For stock traders, the analyst reports from Jin Qilin offer authoritative, professional, timely and comprehensive insight to help uncover promising thematic opportunities. It has been a while—how is everyone doing? Surely the long National Day holiday without the stock market gave both body and mind a good chance to relax. Today is the first trading day after the holiday, so let us settle back in and continue the journey through the sea of stocks. Because this holiday was quite long, there were inevitably many important developments, and to avoid getting bogged down in details I will not go through them one by one. Instead, I will organize them into several core points, using key themes to cover the full picture of the holiday so everyone can grasp the essential information clearly and quickly and seamlessly return to today's capital markets.
1. Expectations for a Fed rate hike plummet
You may recall that before the holiday, due to various hawkish remarks and complex geopolitical tensions, the probability of a Fed rate hike in October was still over 70%, and the probability of two hikes before year-end was still above 50%. But now the probability of an October hike has plunged to 20%, and on Polymarket it is only around 15%. So what exactly happened behind such a huge change? In rough chronological order it was as follows: (1) New York Fed President Williams turned dovish, saying only one more hike is needed this year and there is no need to rush. (2) U.S. August PCE data came in below expectations, with both headline and core, year-on-year and month-on-month, all weaker than expected, and July data was also revised down. There was a base effect adjustment factor here, but it still provided a positive boost to sentiment. (3) Fed Vice Chair Jefferson turned dovish, saying more time is needed to judge whether to raise rates further. Fed Governor Bowman suggested there is no need for further rate adjustments this year. (4) September nonfarm payrolls came in at 29,000, far below the expected 90,000, with August data also revised down, while the unemployment rate rose from 4.1% to 4.2%. In summary, Fed officials came out dovish while inflation and employment data both weakened, forming a combination very unfavorable to rate hikes. At present, the late-October hike is very likely dead, but the probability of at least one hike within the year is still 80%. However, the next rate decision is not until December, and uncertainty in between is significant, so we will have to take it one step at a time.
2. Long-term U.S. Treasury yields continue to surge
Intuitively, with rate hike odds plunging, Treasury yields should also ease somewhat, but that has not been the case. The Fed's federal target rate is more closely linked to short-term debt. For example, during the holiday the 2-year Treasury yield moved lower, but the 10-year and 30-year continued to climb, with the former breaking above 5.3% at one point and the latter even touching above 5.7%. Several forces are driving long-term yields higher. First, earnings growth brought by the AI super-cycle: U.S. second-quarter GDP growth reached 6.6%, higher than Treasury yields, which drives up real interest rates. Second, inflation data that remains above 2%, plus Middle East tensions and oil price disruptions. Third, large-scale bond issuance by major AI companies has significantly crowded out Treasuries. Simply put, when bond supply increases substantially, yields naturally must rise to increase attractiveness. Fourth, the massive scale of U.S. debt and fiscal concerns have made many entities sell Treasuries and shift to gold. Yesterday China released its latest data: the central bank bought 740,000 ounces of gold in September, a new single-month high, marking 23 consecutive months of increases. Considering that gold was declining and adjusting in September, this reflects a buy-the-dip stance. And this is not an isolated case: in September gold prices fell 8%, yet global gold ETFs saw large inflows of 70 tonnes, a historically rare divergence. (P.S.: The firm global trend of gold buying, combined with a short-term reversal in Fed rate hike expectations, may bring gold a short-term counterattack window.) Our view on U.S. Treasuries remains unchanged: long-duration bonds should still be avoided, but 2-year-ish short-duration Treasuries have some allocation value. However, given currency issues, domestic investors need to control exposure and cannot go half-portfolio like the stock guru.
