Morning News

Source: Wall Street Journal  

**Market Overview**  

Uncertain tariff outlook dampens U.S. stock rebound. The three major U.S. stock indices closed higher after dipping into negative territory intraday: S&P 500 up 0.4%, Dow up 0.28%, Nasdaq up 0.39%. Nvidia rose over 3% post-earnings; Best Buy fell over 7%; C3.ai surged nearly 21%; Dell extended gains after hours, briefly up over 5%. China stock index rose over 1%, ending a seven-day losing streak; JD.com jumped over 4%.  

Trump administration plans to appeal tariff ruling to Supreme Court. U.S. Treasury yields accelerated downward; dollar index extended losses; gold futures surged nearly 2%, marking first weekly gain. Crude oil turned lower intraday; WTI fell over 2%.  

During Asian trading, A-shares and Hong Kong stocks rallied collectively. Cryptocurrencies surged; healthcare stocks gained broadly; container shipping Europe route rose over 6%; government bonds broadly fell.  

**Key News**  

Trump administration scores win: Appeals court approves request to halt tariff-blocking ruling, temporarily restoring tariffs (originally planned for Supreme Court appeal).  

Second U.S. court in two days blocks Trump tariffs, ruling Illinois toy importers exempt.  

White House advisor: Confident in overturning ruling via appeal; alternative tariff tools available but not currently considered. Goldman Sachs and Morgan Stanley warn limited impact, citing alternative administration tools.  

Trump meets Powell—first since Nov 2019—demands rate cuts; Powell maintains policy independence.  

Former BOJ official hints Japan may have halted U.S. bond sales: "No alternatives to buy." Japanese PM calls Trump to discuss tariffs; Shigeru Ishiba suggests potential U.S. visit if needed.  

U.S. judge orders indefinite maintenance of Harvard’s student visa program.  

Jensen Huang plans to sell up to 600,000 Nvidia shares (worth $800M+), far exceeding previous sales.  

Dell Q1 AI server orders vastly exceed expectations; strong Q2 revenue outlook sparks after-hours surge over 9%.  

**Market Close**  

**Stocks**:  

- U.S.: Dow +0.28%, S&P 500 +0.4%, Nasdaq +0.39%  

- Europe: STOXX 600 -0.19%  

- China: Shanghai Composite +0.7%, Shenzhen Component +1.24%, ChiNext +1.37%  

**Bonds**:  

- U.S. 10Y yield ~4.42% (-6bps); 2Y yield ~3.94% (-5bps)  

**Commodities**:  

- WTI July crude -1.45%; Brent July crude -1.15%  

- COMEX June gold +~1.5%  

- LME: Tin -~1.3%, Lead -1%, Nickel +2.4%

Here is the detailed translation of the key news:

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**Global Highlights**  

**Trump Administration Wins Partial Victory: Appeals Court Temporarily Restores Tariffs, Averting Supreme Court Showdown**  

An appeals court approved the Trump administration’s request to halt a lower court ruling that blocked tariffs, temporarily restoring the policy. Earlier Justice Department filings revealed that if the appeals court did not intervene, the administration planned to take the case to the Supreme Court as early as Friday. Following the news, the S&P 500 briefly turned negative, the 10-year Treasury yield hit a session low, and gold surged over 1%.  

**Second Court in Two Days Blocks Trump Tariffs**  

On Wednesday, the U.S. Court of International Trade ruled Trump overstepped his authority in imposing tariffs. On Thursday, federal judge Contreras similarly ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize tariffs and barred the administration from taxing two Illinois-based toy importers. The companies argued that while they survived the pandemic, tariffs could now force them out of business.  

**White House Advisors Confident in Overturning Ruling; Alternative Tools Available**  

Trump’s chief economic advisor Hassett stated the ruling "definitely won’t affect negotiations," expecting more trade deals in coming weeks. Trade advisor Navarro insisted the administration was not caught off guard: "Nothing has actually changed," citing strong legal grounds. Goldman Sachs and Morgan Stanley warned the impact may be limited, as Trump has other tools to offset the effects.  

**How Could Trump Impose Tariffs If "Reciprocal Tariffs" Are Blocked?**  

Goldman Sachs sees low odds of Trump winning on appeal and expects him to invoke Section 122 as an alternative, buying time for Section 301 investigations. Sections 338 and 232 are also options. Zhongtai Securities noted that with judicial constraints, the administration may find ways to "circumvent" the ruling.  

