Morning News

**Source**: Wall Street Journal

**Market Overview**

Tariffs have been tugging at the nerves of the market, suppressing the upward trend of US stocks. The three major stock indexes closed with at least a 1% gain, giving back nearly half of their intraday gains. Tesla closed up more than 5%, leading the seven major technology stocks in gains for two consecutive days. Texas Instruments, a high - performance company, once rose nearly 6% after the market, while IBM fell more than 6% after the market. The China stock index once again outperformed the broader market, with the China stock index closing up nearly 3%, Xiaopeng Motors rising more than 7%, and NIO rising nearly 5%. The German stock SAP, whose first - quarter profit was higher than expected, soared nearly 11%.

The yield on the 10 - year US Treasury bond reversed in a V - shape, diving more than 10 basis points intraday. After the release of the Federal Reserve's Beige Book, the yield refreshed its daily high and narrowed most of its decline.

The US dollar index rose 1% intraday, approaching the 100 - mark; the Swiss franc fell more than 1% for two consecutive days; after the tariff news, the offshore RMB once rose more than 300 points, breaking through 7.28; Bitcoin rose more than $3000 intraday, breaking through the $94,000 - mark.

Gold and crude oil plummeted. OPEC+ countries were reported to be considering accelerating production again, causing crude oil to fall back to a one - week low, with US oil falling more than 4% intraday. Gold fell for two consecutive days to a one - week low, and gold futures once fell more than 4%.

During the Asian session, the ChiNext Index rose more than 1%, robot - related stocks exploded, the Hang Seng Tech Index closed up more than 3%, Shanghai gold fell more than 4%, and treasury bond futures generally declined.

**Top News**

Trump said that the tariffs on China may be "significantly reduced". The Chinese Foreign Ministry responded that China will accompany the US to the end if it wants to fight, and the door is open if it wants to talk. If the US really wants to talk, it should stop threatening and blackmailing.

Trump said that the Federal Reserve is making a mistake by not cutting interest rates anymore and may call Powell. The media reported that Trump's change of tone on Tuesday to "spare" Powell was partly due to the warnings from Bessent and Lutnick that it might trigger market turmoil.

The US Treasury Secretary once again caused volatility in the US stock market. He mentioned the opportunity of a "major" trade agreement, and also said that the US has not proposed to reduce tariffs, that a comprehensive trade agreement between the two sides may take two to three years, and that Trump will not unilaterally reduce tariffs. He also said that the US will not seek a specific exchange rate target in the negotiations with Japan.

The media reported that the White House said Trump intends to exempt some tariffs on automakers.

The Federal Reserve's first Beige Book after the tariff storm showed that there was little change in economic activity, and trade concerns were widespread across the US. The word "tariff" was mentioned 107 times.

The US April Markit composite PMI unexpectedly declined to a 16 - month low, with confidence frustrated and prices rising. The manufacturing PMI, however, rose instead of falling, better than expected. The tariffs hit the service sector, and the euro - zone April composite PMI almost had zero growth, with both Germany and France shrinking.

The US Treasury Department's 5 - year Treasury bond auction was stable. The overseas demand decreased, but it did not collapse.

It was reported that some OPEC+ oil - producing countries hope to accelerate production again in June, and US oil fell more than 4% intraday.

**Market Closing Report**

- **European and American Stocks**: The Dow Jones Industrial Average rose 1.07%, the S&P 500 Index rose 1.67%, and the Nasdaq Composite Index rose 2.5%. The Stoxx 600 Index in Europe rose 1.78%.

- **A - shares**: The Shanghai Composite Index fell 0.1%, the Shenzhen Component Index rose 0.67%, and the ChiNext Index rose 1.07%.

- **Bond Market**: By the end of the bond market trading, the yield on the 10 - year benchmark US Treasury bond was about 4.38%, down about 2 basis points intraday; the yield on the 2 - year US Treasury bond was about 3.87%, up about 5 basis points intraday.

- **Commodities**: WTI June crude oil futures fell 2.2%. Brent June crude oil futures fell 1.96%. COMEX June gold futures fell 3.66%. London aluminum rose 2.2%, London zinc rose 1.7%, London lead rose 1.1%, and New York copper fell 0.7%.

