The trading week just concluded (June 1st to 5th) saw the A-share market rise initially before falling back. A total of 1,883 individual stocks posted cumulative gains, marking the best performance in nearly four weeks.
However, the most notable market feature was the loosening of the "grouping" trend in technology stocks, which had persisted for two months.
A clear piece of evidence is that the ChiNext Index, which had previously shown the healthiest trend, broke below its 20-day moving average on Friday, marking the first such occurrence since April 8th.
This time, global stock markets "coincidentally" face similar challenges. Specifically:
During Thursday's US trading session, Broadcom's stock price plummeted over 12%, dragging down other semiconductor stocks and initiating this round of adjustment.
The following day, US, Japanese, and South Korean markets experienced a "Black Friday."
South Korea's KOSPI index fell over 5%, with SK Hynix dropping nearly 10%. Japanese stocks declined under pressure from interest rate hike expectations.
In the US session, the Nasdaq Composite Index fell over 4% for the day, and the S&P 500's nine-week winning streak was snapped. The Philadelphia Semiconductor Index closed down 10.26% on Friday, with its market capitalization evaporating over $1 trillion in a single day—the largest one-day drop since March 2020.
A-share technology stocks also faced significant selling pressure on Friday, particularly in sectors with large capital capacity and substantial recent gains. Data shows 33 individual stocks had daily turnover exceeding 100 billion yuan, the vast majority of which were technology stocks that closed sharply lower.
The "CPO leader" Zhongji Innolight saw heavy volume selling, with a single-day turnover of 58.325 billion yuan ranking fourth in A-share history. It must be noted that due to its high share price, its turnover reached an extreme level, though the trading volume itself was within a normal range of increased activity.
Highlighting this detail aims to encourage a more rational perspective on this tech stock decline, rather than being driven by panic.
For instance, it is a relatively objective statement, supported by data, that the current trading concentration in the technology sector is high. On Friday, the total turnover of the Wind TMT Index (containing 1,225 constituents in technology, media, and telecommunications) reached 1.51 trillion yuan, accounting for approximately 48.7% of the total A-share turnover (3.1 trillion yuan).
Under such conditions, if investor risk appetite recedes, incremental capital decreases, and the willingness to take profits on high-priced holdings increases, technology stocks are prone to corrections. It is also a reasonable inference that there may be further downside potential.
As one research report points out, reviewing history, after TMT sector concentration becomes elevated, a shift to other industries or an internal rotation from high to low valuations within the sector may occur. Currently, a brief internal rotation within tech is possible, with AI hardware potentially remaining dominant after minor fluctuations.
However, based solely on current market performance, it is premature to directly declare the "end of the tech bull market" or the "bursting of the AI bubble." Such judgments are overly vague and could stem from mere spectatorship or genuine panic.
The aforementioned report suggests the A-share market may continue to fluctuate and build a bottom in the short term, potentially resuming its upward trend after consolidation.
Another securities firm's research report believes the market adjustment is nearing its end.
This round of broad market correction began in mid-May, with A-shares leading the decline ahead of major overseas indices. The core reason was sentiment realization following a specific event. Referring to the duration and magnitude of corrections following similar events, the broader A-share index has largely completed its move.
Furthermore, the siphoning effect of the tech sector is gradually easing. Although attempts at rotation from high to low valuations have not received positive feedback, some non-AI sectors, primarily HALO assets, are beginning to show relatively sustained profitable effects. Whether this effect can spread requires continued observation. Overall, the outlook for Q3 remains optimistic, and the adjustment may present a good opportunity for positioning.
Regarding the pace, US CPI data disclosure in early June, the SpaceX IPO, and the mid-month FOMC meeting will gradually clarify the situation. Any resulting market disturbances may provide opportunities for positioning on dips.
Of course, almost no one can maintain absolute rationality in investing. Conversely, sentiment is also a significant factor driving stock price fluctuations, which won't be elaborated on here.
It is believed that only after a trend truly ends can that series of candlestick patterns be defined as a "top." Regarding trends, mature traders should adhere to the principle of "not predicting, only responding."
