Key Market Developments: Trump's China Visit, Inflation Pressures, and MSCI Adjustments

**Pre-Market Insights**

1. **Trump Commences China Visit; Accompanying Business Leaders Revealed** * **Category:** Macro Sentiment * **Impact:** Neutral Former U.S. President Donald Trump has begun his visit to China from May 13th to May 15th. U.S. media has disclosed the list of business executives accompanying him, which includes Apple's Executive Chairman Tim Cook, Tesla founder Elon Musk, and Boeing CEO Kelly Ortberg. Notably, NVIDIA's Jensen Huang, previously reported by Reuters to be on the list, is not included, while Elon Musk, who was rarely discussed in this context, has been added.

2. **Market Pressured by Inflation and Iran Tensions; U.S. Chip and Optical Communication Stocks Widespread Pullback** * **Category:** Market Sentiment * **Impact:** Negative U.S. stock indices closed mixed on Tuesday, pressured by higher-than-expected April inflation data and increasing fragility in U.S.-Iran ceasefire prospects. The semiconductor and semiconductor equipment sector experienced a broad decline, with the Philadelphia Semiconductor Index falling over 3% intraday after a near 7% drop. Qualcomm plunged over 11%, marking its worst single-day performance since March 2020. The optical communications sector also saw a collective pullback, with Lumentum and Credo both dropping over 5%.

3. **MSCI China Index Adjustments: Adds Guangku Technology, Changfei Optical Fiber, Removes O-Film** * **Category:** Corporate Sentiment * **Impact:** Neutral MSCI, the international index compiler, announced the results of its quarterly index review for May 2026, effective after the market close on May 29th. Notably, the MSCI China Index will add 22 stocks including Guangku Technology, Changfei Optical Fiber, and Shengke Communication. Meanwhile, 24 stocks including O-Film, Goodix Technology, and Bull Group will be removed.

4. **SASAC Outlines Key "16th Five-Year Plan" Work for Central SOEs, Flagship Projects in Forward-Looking Industries** * **Category:** Macro Sentiment * **Impact:** Positive The Party Committee of the State-owned Assets Supervision and Administration Commission (SASAC) held a special meeting to review the drafting of the "16th Five-Year Plan Development Outline for Central Enterprises." The meeting emphasized strengthening project traction, deploying a series of flagship projects in areas such as strengthening and supplementing industrial chains, ensuring energy and resource security, and forward-looking industrial layout, to cultivate new drivers for high-quality development.

**Investment Calendar** U.S. President Donald Trump's visit to China.

**Investment Nugget** Investment Nugget: Success isn't about persistence. Success is about choosing the right things to persist in and quitting the rest. — [U.S.] Annie Duke, "Quit: The Power of Knowing When to Walk Away"

**Institutional Views** 1. **CITIC Securities:** Focus on structural main themes amidst a differentiated recovery, concentrating on investment opportunities in segments like consumption, technology, and resource security. 2. **Huajin Securities:** Technology growth sectors and some cyclical industries supported by policies and upward industrial trends may continue to outperform in May-June. 3. **China Galaxy Securities:** The overall upward trend remains unchanged, and the market is expected to maintain a rotational, structurally-driven pattern within sectors.

**Positive and Negative Catalysts Preview** 1. **Pop Mart's Explosive Earnings! Revenue Up to 80% Growth, Previously Bought by Duan Yongping** * **Category:** Market Buzz CITIC Securities: Positive on the continued advancement of the AI industry and the boost from IP commercialization to the media sector. For IP commercialization, focus on areas like "Guzi Economy" (merchandise), AI toys, and animated films. 2. **Tech Giants Vie for Space Computing! Google Reportedly in Talks with SpaceX to Launch Orbital Data Centers** * **Category:** Market Buzz Huafu Securities: 2026 is expected to be a critical turning point for space computing, transitioning from validation to industrial implementation. Launch, networking, and other upstream segments precede operational services, meaning revenue and profit realization for upstream manufacturing, launch, and payload sectors typically occurs earlier than for downstream platforms. 3. **Anthropic Reportedly Seeks $30 Billion Funding, Pre-Money Valuation Exceeds $900 Billion** * **Category:** Market Buzz From a medium-term perspective, high-growth areas like technology growth with upward industrial trends remain important directions. The resonance of policy support and industrial breakthroughs means AI technology is still a main theme for A-shares. AI applications, computing hardware, and upstream energy and power sectors deserve attention.

**Announcements Digest** *Positive-leaning Announcements* 1. **Hengyu Xintong:** Plans to acquire 100% equity of satellite navigation company Shendao Technology; stock to resume trading. 2. **Ankao Zhidian:** Signed a Solid-State Transformer (SST) R&D cooperation agreement with Xingchen Pubu. 3. **Jianghe Group:** Won a curtain wall project contract worth approximately 865 million yuan for Phase II of Marina Bay Sands Hotel and Shenzhen Qianwan area.

*Negative-leaning Announcements* 1. **Lida Information:** Shareholders and senior executives plan to jointly reduce their holdings by up to 2.99% of the company's shares. 2. **Seagull Co., Ltd.:** Cooling tower business from the nuclear power sector generated no revenue in 2025. 3. **Jingtou Development:** The target company intended for acquisition remained in a loss-making state for 2025 and Q1 2026.

**Overseas Markets** Market Note: U.S. stocks closed mixed under pressure from inflation and Iran tensions. Among tech giants, Tesla fell 2.6% and Microsoft dropped 1.18%. The optical communications, chip, and semiconductor equipment sectors saw widespread declines: Qualcomm tumbled over 11%, Intel and SanDisk fell over 6%, and Lumentum and Credo dropped over 5%.