**Details of Top News**

**Global Highlights**

Trump said that the tariffs on China may be "significantly reduced". The Chinese Foreign Ministry responded that China will accompany the US to the end if it wants to fight, and the door is open if it wants to talk. Chinese Foreign Ministry spokesman Guo Jiakun emphasized that if the US really wants to solve the problem through dialogue and negotiation, it should stop threatening and blackmailing and talk to China on the basis of equality, respect and mutual benefit. Saying one thing while doing another, constantly exerting extreme pressure, is not the right way to deal with China and will not work.

Why did Trump suddenly "spare" Powell? Thanks to Bessent and Lutnick. Trump publicly said on Tuesday that he does not plan to fire Powell. The media reported that this was partly due to the private warnings from Treasury Secretary Bessent and Commerce Secretary Lutnick to Trump that removing Powell might trigger market turmoil and legal disputes. Lutnick also said that even if Powell is fired, other Federal Reserve members may maintain a monetary policy similar to Powell's.

Trump said that Powell made a mistake. The Federal Reserve is making a mistake by not cutting interest rates anymore, and he may call Powell. Trump's habitual change of tone, and the market selectively believes. Guotai Junan International believes that Trump's habitual "change of tone" has not allowed the market to find the certainty it wants. Investors will still look for assets with a safety margin, which can be seen from the outstanding performance of gold. For US bonds, the US dollar and US stocks, differentiation may become the new normal.

The US Treasury Secretary once again caused volatility in the US stock market, mentioning the opportunity of a "major" trade agreement and saying that the US has not proposed to reduce tariffs.

According to the Securities Times, news on Wednesday said that the White House might ease the tariff policy. The offshore RMB once rose more than 300 points, breaking through 7.28. Bessent said that Trump has not proposed to unilaterally reduce tariffs on individual major economies, and it may take two to three years for the two sides to reach a comprehensive trade agreement. Trump will not unilaterally reduce tariffs. The three major stock indexes once gave back more than half of their gains. Bessent later said that the White House press secretary said that the US will not unilaterally reduce tariffs and needs to see the other side reduce tariffs.

The US Treasury Secretary Bessent said that the US will not seek a specific exchange rate target in the negotiations with Japan.

The media reported that the White House said Trump intends to exempt some tariffs on automakers. Before the White House confirmed this to the media on Wednesday, some media reported that Trump intended to exempt some tariffs on auto parts, including the tariffs on steel and aluminum, excluding the 25% tariff on imported whole vehicles, and it will not affect the 25% tariff on auto parts that is scheduled to be implemented on May 3. Analysts believe that this is Trump's retreat again on his most radical tariff policy.

The Federal Reserve's first Beige Book after the tariff storm showed that there was little change in economic activity, and trade concerns were widespread across the US. In this Beige Book, the word "tariff" was mentioned 107 times, more than twice as many as last time, and the word "uncertainty" or similar words were mentioned 89 times. The Beige Book pointed out that with the intensification of economic uncertainty, especially the uncertainty about tariffs, the prospects in several regions have "significantly deteriorated".

The US April Markit composite PMI unexpectedly declined to a 16 - month low, with confidence frustrated and prices rising. The manufacturing PMI, however, rose instead of falling, better than expected. The data shows that the growth of US business activities in April slowed to a 16 - month low, and the expectation for the business outlook in the coming year also declined to one of the lowest since the epidemic. The selling prices of goods and services increased by the largest margin in more than a year, especially the prices of manufactured goods, which was related to tariffs. The employment index was low.

Goldman Sachs' latest research found that the initial unemployment claims, the Philadelphia Fed Manufacturing Index, the ISM Services Index and the unemployment rate are the best indicators to warn of an economic slowdown. These indicators usually send signals only one month after the start of a recession, while hard data such as GDP takes four months to show weakness.

The tariffs hit the service sector. The euro - zone April composite PMI almost had zero growth, and both Germany and France shrank. Affected by Trump's tariff uncertainty, the service sectors of the euro zone, Germany and France unexpectedly shrank, but the manufacturing PMI unexpectedly exceeded expectations. The private sector in Germany unexpectedly shrank for the first time in four months, and the service - sector PMI dropped to a 14 - month low. The output of the private sector in France declined, and the service sector was a significant drag.

The US Treasury Department's 5 - year Treasury bond auction was stable. The overseas demand decreased, but it did not collapse. The 2 - year Treasury bond auction on Tuesday performed poorly, and the overseas demand dropped significantly. The market was worried that the 5 - year Treasury bond auction on Wednesday would also be cold - shouldered.