3. U.S. stocks continue to hit new highs
Logically, when the risk-free rate (10-year Treasury yield) rises, equity assets should come under pressure, but the Nasdaq and S&P 500 did not fall—they rose and set record highs during the holiday, making A-share investors cry. But looking beyond the phenomenon to the essence, the Dow, dominated by traditional industries, barely rose during the holiday and remains far from its high. Meanwhile, the S&P 500 equal-weight index, representing the whole market, has recently broken down repeatedly compared with the weighted version—what we usually call the S&P 500—meaning that aside from a handful of mega-cap tech leaders, most stocks have almost entered a bear market. This is also a reflection of the recent dismal Hong Kong stock market. With U.S. Treasury yields elevated, overseas funds cluster into the few sectors with standout short-term earnings growth, creating significant divergence. A set of overseas data shows that the relative valuation of the TMT sector has reached a new high since the internet bubble, while the relative valuation of traditional defensive sectors has nearly matched the historical low from the internet bubble era. This kind of divergence was actually already experienced in A-shares in the first half of the year. The investment implication of this situation for the market ahead can be summed up in one word—awe. Awe not only for the uniquely strong tech sector, but also for the left-side traditional sectors. Mapped to operational thinking: (overseas) tech holdings can be kept but chased cautiously; left-side domestic demand sectors should be cut cautiously, but positioning should also be built gradually through dollar-cost averaging. Looking ahead, high-earnings-growth tech remains favored, but the circle will likely narrow. On the domestic demand side, as data gradually stabilizes, policies continue to roll out, and valuations are at historical lows, it will become increasingly resilient and may even be a trend of expanding the circle.
4. Domestic demand begins to gather strength
Since I just mentioned domestic demand, let us expand on it. During the holiday, the Ministry of Finance published an article in Qiushi titled "Precisely and Effectively Implement a More Proactive Fiscal Policy." The article pointed out that this year is the opening year of the 15th Five-Year Plan, and doing a good job in the remaining months is crucial to completing the year's targets and achieving a good start. It is necessary to study and formulate highly targeted incremental policies and pay more attention to expanding effective domestic demand. With less than a quarter left this year, to meet the goals set at the beginning of the year, the policy side will very likely continue to push hard, with the core focus being domestic demand. In fact, this has already been happening recently. For example, before the holiday a historic mortgage interest subsidy was implemented, and the central bank also rolled out a big package, including cutting the PSL rate by 25bp, expanding the scope of loan support, and increasing relending quotas for technological innovation and agriculture support. Real estate plus industry are working together, and the approach is quite forceful. It is worth noting that the Ministry of Finance article named the next step as "implementing multi-department coordinated policies to boost domestic demand, expanding the scope of interest subsidies, and appropriately raising quotas." In other words, the current threshold may not be the end point. After a period of actual operation, there is still room to imagine a larger opening for subsidies. In addition, the September PMI disclosed before the holiday also performed decently, recording 50.1%, up 0.3 percentage points from the previous month and returning to expansion territory. Among that, the production index was 51.7%, up 1.3 percentage points from last month, with expansion clearly accelerating, which feels like building momentum for expanding domestic demand in the fourth quarter. In short, the policy level is already taking action. With expectations of weakening exports later, domestic demand will undoubtedly become the top priority going forward. Two things can be watched closely: first, the implementation and execution of domestic demand policies and the rollout of new ones; second, the tone set for next year at the year-end economic work conference.
5. Global stock market performance
U.S. stocks performed fairly well during the holiday, with the Nasdaq and S&P 500 continuing to set new highs, and the Philadelphia Semiconductor Index rising more than 3%, which was quite strong. Among the eight U.S. stock sisters we track overnight, only one closed green during the holiday, while the rest rose by as much as more than 12%. These are trillion-level giants, and with rate hike expectations cooling, they were able to keep surging despite persistently high Treasury yields. Asian markets showed significant divergence, with Japan standing out with a gain of nearly 5%, while South Korea's market rode a small roller coaster, rising first and then falling, ending the holiday slightly lower. Hong Kong stocks performed relatively poorly, with the Hang Seng Index falling nearly 2%. On one hand, with A-shares closed, Southbound trading was shut and removed nearly 30% of liquidity; on the other hand, high U.S. Treasury yields continued to siphon capital from Hong Kong stocks. Specifically, at the sector level almost everything closed green, with utilities and dividend sectors outperforming the Hang Seng Index and showing relative resilience. At the individual stock level, core companies dual-listed in A-shares and H-shares also fell more than they rose, with CXO, optical modules, batteries and nonferrous metals leaders bucking the trend to close green, which may have some guiding significance for related A-share sectors. Overall, however, Hong Kong stocks were too disturbed by liquidity during the holiday, and the normal state may only return after A-shares reopen. How today plays out is even more critical. By the way, a more comprehensive view of global market performance during the holiday is placed below for everyone to check.
