According to Zhitong Finance APP, CICC released a research report stating that although the AI revolution is still in its early stages, the market has begun to worry about slowing growth among leading players and whether future returns can cover current large-scale investments. The firm remains optimistic about the return prospects of AI assets and recommends responding to recent market volatility through asset allocation, effectively "buying insurance" for AI assets. Beyond defensive assets such as cash, bonds, and high-dividend stocks, the US dollar depreciation trade can also help hedge AI asset risks, and increasing gold allocations may be an effective strategy for expressing this trade. In addition, the allocation value of US Treasuries may gradually improve, and the firm recommends keeping a close watch. CICC's main views are as follows:
From AI Trade to "AI Dollar," the Dollar Becomes the Dividing Line for Global Stock Market Divergence
Against the backdrop of a restructuring international monetary order, the firm believes that "de-dollarization" remains the prevailing trend and that the US dollar faces long-term depreciation pressure. However, since 2026, the dollar's movements have been relatively strong in phases. Apart from inflationary pressures triggered by geopolitical conflicts, the AI rally may provide key support. On one hand, cross-border transactions in the AI industrial chain involving advanced chips, cloud services, and computing power are often settled in US dollars, and industrial expansion may increase dollar demand in phases, forming the so-called "AI dollar" effect. On the other hand, AI investment strengthens the growth momentum of related economies, especially the United States, where nearly 30% of the expected real GDP increment in 2026 is forecast to come from AI. Economic growth resilience creates conditions for the Federal Reserve to raise rates, and rising US Treasury yields push the dollar higher. But for economies with lower AI benefits, tighter external financing conditions and capital outflow pressures brought by a stronger dollar may instead drag down economic and market performance. Under the influence of these mechanisms, the dollar has become the dividing line for divergent global stock market performance during the AI revolution: since 2026, the US, Japanese, and South Korean stock markets, which are deeply involved in the AI industrial chain, have been positively correlated with the dollar, while the Indian stock market and the Hang Seng Index, which have relatively limited AI benefits, have been negatively correlated with the dollar. Chart 1: Since 2026, the Nikkei 225 has been positively correlated with the dollar. Chart 2: Since 2026, South Korea's KOSPI has been positively correlated with the dollar. Chart 3: Since 2026, the Hang Seng Index has been negatively correlated with the dollar. Chart 4: Since 2026, the Indian stock market has been negatively correlated with the dollar. Chart 5: Since 2026, the correlation between the dollar index and major asset trends: the dollar has become the "dividing line" for global stock market divergence.
AI Trade Volatility Intensifies; Beyond Adding Defensive Assets, the Dollar Depreciation Trade Can Also Serve as a Hedge
Although the AI revolution is still in its early stages, the market has begun to worry about slowing growth among leading players and whether future returns can cover current large-scale investments. The market expects the year-over-year growth rate of capital expenditure by the US AI "Magnificent Seven" to decline from about 90% in 2026 to 36% in 2027, and uncertainty over investment returns has also intensified volatility in AI assets. Chart 6: The market expects AI capital expenditure to continue growing in 2027, but at a markedly slower pace.
Against this backdrop, increasing allocations to defensive assets such as cash, Chinese bonds, and high-dividend stocks is reasonable. Beyond that, according to the analysis above, a cooling AI trade may weaken the United States' relative growth advantage and dollar demand, and the dollar depreciation trade is also expected to hedge adjustment pressure in AI assets. Another advantage of the dollar depreciation trade is that its profit scenarios are not limited to a weakening AI rally: if the US-Iran situation eases and pushes oil prices lower, or if US inflation improves markedly and prompts the Federal Reserve to shift toward rate cuts, AI assets would benefit from improved liquidity, the dollar depreciation trade would benefit as well, and AI stocks could also rise simultaneously. Therefore, compared with simply reducing AI asset exposure, positioning for the dollar depreciation trade can both retain exposure to AI upside and provide portfolio protection across multiple scenarios. The main risk to this hedging logic is a dollar liquidity crisis. If a sharp AI correction triggers concentrated global asset selling, investors rush to cash out and obtain dollar cash, the dollar may strengthen and move inversely to stocks, rendering the hedge ineffective. However, the current AI correction mainly reflects a decline in risk appetite and asset reallocation caused by concerns over investment returns, and has not yet evolved into a disorderly liquidity shock, so the dollar and tech stocks are more likely to be positively correlated. During the recent correction in US tech stocks, the dollar index also fell from its October 14 high, consistent with this judgment. The above analysis mainly focuses on the short-term relationship between exchange rates and stocks; over a longer horizon, even if the AI revolution succeeds, stock gains may not necessarily be accompanied by dollar appreciation, because the "reverse Balassa effect" brings real exchange rate depreciation pressure.
Gold Is an Effective Tool for Positioning for the Dollar Depreciation Trade; Increasing Allocations Is Recommended
The most direct way to position for the dollar depreciation trade is to short the dollar, but foreign exchange trading faces many restrictions, and increasing gold allocations may be a more convenient strategic expression. Theoretically, as an alternative asset to the dollar system, gold has a basis for a negative correlation with the dollar, but because gold prices are also affected by multiple factors such as interest rates, inflation, and safe-haven demand, this relationship has not always been stable historically. However, entering 2026, the negative correlation between gold and the dollar has strengthened markedly, with the correlation rising to -81.2%. The dollar and gold have become two sides of the same coin, making higher gold allocations an effective tool for the dollar depreciation trade. Chart 7: Before 2026, the correlation between gold and the dollar was not stable. Chart 8: Since 2026, the negative correlation between gold and the dollar has strengthened markedly, with a correlation coefficient as high as -81.2%.
By comparison, the impact of oil prices and US Treasury yields on gold is more reflected in阶段性 disturbances: large swings in oil prices during the year did not consistently dominate gold price trends, and rising US Treasury yields also failed to consistently suppress gold performance. Chart 9: The oil price decline from May to June did not benefit gold; the August oil price surge did not suppress gold. Chart 10: After July, US Treasury yields accelerated upward, but this did not prevent gold from rising in August.
Besides gold, US Treasuries are also a potential choice for positioning for the dollar depreciation trade, but the win rate may be lower than that of gold: if dollar depreciation stems from falling inflation and Federal Reserve rate cuts, both gold and US Treasuries may benefit; if dollar depreciation stems from rising US debt risks or shaken dollar credit, gold may benefit from demand for alternative assets, while US Treasuries may fall due to rising term premiums. Historical review also supports this judgment. The firm reviewed all 91 dollar decline periods since 2000 that lasted at least 14 days. Gold rose 84 times, with a win rate of 92.3% and a median period return of 5.46%; during the same periods, 2-year and 10-year US Treasury yields fell 68.1% and 64.8% of the time, respectively. Chart 11: Since 2000, during dollar index declines, the win rate for gold gains has been higher than that of other major asset classes.
In summary, the firm recommends that, in addition to increasing allocations to high-dividend stocks, cash, and Chinese bonds, investors should increase gold allocations and position for the dollar depreciation trade to hedge AI asset risks. The allocation value of US Treasuries may also gradually improve, and the firm recommends keeping a close watch.
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