may accelerate exports to take advantage of lower tariffs. J.P. Morgan has raised China's GDP growth rate (quarter - on - quarter annualized growth rate) from the second to the fourth quarter to 3%.

U.S. inflation cooled. The CPI in April was up 2.3% year - on - year, the lowest level since February 2021. The core CPI rose 2.8% year - on - year, the slowest pace since the inflation outbreak in the spring of 2021. Housing costs remain a key factor in inflation, while the prices of air tickets, used cars, and food have declined. Nevertheless, the impact of tariffs has not been fully realized, and enterprises may be digesting inventories.

Trump: The market will rise much higher. There is no inflation, and the Federal Reserve must cut interest rates. On Tuesday, when the S&P 500 index recovered its losses for the year, Trump said that the market rally was wonderful and it would rise much higher. On the same day, citing an inflation report that was weaker than expected earlier in the day, Trump once again pressured Federal Reserve Chairman Jerome Powell to cut interest rates.

"The New Fed News Agency": The April CPI did not reflect the tariff shock, and inflationary pressures will emerge in the coming months. Timiraos said that economists believe that tariffs will end the recent inflation slump and push up prices in the coming months; the "roller - coaster" of tariff policies means that the April inflation data gave the Federal Reserve almost no reason not to remain on the sidelines; if there were no widespread tariffs in April, such data might have been enough to prompt the Federal Reserve to resume rate cuts, and costs may rise in the coming months, perhaps causing the Federal Reserve to remain inactive.

Saudi Arabia promised to invest $600 billion in the United States, covering military hardware, technology, Boeing aircraft, infrastructure, and data centers. The White House said that the United States and Saudi Arabia have reached the largest - ever commercial agreement between the two countries, including $80 billion in cutting - edge technology investment from companies such as Google, DataVolt, and Oracle, $20 billion in AI data center and energy infrastructure investment by DataVolt, a $4.8 - billion Boeing aircraft purchase, and a military hardware sales agreement of nearly $142 billion, the highest amount in history. The Saudi Crown Prince said that Saudi Arabia will strive to increase its investment in the United States to $1 trillion.

Chip giants are helping Saudi Arabia build an AI factory. NVIDIA will supply 18,000 chips, and AMD is also involved. NVIDIA and AMD will supply semiconductor products to Saudi Arabia's artificial intelligence company Humain for its large - scale data center project. NVIDIA will sell more than 18,000 of its latest artificial intelligence chips to Humain. Humain is also collaborating with AMD. AMD said it will provide chips and software for data centers "extending from the Kingdom of Saudi Arabia to the United States", and the project costs $10 billion.

The United States may allow the United Arab Emirates to import more than one million advanced NVIDIA chips to support OpenAI in building a data center in the UAE. Media reports said that it is possible that OpenAI will announce the construction of a data center in the UAE as early as this week during Trump's visit to the Middle East. This project largely depends on obtaining NVIDIA's cutting - edge chips; the Trump administration is considering significantly relaxing the restrictions on NVIDIA's chip sales to the UAE, and some of the NVIDIA chips allowed to be imported by the UAE will be supplied to American companies building data centers in the UAE.

Musk: Starlink has been approved by Saudi Arabia, and he hopes to introduce robotaxis in the future. Tesla CEO Elon Musk said at the 2025 Saudi Investment Forum that Starlink has been approved to provide services for aviation and maritime use in Saudi Arabia. Musk also briefly discussed his other business ambitions in the region and hopes to introduce Tesla's self - driving taxis, Robotaxis, to Saudi Arabia in the future.

Bessent: The EU may have a "collective action problem" in trade. U.S. Treasury Secretary Bessent said on Tuesday that the EU faces a "collective action problem" in trade negotiations, that is, the inconsistent interests of member states lead to slow progress in negotiations. Nevertheless, he believes that the United States and the EU will eventually reach a satisfactory agreement, although the progress is slow. Analysts said that Bessent's mention of the "collective action problem" seems to be an attempt to promote the negotiation process by creating divisions within the EU, but there are no obvious cracks within the EU.

India proposed countermeasures against Trump's tariffs in his second term for the first time, and the Indian stock market fell more than 1%. India proposed to impose import tariffs on some U.S. - made products to counter the tariffs imposed by Washington on Indian - produced steel and aluminum products.

JD.com's Q1 revenue and net profit exceeded expectations. The revenue of its new business increased by 18.1%, but the loss doubled. During the earnings call: JD.com's daily order volume for food delivery will exceed 20 million. The Chinese food delivery market "can fully accommodate multiple platforms", and at this stage, more attention is paid to user experience.