It was reported that some OPEC+ oil - producing countries hope to accelerate production again in June, and crude oil once fell at least 3%. Kazakhstan clarified the media report, saying that oil production takes into account national interests and the obligations agreed by OPEC+. Kazakhstan's statement is considered to give priority to national interests rather than the interests of the OPEC+ alliance.

**Domestic Macroeconomy**

In March, the cross - border use of the RMB in China reached a record high, and the central bank stated that it would "promote the cross - border use of the RMB". In March, the proportion of the RMB used by individuals and entities in cross - border transactions in China was 54.3%. At the same time, the proportion of the US dollar used decreased, accounting for 41.4%, lower than the level of more than 70% in 2018.

**Domestic Companies**

Hong Kong - listed Tencent has become the top - held stock of public funds for the first time, surpassing Ningde Times and Kweichow Moutai. By the end of the first quarter, a total of 1,186 funds held Tencent Holdings, with a holding market value of 69.384 billion yuan. Ningde Times was held by 1,267 funds, with a total holding market value of 55.369 billion yuan. The market value of Kweichow Moutai held by funds was 37.862 billion yuan.

Regarding rare earths, Musk said, "We are in consultation with China." According to the Global Times, Musk said in the company's earnings call that the mass - production plan of Optimus will be affected by China's rare - earth export control measures. Tesla is actively applying for the export license of China's rare - earth permanent - magnet materials.

The net profit of Kingsoft Office in the first quarter increased by 9.75%. Affected by the procurement process of trusted - computing products, the revenue of the WPS software business decreased by 20.99%.

**Overseas Macroeconomy**

The divergence in the US stock market is unprecedented, with institutions fleeing and retail investors gambling. A Bank of America report shows that institutions are withdrawing from US stocks at a record - breaking pace, while retail investors have made net purchases for 19 consecutive weeks, setting the longest buying streak since the beginning of the year since 2008 when there was data. Retail investors not only buy wildly but also hope to obtain huge returns from the sharp fluctuations through single stocks and high - leverage tools.

A heavy - weight dialogue among top macro - economists: "American exceptionalism" is coming to an end, and US assets will underperform globally in the next five years. What Trump actually pursues may be a 5% to 10% comprehensive tariff, but the impact of the tariff policy on confidence has been irreparable. We are entering an era of a weak US dollar, and capital will flow to areas that are currently severely under - allocated. The future winners may be Canada, Europe, Japan and commodities, and the loser will "undoubtedly" be the US.

The tariffs have hit the stock market, and the pessimism of US corporate CEOs is comparable to that during the financial crisis. Almost every company is lowering its forecasts.

There have been nine "de - dollarization" episodes in history. Caizhong Securities pointed out that since 1971, the US dollar index has had nine rounds of significant adjustments lasting more than one year. Among major asset classes, the S&P 500 Index has mostly strengthened against the background of the US dollar's depreciation. Since 1989, the Nikkei 225 Index has mostly moved downward in tandem with the US dollar index. In several rounds of US dollar adjustments since 2000, gold, copper and crude oil have all shown an overall upward trend, showing a certain negative correlation. In the seven rounds of US dollar adjustments since 1985, the euro has appreciated against the US dollar by more than 20% each time.

The US media disclosed the detailed content of the final version of the US "peace plan" for the Russia - Ukraine conflict, which is "only one page long". According to the Global Times, the report said that the plan requires Ukrainian President Zelensky to make major concessions. The plan includes that the US will recognize the Crimean region as Russian territory and "informally" recognize Russia's control over almost all the occupied areas since the outbreak of the Russia - Ukraine conflict in 2022. Zelensky clearly stated on the 22nd that Ukraine will never recognize the occupied territory as belonging to Russia.

**Overseas Companies**

Three major negative factors are about to test Nvidia. The three negative factors include the AI diffusion rule that will take effect on May 15, the AI demand and capital expenditure of US super - large - scale customers, and the impact of potential tariffs on profit margins. After making a provision of $5.5 billion, Citi expects that Nvidia's first - quarter sales to be announced soon may be only about $500 million higher than the market expectation. What is more worrying is the outlook for the second quarter. Citi expects its sales to be flat month - on - month, about $44 billion.