The first day back after the holiday is Thursday, so a special reminder not to forget today's dollar-cost averaging launch. The impact of various holiday developments on asset allocation has actually been discussed in detail above, and the specific launch will follow this line of thinking. In practice, the Dianjing dollar-cost averaging strategy based on the three-good principle has a style that is coarse in the macro and fine in the micro. Coarse means finding the major strategic direction, vaguely correct assets and allocation ratios, slowly collecting chips and waiting for flowers to bloom, without rushing for short-term gains. Fine means continuously making tactical adjustments based on changes in the market's center of gravity, including asset types and purchase positions. The last trading day before the holiday was Wednesday, so we effectively missed one launch last week, and that was during the market's most depressed pre-holiday period. Therefore, everyone should try to keep up with today's launch. The specific changes and thinking behind the launch will be synchronized in today's noon launch logic. That is all.
Key news
1. During the holiday, the Middle East conflict did not see major escalation, but nothing was negotiated either, and both sides kept up nonstop verbal sparring. Iran said negotiations with "an enemy that keeps breaking promises" are "meaningless," and accused the United States of striking after three rounds of talks. On the U.S. side, Vance said Iran must first "substantively" reduce its uranium enrichment capacity before it can discuss peace. The mad king said strike intensity might increase after the midterm elections. Moreover, according to reports, there have already been substantive moves, with plans to send up to 10,000 additional troops to the Middle East, expected to arrive by the end of November. Affected by these events, oil prices continued to rise in the early part of the holiday, with Brent once returning above $102. Facing pressure from persistently high oil prices, the United States demanded that Europe release more emergency diesel reserves, otherwise it would impose a diesel export ban on it. Then, at France's proposal, Europe and the IEA will release 100 million barrels of crude oil and refined products over four months, focusing the first 20 days on diesel. Stimulated by this, oil prices fell back again. Overall, oil prices are not much changed from before the holiday. Oil prices affect global inflation and create significant disturbances on the rates side. Yesterday the mad king also said "actions against Iran must be wrapped up, and the question to consider is whether to do it softly or harshly." It feels like the mad king has not figured out how to end it either, and is shouting here to conduct a market survey. On this, there will still be many subsequent changes, and continued tracking is still needed.
2. The adjustment rules for the Hang Seng Tech Index have been confirmed, basically consistent with what was previously disclosed. After the revision, Hang Seng Tech will cover six major themes: digital platforms and solutions, artificial intelligence, advanced hardware, robotics and automation, cloud, and frontier technology, with tech sub-themes increasing from 16 to 24. At the same time, after the adjustment, a two-group stock selection mechanism will be adopted, using market capitalization ranking and revenue growth ranking as selection criteria respectively. The number of constituent stocks will increase from 30 to 50, with the top 40 selected by market capitalization ranking and the remaining 10 selected by revenue growth ranking over the past twelve months. This is the largest revision since Hang Seng Tech was launched in 2020. After this adjustment, more tech companies will be included, making it a broader and more forward-looking Hong Kong tech stock index. This kind of change is still relatively positive.
3. Alphabet (GOOGL) signed a nuclear power purchase agreement with Constellation Energy Corp (CEG), adding 890 megawatts of reactor capacity. Before this, Amazon.com (AMZN) had just completed a similar large-scale energy purchase. Hyperscale data centers are willing to pay long-term contract prices for round-the-clock stable power supply, which for the power sector amounts to adding long-term sustainable demand and has a relatively positive impact. Among these, nuclear power is the best fit because it can supply power around the clock without producing carbon emissions, and may be the most benefited subsegment. In today's global market section, the cumulative performance data of global assets during the National Day holiday is included, with data sources: choice, 2026.10.07; iFinD, 2026.10.07; iFinD, as of 2026.10.07; iFinD, 2026.10.07.
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