JD.com's net revenue in the first quarter was 301.08 billion yuan, exceeding the estimated 289.44 billion yuan. Adjusted EBITDA was 13.7 billion yuan, a year - on - year increase of 27%. The profitability of its core retail business has been enhanced, and the operating profit margin has increased from 4.1% in the same period last year to 4.9%. The revenue of new businesses, including the food delivery business, increased by 18.1%, but the loss also expanded.

JD.com's food delivery business is developing rapidly, with a daily order volume approaching 20 million. Xu Ran, CEO of JD.com, emphasized during the earnings call that the Chinese food delivery market is huge and "can fully accommodate multiple platforms", and there is still a large amount of unmet demand in the market. She also said that the food delivery strategy is deeply rooted in the JD.com ecosystem, and after short - term investment, long - term synergies will be sought. At this stage, more attention is paid to user experience.

What to look for in the earnings reports of major China - concept companies this week? Tencent's integration of advertising revenue and AI business has become a highlight. Pay attention to the improvement of the click - through rate of AI search advertising products and existing advertising products within the WeChat ecosystem; Alibaba's cloud business and e - commerce competition are the focus. Watch its profit margin trend, AI revenue contribution, and the prospects of cross - border business; for JD.com, focus on the medium - term goals of its food delivery business and the competitiveness of its core retail business.

Manus opened registration as "it's extremely hard to get a code", facing a big test of user reputation. Praises and complaints "fly together". All users can now experience Manus, which is known as the "world's first general - purpose AI Agent", without waiting for an invitation code. This move of opening registration is regarded by the outside world as a landmark step for it to enter the mass market. Whether Manus can prove its value on a larger scale will be a crucial step for it to transform from a popular product into a mainstream AI tool.

Hong Hao: This year, any non - U.S. assets will outperform, such as the euro, gold, and Hong Kong stocks. Gold may rise for 2 years or 20 years, and Hong Kong stocks will reach new highs in the third quarter.

Domestic Macroeconomics

The plot ratio across the country is decreasing. In 2024, in 22 key cities across the country, the proportion of land for transfer with a plot ratio of less than 1.5 has reached 18%, a significant increase from 11.7% in 2023. At the beginning of this year, the proportion of plots for sale with a plot ratio of less than 2.0 reached 44%, a new high in the past four years. This has led to the concentrated emergence of low - density products such as townhouses and villas, and the proportion of transactions in the improvement area segment of over 110 square meters has increased year by year.

Domestic Companies

Five departments including the State Administration for Market Regulation have summoned food delivery platform enterprises. They require relevant platform enterprises to strictly abide by laws and regulations such as the E - commerce Law of the People's Republic of China, the Anti - Unfair Competition Law of the People's Republic of China, and the Food Safety Law of the People's Republic of China. They should strictly implement their main responsibilities, actively fulfill their social responsibilities, strengthen internal management, operate legally and in a standardized manner, compete fairly and in an orderly way, jointly create a good market environment, effectively safeguard the legitimate rights and interests of consumers, operators within the platform, and food delivery riders, and promote the standardized, healthy, and orderly development of the platform economy.

Chinese food delivery is going global. Meituan's Keeta performs strongly in the Middle East, and the next target is Brazil.

NETA Auto has been applied for bankruptcy. On May 13, information on the National Enterprise Bankruptcy and Reorganization Case Information Network showed that a new bankruptcy review case was added for Zhejiang Holley New Energy Automobile Co., Ltd., an affiliated company of NETA Auto. The applicant is Shanghai Yuxing Advertising Co., Ltd., and the handling court is the Intermediate People's Court of Jiaxing City, Zhejiang Province.

Overseas Macroeconomics

The optimism about trade is rising. Goldman Sachs has lowered the probability of a U.S. recession and raised the target price of the S&P 500. Goldman Sachs expects the improvement of the U.S. economic outlook, has lowered the probability of a recession from 45% to 35%, and has significantly raised the earnings forecast and return prospects of the S&P 500 index. It expects an 11% return for the S&P 500 index in 12 months, with a target of 6500 points, and is particularly optimistic about stocks with strong pricing power and AI stocks.

Bank of America's monthly institutional survey: "Going long on gold" is still the most crowded trade, and the allocation of the U.S. dollar has dropped to the lowest level since 2006. Bank of America's survey shows that investors' allocation of the U.S. dollar has dropped to a 19 - year low, and 57% of investors believe that the U.S. dollar is overvalued. At the same time, "going long on gold" has become the most crowded trade in the market for the second consecutive month, and gold is considered the most overvalued asset in 17 years. Michael Hartnett said that after mostly missing the opportunity in last month's rally, investors may be forced to chase the upward trend.