**Trump Meets Powell for First Time Since Nov 2019, Demands Rate Cuts; Powell Stresses Independence**  

At Trump’s invitation, Fed Chair Powell met with him at the White House. Powell emphasized the Fed’s commitment to non-political, objective analysis in setting policy for maximum employment and price stability. Trump called the Fed’s refusal to cut rates "a mistake."  

**Why Did Treasury Yields Rise After Tariffs Were Blocked?**  

Markets viewed the ruling not as a positive but as evidence of fractured U.S. economic governance. Judicial intervention—rather than executive or legislative action—highlighted a lack of coordination, fueling concerns over fiscal sustainability amid reduced tariff revenue.  

**Ex-BOJ Official Hints Japan Halted U.S. Bond Sales: "No Alternatives to Buy"**  

Ex-BOJ official Shirai said Japan likely did not sell U.S. Treasuries, as the dollar’s reserve status leaves no better assets. She dismissed ECB Chief Lagarde’s claim that the euro could rival the dollar, suggesting the yuan has greater potential.  

**Japanese PM Calls Trump on Tariffs; Ishiba May Visit U.S.**  

The 25-minute call came less than a week after their last talk, signaling urgency for a trade deal. PM Ishiba and Trump plan to meet at June’s G7 summit; Ishiba said he may visit the U.S. beforehand if needed. The yen rose.  

**Trump’s 10% Tariff "Red Line" Forces EU Choice: Concede or Retaliate**  

Though 50% punitive tariffs are delayed until July 9, the 10% "reciprocal tariff" wall appears set. EU negotiators privately admit it may be irreversible. One diplomat stated, "Trump isn’t interested in negotiation. He wants surrender or punishment."  

**U.S. Judge Orders Indefinite Protection for Harvard’s Student Visa Program**  

Federal Judge Burroughs said she would require DHS and State to maintain Harvard’s visa program indefinitely. Separately, a Massachusetts court granted Harvard’s request for a preliminary injunction against Trump’s policy revoking its ability to admit international students.  

**NVIDIA CEO Jensen Huang Plans $800M+ Stock Sale**  

Huang intends to sell up to 600,000 shares—far exceeding prior sales.  

**Huang: "AI Inference Demand Explodes"; Blackwell Ramp Hits 72K GPUs Weekly**  

At an earnings call, Huang praised Chinese AI model "DeepSeek R1" for growing smarter like ChatGPT but lamented losing access to China’s $50B market. NVIDIA expects an $8B Q2 revenue hit from H20 restrictions, but its Blackwell chips—shipping 72K GPUs weekly—will power Microsoft’s "tsunami" of inference demand (100T tokens/quarter). "Blackwell is at full throttle. We have multiple growth engines," he declared.  

**NVIDIA Remains "Universe’s Hottest Stock"**  

Analysts note Q1 revenue met expectations; gross margin fell mainly due to $4.5B in H20-related charges. Excluding that, margins would be near 71%. Q2 guidance of $45B revenue (up $1B QoQ) factors in ~$8B H20 impact—without it, growth would be $9B QoQ.  

**Dell Soars 9% After Hours on Blowout AI Server Demand, Strong Outlook**  

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**Domestic Macro**  

**Four Ministries Name 2025-26 National Cultural Export Leaders**  

The Ministry of Commerce, Publicity Department, Culture and Tourism, and NRTA jointly released the 2025-26 National Cultural Export Key Enterprises and Projects list. Firms like Migu Culture and projects like Great Wall TV Platform were recognized.  

**U.S. Cuts Some Chip Tech Exports to China**  

Per Global Times, the U.S. has effectively blocked firms like Cadence, Synopsys, and Siemens EDA from selling chip design tools to China. Exports of jet engine tech and certain chemicals were also suspended.  

**China Advances Anti-Dumping Probe on EU Brandy; MOFCOM Open to Dialogue**  

The investigation ends July 5, 2025. Authorities are reviewing price commitments submitted voluntarily by EU exporters and will rule based on facts and law. MOFCOM reiterated openness to resolving disputes via talks.  

**U.S. to Revoke Chinese Student Visas; FM Slams "Discriminatory" Move**  

The Foreign Ministry called it a discriminatory act that "exposes the lie of U.S. ‘freedom and openness.’"  

**FM Reacts to U.S. Court Halting Trump Tariffs**  

Spokesperson Mao Ning reiterated that tariffs and trade wars have no winners, harm all parties, and are "doomed to fail."  

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**Domestic Companies**  

**DeepSeek-R1 Official Update: "Deeper Thinking, Stronger Reasoning"**  

The upgraded R1 model achieved top-tier results among Chinese models in math, coding, and logic benchmarks, nearing global leaders like o3 and Gemini-2.5-Pro.  