Further, even if both agree that "the A-share market is likely to open with a panic sell-off on Monday (June 8th)," investors bullish on tech stocks and those bearish on them may adopt completely different strategies:
The former considers "whether (tech stocks) meet the conditions for a bottom-fishing opportunity" and acts if they do.
The latter considers "which other sectors might rise against the trend" and follows if any are identified.
Meanwhile, an even more pessimistic investor, believing the tech stock decline will drag down the entire market, is more likely to "exit" or "adopt a wait-and-see approach."
By this point, you may have realized that the focus of pre-market planning is not "guessing" where the market will go, but rather setting the conditions that trigger your trading actions—that is, how to "respond."
Once you execute your planned trades, the market will naturally provide new feedback, reflected in floating profits or losses in your account. At that point, you need the next step of response—when to take profits or cut losses?
Regarding upcoming allocation strategies, the aforementioned securities firm's report suggests: closely monitor the improvement in market breadth of profitable opportunities, selectively structure within the AI main theme, as HALO assets may soon see a turning point.
Specifically:
First, technology growth driven by AI, where the market is pricing in mid-year report prosperity and potential Q3 catalysts. Focus can be placed on core overseas computing power targets and segments within the industrial chain's equipment and materials. Relatively low-positioned AI applications are in a left-side accumulation phase.
Second, HALO assets that have undergone relatively full adjustments. Await US CPI data and policy stance indications. Recently, the broad energy sector, represented by coal, has performed well, with coal prices rising due to safety production and weather factors. Monitor its potential spillover effect on cyclical resource sectors. Core resources (non-ferrous metals + chemicals) are currently in a left-side accumulation phase, awaiting the June FOMC meeting to correct the market's overly aggressive interest rate hike expectations.
Additionally,阶段性修复行情 in thematic stocks can be monitored, focusing on directions where policy and news align, such as computing-power synergy, commercial aerospace, and robotics.
Next, let's review the weekend news flow.
【State Council Executive Meeting: Further strengthen forward-looking layout based on characteristics of future industries.】
【Wuxi: With a sense of urgency, expand wafer manufacturing, upgrade advanced packaging and testing, transform equipment and materials, and tackle emerging fields.】
【Ministry of Housing and Urban-Rural Development proposes regulations:住房公积金 can be withdrawn under one of nine specified circumstances.】
【CSRC Chairman Wu Qing: Continuously improve the regulatory mechanism for programmatic trading, resolutely crack down on illegal activities such as market manipulation and disrupting market order.】
【Friday's brutal sell-off on Wall Street attributed to three main reasons】
First, the weak earnings report from Broadcom earlier in the week triggered volatility. Second, strong non-farm payroll data dampened market confidence in Fed rate cuts within the year. Third, the upcoming massive SpaceX IPO is forcing investors to free up more capital.
【US government considers taking stakes in AI companies, having them "voluntarily transfer shares to the government."】
【Gold jewelry prices fall back to levels seen at the end of 2025】
International gold prices corrected significantly on Friday, falling below the $4,400 per ounce level, with domestic brand gold jewelry prices following suit. On January 29th of this year, the per-gram prices for Chow Sang Sang, Lao Miao Gold, and Lao Feng Xiang were 1,708 yuan, 1,722 yuan, and 1,713 yuan respectively. Compared to their annual highs, the per-gram prices for these three brands have fallen by 393 yuan, 401 yuan, and 397 yuan, respectively, all representing a 23% decline. This also erases all gains made this year, bringing prices back to parity with levels at the end of 2025.
Finally, key events for next week.
June 8th, Monday
State Council Information Office briefing on the "15th Five-Year Plan for Urban Renewal."
June 9th, Tuesday
Apple's 2026 Worldwide Developers Conference (WWDC 2026), from June 9th to 13th Beijing Time.
June 10th, Wednesday
National Bureau of Statistics releases May CPI and PPI monthly reports.
The 10th International Hydrogen and Fuel Cell Vehicle Conference, June 10th to 12th.
June 11th, Thursday
Opening of the 2026 FIFA World Cup in the United States, Canada, and Mexico.
June 12th, Friday
Elon Musk's SpaceX officially lists on the stock market, aiming to break the global IPO fundraising record with a target of $75 billion.
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