U.S. enterprises have started a new 90 - day "stockpiling period". The transportation demand has pushed up ocean freight rates. "Never been so happy about a 30% increase in costs"! U.S. enterprises are racing against time to resume production, cancel price increases, and streamline product lines to stockpile products in the United States within the 90 - day window. This may trigger a new round of shipping congestion and cost increases.

When the "rush - shipping tide" meets the traditional peak season, the shipping demand explodes! The 90 - day tariff truce extends exactly to mid - August, overlapping with the traditional shipping peak season, which may bring forward the peak season and boost higher demand during the peak season.

Paying for tariffs, the average price of new cars in the United States in April saw the largest increase since the pandemic. After deducting discounts and promotions, the average price of new cars in the United States in April rose by 2.5% compared with March, far exceeding the usual 1.1% increase in the same period in recent years.

U.S. oil rose more than 3% intraday. Trump施压 again: If an agreement is not reached, Iran's oil exports will drop to zero. Trump said that the United States will provide a path to a brighter future for Iran. If Iran refuses, the United States will have no choice but to exert maximum pressure. After Trump's speech, U.S. oil reached an intraday high in nearly three weeks, and Brent oil rose nearly 3% to a new high in more than two weeks.

U.S. President Trump said he will lift sanctions on Syria. Trump said that he has taken measures to restore normal relations with Syria and, after discussions with the Saudi Crown Prince and the President of Turkey, has decided to order the termination of sanctions on Syria.

Overseas Companies

In the tariff storm, software stocks such as Microsoft have become a safe haven. The software model has many characteristics that make it attractive during economic turmoil. As a digital product, software does not require physical transportation and will not be significantly affected by tariffs. Wall Street has recently raised the earnings expectations for the software industry, expecting a 13% earnings growth.

Microsoft announced a 3% staff reduction and streamlined management levels. Microsoft announced on Tuesday that it will cut about 3% of its workforce, affecting all levels, teams, and regions around the world. This staff reduction will affect about 6,000 people. Microsoft said that one of the goals of this staff reduction is to reduce management levels, and the staff reduction has nothing to do with performance. Microsoft's chief financial officer previously mentioned that AI is helping the company save labor costs.

SoftBank's net profit in Q4 increased by 123.9% year - on - year, achieving its first profit in four years, driven by AI demand. Benefiting from the continuously strong AI demand that has boosted the valuation of start - ups and the sales of the chip division, SoftBank Group's net profit in the fourth quarter reached 517.18 billion yen (about $3.5 billion), far exceeding the market - expected loss of 108.11 billion yen, achieving its first profit in four years. The Vision Fund, which was once widely criticized, also turned losses into profits, contributing a profit of 26.1 billion yen.

Industry/Concepts

1. PCB: Soochow Securities pointed out that since the United States proposed a reciprocal tariff policy on April 2, it has caused a great disturbance to the demand expectations for PCB related to computing power, and the stock prices of relevant companies have fluctuated significantly after the policy was introduced. The phased easing of China - U.S. tariffs will reduce the downward pressure on the demand expectations for AI computing - related PCB. At the same time, the outlook guidance of PCB listed companies for the second quarter and the optimistic feedback from downstream ODM manufacturers also reflect the resilience of PCB demand. It is optimistic about PCB suppliers related to computing power.

2. AI Agent: 2025 will be the first year of AI Agent and the starting point of a software revolution: Agent may become an important catalyst for the re - evaluation of software value. The target market of software vendors is expected to expand to the multi - trillion - dollar labor market. AI Agent is also expected to enhance the consumer attribute of software, further opening up the valuation ceiling of software vendors.

3. Belt and Road: Caitong Securities pointed out that the Belt and Road Initiative has both a margin of safety and valuation elasticity. Subsequent Central Asia summits, the China - Kyrgyzstan - Uzbekistan Railway, etc. will become important catalysts for the Belt and Road sector, which is expected to boost the performance of international engineering companies and central construction enterprises.

4. Export Chain: Previously, due to tariff issues, the market was worried that the profits of export - chain enterprises would be damaged. Now that the tariffs have been implemented, these concerns are expected to be greatly alleviated, and the sector may迎来 an opportunity for catch - up growth. Guosheng Securities' research report has calculated the proportion of overseas revenue in various industries. Currently, the key industries in the global export chain include other home appliances, consumer electronics, shipping ports, small home appliances, construction machinery, etc.

Forward - looking View of Today's Top News

Germany's April CPI.

Speeches by Federal Reserve Governor Waller and President of the Federal Reserve Bank of San Francisco Daly.

OPEC releases its monthly crude oil market report.

The change in EIA crude oil inventories in the United States last week.

Tencent Holdings' earnings report.

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