**Li Auto Q1 Revenue Stalls; Q2 Guidance Misses**  

Amid a price war, Li Auto held margins steady at 20.5% with net profit up 9.4%. But Q2 revenue guidance of ¥32.5B–33.8B missed estimates; deliveries projected at 123K–128K units.  

**Futu Q1 Revenue Jumps 81%, Profit Up 98% on Surging HK Trading**  

Revenue hit HK$4.695B (+81.1% YoY); net profit rose to HK$2.217B (+97.7%). Total trading volume hit a record HK$3.22T, with HK stock turnover soaring 227% to HK$916B.  

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**Overseas Macro**  

**U.S. Q1 GDP Revised to -0.2%; PCE Inflation Down to 3.4%**  

The economy shrank 0.2% annualized, worse than expected, dragged by weak consumption and imports. The revision (from -0.3%) reflected stronger business investment and inventory growth.  

**"DOGE Effect"? Jobless Claims Hit 4-Year High in Key States**  

Initial claims surged to 240K (vs. 226K expected); continuing claims hit 1.919M—highest since Nov 2021.  

**U.S. Pending Home Sales Post Biggest Drop Since 2022**  

High mortgage rates crushed spring sales. The index fell 6.3% MoM in April—the steepest drop since Sept 2022—to near historic lows.  

**Fund Survey: Selling USD Consensus; U.S. Stocks "Least Popular"**  

Citi found global funds are "de-Americanizing"—cutting U.S. stocks, bonds, and USD exposure while boosting European/Japanese equities, gold, and non-USD currencies. U.S. stocks are now the "least favored" market globally.  

**Goldman: Overweight Gold, Underweight Oil as Traditional Portfolios Fail**  

Amid U.S. credibility risks and inflation, gold and oil consistently hedge when stocks and bonds fall together. Adding them to portfolios could cut volatility to 7% from 10% while preserving 8.7% historical returns.  

**Trump Says Putin "Playing With Fire"; Russia Warns of "WW3"**  

Trump’s harshest criticism yet reflected frustration over stalled Ukraine talks. Russian officials accused U.S. media of sabotaging negotiations. Kremlin spokesperson Peskov warned of "new sanctions."  

**Bank of Korea Cuts Rates 4th Time, Slashes Growth Outlook**  

The BOK cut its 2025 GDP forecast to 0.8% and signaled more easing to counter downside risks. Governor Rhee Chang-yong said further cuts are possible if growth weakens.  

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**Overseas Companies**  

**Musk: "Self-Delivering" Model Y With FSD Coming in June**  

Tesla will use Full Self-Driving tech to deliver cars autonomously from factory to customers. Musk said test vehicles drove "accident-free" for days on public roads.  

**Musk "Hijacks" OpenAI’s Abu Dhabi Data Center Deal**  

Musk threatened to block OpenAI’s UAE data center project unless his xAI joined. He warned Emirati officials that Trump wouldn’t approve it otherwise. The final U.S.-UAE deal lists xAI among firms conditionally approved to buy 500K chips annually.  

**How Lilly Is Beating Novo Nordisk in the Weight-Loss Drug Race**  

Novo Nordisk underestimated demand, causing shortages that let Lilly gain ground. Lagging R&D and marketing also contributed to Novo’s decline.  

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**Sector/Thematic**  

1. **Chemicals**: Donghai Securities notes capital expenditure is shrinking amid falling profits. With policy focus on supply-side reform, the sector may be at an inflection point.  

2. **Dexterous Hands**: Huaxi Securities highlights their role in enabling robots’ fine motor skills. They account for a significant share of R&D and production costs.  

3. **Smart Meters**: Huatai Securities sees upgrade demand under "four capabilities" requirements. Valuations are low, and dividend payouts are strong.  

4. **Refrigerants**: Cinda Securities argues the sector is misjudged as cyclical. Fluorspar (upstream) is resource-constrained, and quotas insulate refrigerants from volatility.  

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**Today’s Preview**  

- Japan May Tokyo CPI  

- Germany May CPI  

- U.S. April Core PCE, Personal Income/Spending  

- U.S. May UoM Consumer Sentiment & Inflation Expectations  

- U.S. April Trade Balance  

- Japan’s top trade negotiator Akira Akazawa to visit U.S. around May 30 for 4th trade talks.  

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**Disclaimer**: Views expressed are solely the author’s and do not constitute investment advice. This platform makes no guarantees on accuracy, completeness, or timeliness and bears no liability for losses arising from the use of this information.