It is reported that OpenAI expects its revenue to reach $125 billion in 2029, with AI agents becoming the growth engine. OpenAI forecasts that within the next five years, the agent business will account for nearly a quarter of its total revenue, and the channel revenue will account for one - fifth of the total revenue. It is expected that the former will reach $29 billion and the latter will rise to $25 billion by 2029. Through cost control, it is expected to achieve positive cash flow in 2029, and the gross profit margin will reach 70%.

The European Union "takes a tentative step" and fines Apple and Meta 700 million euros first, and then gives a 60 - day observation period. The European Union fined Apple 500 million euros and Meta 200 million euros respectively according to the Digital Markets Act (DMA), totaling $798 million. This move came after Trump threatened to impose retaliatory tariffs on the European Union. Analysts believe that the EU's punishment is relatively restrained and does not reach the maximum fine of 10% of the company's global annual revenue, aiming to avoid further provoking Trump.

It is reported that Intel announced this week that it will cut more than 20% of its workforce. This is already the second - round of large - scale layoffs by Intel within a year. In August last year, the company announced the layoff of about 15,000 positions. By the end of 2024, the number of Intel employees had decreased from 124,800 in the previous year to 108,900. After the news was announced, Intel rose 3.5% in the pre - market trading of the US stock market on Wednesday.

"SAP, the largest company in Europe, saw its stock price soar after releasing its financial report. SAP's profit in the first quarter reached 2.3 billion euros, reversing the loss of 787 million euros in the same period in 2024. The revenue of the cloud business, a key indicator of SAP, increased strongly by 26% to 4.99 billion euros. The company's stock price rose 11%, reaching the largest one - day increase in six years.

The high - end luxury goods industry is in a deep freeze, with Kering Group's sales plummeting and the crisis of the Gucci brand intensifying. Kering Group's first - quarter performance fell short of expectations, with total revenue of 3.88 billion euros and a 14% decline in same - store sales. Gucci's revenue was 1.57 billion euros, and its same - store sales plummeted 25%, performing poorly for several consecutive quarters. Kering's stock price has fallen 50% in the past year. To save Gucci, Kering appointed Demna Gvasalia as the new designer, but the brand's revival will take time.

IBM's first - quarter performance exceeded expectations, but investors were worried about the impact of tariffs and DOGE, and its stock price once fell more than 6% after the market.

Industries/Concepts

1. PEEK Material: Everbright Securities pointed out that PEEK (polyetheretherketone) is a basic material for high-performance engineering plastics, featuring excellent properties such as high temperature resistance, chemical stability, mechanical properties, and wear resistance. Thanks to its outstanding thermal stability, mechanical properties, and chemical compatibility, PEEK material stands out in the field of manufacturing lightweight and durable parts. As a new and vast blue ocean market, the robotics industry has a gradually increasing demand for PEEK material.

2. Tungsten: According to a research report by GF Securities, under the influence of factors such as indicator constraints, environmental protection inspections, and export controls, the supply of tungsten has been continuously facing tight constraints. The long-term central trend of tungsten prices is expected to rise. Moreover, this time, the tungsten ore indicator policy further reduces the total quantity and increases the supply concentration, which is expected to magnify the upward elasticity of tungsten prices.

3. Chromium: As of April 22, 2025, the average price of metallic chromium in China's nonferrous metals market was 73,060 yuan per ton, an increase of 12,090 yuan per ton compared to the beginning of 2025. Guohai Securities believes that chromium salts are expected to gradually shift from traditional low-growth demand to emerging high-growth demand (such as gas turbines for AI data centers, military industry, robotics, aircraft engines, rocket engines, etc.). Against the backdrop that the supply side is difficult to expand significantly due to environmental protection impacts, both supply and demand are expected to be boosted.

4. Photolithography: According to a research report by Guosheng Securities, the photolithography process is the most technically challenging part of chip manufacturing technology. In a lithography machine, the light source, illumination system, and projection objective lens are the core components. With the continuous tightening of overseas sanctions, the domestic lithography machine industry chain is making concerted efforts, and there is a vast space for substitution.

Preview of Today's Top News

The number of initial jobless claims in the United States last week.

The durable goods orders in the United States in March.

The existing home sales in the United States in March.

Google's earnings report after the U.S. stock market closes on Thursday, that is, in the early morning of Friday Beijing time.

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