China's A-Shares Defy Global Trends, Soar on Domestic Policy Support

Today's market action demonstrated that A-shares can follow their own logic independent of overseas markets. Despite continued adjustments in U.S. stocks overnight and further declines in Japanese and South Korean markets today, China's A-share market was stimulated by the dual listings, with the semiconductor sector leading a sharp rally. Even overseas computing power-related stocks like Zhongji Innolight Co.,Ltd. and Eoptolink Technology Inc.,Ltd. rebounded. However, the semiconductor rally did drain liquidity from other sectors. In the morning session, only semiconductors were rising at one point, with over 4,300 stocks declining. The electronics sector's turnover exceeded 850 billion yuan, accounting for nearly one-third of the total market turnover of 2.97 trillion yuan. The semiconductor sector formed a strong bullish candlestick with high volume, maintaining its upward momentum. In recent days, extensive educational content about the dual listings has circulated widely across platforms, with related industry chain charts being shared everywhere, indicating exceptionally high market interest, comparable to the commercial aerospace frenzy in January. However, as the charts show, the semiconductor sector had already risen significantly before this. Accelerated moves driven by narrative hype can often exhaust near-term upside, warranting rational participation.

Shifting to today's major news: U.S. President Donald Trump stated at the White House on the 19th that he hopes to end the Iran conflict "very quickly." Trump said, "We will end this war very quickly." Iran's Islamic Revolutionary Guard Corps issued a statement warning that if Iran is attacked again, the conflict will spill beyond the Middle East. China's Ministry of Commerce announced that China and the U.S. have agreed in principle to discuss a framework for reciprocal tariff reductions on products of equivalent scale under the trade council, with the scale for each side being $30 billion or more. The Chinese government will implement export controls on key minerals like rare earths in accordance with laws and regulations, reviewing applications for compliant, civilian-use licenses. The yield on 10-year and longer-term government bonds in G7 countries has risen to about 4.7%, the highest level since 2004. This is approximately 0.5 percentage points higher than the peak during the 2008 financial crisis. This surge is set against a backdrop of renewed inflationary pressures from rising energy prices, persistently large government deficits, and the end of central bank quantitative easing programs. Looking at Monday's situation, the 10-year U.S. Treasury yield rose nearly 10 basis points in a single day despite no oil price increase and no significantly surprising macro data (roughly two standard deviations of its daily volatility), indicating that trading dynamics, rather than fundamentals, dominated market movements. Institutional analysis suggests several potential factors: 1) Major investment banks issued bearish views on U.S. Treasuries over the weekend, raising their target rate levels; 2) After breaking through its one-year trading range (4%-4.6%), some stop-loss positions in the 10-year Treasury were triggered; 3) Following the G7 finance ministers' meeting, Treasury Secretary Janet Yellen and other ministers did not provide any effective response expressing concern over market rates, briefly dashing some expectations for intervention.

Recently, Tesla China posted multiple job openings related to autonomous driving testing, sparking industry speculation about the accelerated rollout of its Full Self-Driving (FSD) system in the Chinese market. According to reports, the recruitment plan released approximately 90 core R&D positions at once. The most notable are the "Autonomous Driving Test" related roles, with job locations covering nine major Chinese cities including Beijing, Shanghai, Shenzhen, Guangzhou, and Wuhan. Positions include Autonomous Driving Test (Real Vehicle Test) Technician, Autonomous Driving Test Engineer, and Autonomous Driving Site Test Specialist. The May Loan Prime Rate (LPR) was released: the 5-year LPR is 3.5%, unchanged from the previous month. The 1-year LPR is 3%, also unchanged from the previous month. The LPR has remained unchanged for 12 consecutive months. Yesterday, Yangtze Memory Technologies Co., Ltd. released its IPO and listing tutoring filing report. Combined with the explosive earnings report from ChangXin Memory Technologies last weekend, this ignited the semiconductor sector. Stocks like Gigadevice Semiconductor Inc., Jht Design Co.,Ltd., and China Wafer Level Csp Co.,Ltd. hit the daily limit-up, while Hua Hong Semiconductor Limited surged over 18% and Semiconductor Manufacturing International Corporation jumped over 12%. It is reported that DeepSeek recently posted two consecutive job openings related to Agent Harness: Agent Harness Product Manager and Agent Harness R&D Engineer. At J.P. Morgan's 54th Annual Global Technology, Media, and Communications Conference, Intel CEO Pat Gelsinger stated that Intel 18A already supports Panther Lake mass production, with yield improving by about 7% per month, exceeding internal expectations. As AI shifts from training to inference, CPUs are becoming increasingly important and indispensable in the AI era. The CPU-to-GPU configuration ratio is moving from 1:8 towards 1:1, potentially even reaching 4:1. Intel is actively pursuing ASIC business, offering customized solutions.

Finally, a brief look at the market close: The Shanghai Composite Index fell 0.18%, while the ChiNext Index rose 0.34%. In Hong Kong, the Hang Seng Index fell 0.57%, and the Hang Seng Tech Index rose 0.34%. By sector, Electronics, Power Equipment, Basic Chemicals, Petroleum & Petrochemicals, and Building Materials led the gains. Utilities, Media, Computers, and Commercial Retail led the declines.