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Today, A-shares underwent a session of consolidation on reduced volume. By the close, the Shanghai Composite Index gained 0.19% to 3,697.52 points, the Shenzhen Component Index fell 1.19% to 11,534.38 points, the ChiNext Index dropped 1.71% to 2,638.23 points, and the Beijing Stock Exchange 50 Index declined 2.13% to 963.95 points. Combined turnover across the three markets reached 1.623 trillion yuan, shrinking by 349.7 billion yuan from the previous day. More than 3,100 individual stocks declined across the entire market. In terms of sectors and themes, pharmaceutical commerce, gaming, and baijiu sectors led gains, while components, precious metals, and CPO sectors lagged.
On the trading floor, the pharmaceutical commerce sector surged against the trend, with Intech Group and Saili Medical hitting the daily limit, while Shuyu Civilian, Jointown, Dashenlin, Shanghai Pharmaceuticals, and Jianzhijia followed higher. The gaming sector fluctuated upward, with Dianhun Network hitting the daily limit, Shengtian Network rising over 10%, and Yaoji Technology, Bingchuan Network, Ourpalm, Fuchun, and Kaiser Culture following gains. The baijiu sector opened lower but climbed higher, with Huangtai Liquor hitting the daily limit, while Jinzhongzi Liquor, Jinshiyuan, Yingjia Liquor, Gujing Distillery, and Luzhou Laojiao followed higher. The components sector plunged sharply, with Jin'an Guoji, Huazheng New Material, Aoshikang, and Aohong Electronics touching the daily limit, while Sanhuan Group and Nanya New Material fell over 10%, and Wanyuantong, Shengyi Technology, Xunjiexing, Chaosheng Electronics, and Tianjin Pulin followed lower. Impacted by the decline in international gold prices, the precious metals sector weakened significantly, with Chifeng Gold briefly touching the daily limit, while Zhaojin Gold, Zijin Mining, Shanjin International, and Xingye Yinxi followed lower. The CPO sector remained weak, with Linktel Technologies and Yute Optoelectronics falling over 15%, Huashengchang hitting the daily limit, and Shengyi Technology, Wanyuantong, and Chaosheng Electronics dropping over 9%.
After last Friday's "great miracle day," the market failed to sustain its strength today. The core issue lies not in the magnitude of the index decline itself, but in the fact that last Friday's rebound did not fully restore market confidence. The Shanghai Composite's positive close relied on support from defensive sectors such as oil, consumer goods, and healthcare, while the ChiNext and Shenzhen Component fell over 1%. Turnover across the two markets shrank by more than 300 billion yuan compared to Friday, with incremental capital almost entirely absent. Behind this phenomenon, several key factors are actually at play.
First, AI hardware led declines once again, serving as the concentrated release point of structural pressure today, driven by two parallel logics. At the industry narrative level, the direct trigger was Nvidia's CPO expansion list excluding mainland Chinese manufacturers, prompting the market to reassess the positioning risks of domestic computing hardware in the next-generation technology roadmap. More fundamentally, concerns over the sustainability of AI computing capital expenditure are accumulating — overseas giants' capex growth expectations are declining, the return cycle for domestic computing investment is lengthening, and the hardware segment, as the most front-end and fully valued link, is the first to bear the pressure of downward earnings revisions. At the trading structure level, AI hardware represents one of the areas with the largest accumulated gains this year and the most concentrated institutional holdings. Last week's concentrated liquidation was not thorough, and margin financing lacked absorption capacity in a shrinking volume environment. Any negative catalyst triggers passive position reductions, creating a fragile pattern of "no rally on good news, amplified decline on bad news."
Second, the simultaneous weakness in Japanese and South Korean stock markets constituted an external resonance for the AI hardware selloff. Recently, Japanese and South Korean markets have experienced consecutive pullbacks, with chip stocks such as South Korea's Samsung Electronics and SK Hynix leading declines. The core drag is precisely the wavering confidence of global investors in the sustainability of AI trades. Notably, as the pricing frontier of the global semiconductor supply chain, the declines in Japan and South Korea point to the same issue as the pullback in A-share AI hardware: in a high interest rate environment, the market is systematically revising down return expectations for AI capital expenditure. The selloff in A-share AI hardware is not an isolated structural rotation, but a domestic reflection of global tech stock deleveraging.
Third, the sharp rise in international oil prices further suppresses risk appetite through the inflation-rate pathway. Brent crude briefly broke through $116 per barrel, with escalating Middle East geopolitical conflicts and navigation risks in the Strait of Hormuz as core drivers. Oil prices returning to triple-digit territory directly alters expectations for central bank rate paths: the previously priced-in rate cut space has been compressed, and the phrase "a moderate rate hike cycle has already begun" is starting to appear in mainstream institutional assessments. The valuation anchor for growth stocks has therefore shifted further upward, and AI hardware, as the asset with the longest duration and fullest valuation, bears the brunt. Meanwhile, the oil sector becomes the mirror beneficiary of the same logic — PetroChina rose nearly 5% on the day, with its share price hitting a more than 18-year high, precisely indicating that capital has not left the market but is migrating from "rate-sensitive assets" to "inflation-benefiting assets." This structural divergence itself is how existing capital reprices macro risks in a shrinking volume environment.
Finally, a more macro constraint comes from wait-and-see sentiment suppressing risk appetite. This week is a "super central bank week," and before the Federal Reserve's interest rate decision lands, the valuation anchor for growth sectors remains in an uncertain state. The Fifth Plenary Session is being held on the same day, with policy signals yet to be released. Before these two major event windows open, capital is neither willing to chase rebounds nor eager to cut losses at low levels — shrinking volume itself is the position expression of wait-and-see sentiment. AI hardware, as the asset most sensitive to liquidity and risk appetite, naturally becomes the first target for position reduction during the wait-and-see period.
In summary, today's consolidation on reduced volume is the result of four overlapping factors: the fragility of the rebound, the fragility of AI hardware's trading structure, the resonance of Japanese and South Korean tech stock deleveraging, and oil prices pushing up rate expectations. The key observation point going forward is not whether the index makes new lows, but whether trading volume can effectively expand again after events land, and whether AI hardware can show stabilizing signals with absorption capacity after negative factors are digested. Regarding recent market conditions, A-shares have been in a one-sided decline since the National Day holiday, but mysterious capital has been aggressively buying on the left side, and this "buying more as prices fall" behavior suggests limited downside space. Ultimately, under the combined forces of the market on Friday, a long-awaited large bullish candle was strongly formed. Going forward, close attention must be paid to changes in trading volume. If it can continue to moderately expand and gradually stabilize above 2 trillion yuan, then the sustainability of the market rebound will be assured. If trading volume shrinks again, it indicates the market may need further consolidation. From a medium-term perspective, the structural slow bull pattern for A-shares remains unchanged. First-half performance was mainly driven by valuation, while second-half earnings are expected to take over as the core driver. The domestic liquidity environment remains favorable, policy signals for stabilizing growth are clear, residents' potential for entering the market has not been fully released, and fundamental recovery provides solid support for the market. Investors can adopt a barbell allocation strategy, thereby adopting a posture of "able to attack and able to defend" to better navigate future market conditions.
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