Breakfast | Tariff impact causes fluctuations in US stocks, Tesla briefly drops 8%, chip stocks and Chinese concept stocks rebound

Market Overview

All three major U.S. stock indexes closed lower, with the Dow Jones down 1.55% at 42,520.99 points; the S&P 500 index down 1.22% at 5,778.15 points, erasing gains since the U.S. election; and the Nasdaq down 0.35% at 18,285.16 points. Boeing fell over 6%, and 3M Company dropped nearly 5%, leading the decline in the Dow.

The "Tech Seven Sisters" initially fell together, with some turning to gains: Nvidia turned positive after midday, rising over 3% and closing up 1.7%; Microsoft, which had fallen nearly 2% in the morning, slightly rose; Alphabet, Google's parent company, rose nearly 3% at midday, closing up 2.3%; Tesla, which had once dropped 8% in the morning, closed down 4.4%; Meta, which had fallen 4.8% in the morning, closed down 2.3%; Apple fluctuated between gains and losses, closing down nearly 0.9%; Amazon, which had dropped 3.7% in the morning, closed down 0.6%.

Chinese concept stocks generally rose, with the Nasdaq China Golden Dragon Index up 1.95%. Among popular Chinese concept stocks, GDS Holdings rose over 11%, Daqo New Energy rose over 8%, Century Internet rose over 7%, JinkoSolar rose over 7%, Kingsoft Cloud rose over 7%, Bilibili rose over 5%, and iQIYI rose over 5%. In terms of declines, Lotus Technology fell over 6%, WeRide fell over 4%, Yamafin Sports fell over 2%, and Pony.ai fell over 2%.

Attention to China's Two Sessions Agenda

The third session of the 14th National People's Congress of China will open at 9:00 AM Beijing time on March 5, with Premier Li Qiang delivering the government work report. The conference will close on the afternoon of March 11, lasting for 7 days, with 3 plenary sessions scheduled. The main agenda includes reviewing the government work report, examining the draft of the 2025 national economic and social development plan, and reviewing the draft of the 2025 central and local budgets.

The State Council Information Office will hold a press conference at 11:30 AM on March 5, where Shen Danyang, head of the drafting group for the "Government Work Report" and director of the State Council Research Office, along with Chen Changsheng, a member of the drafting group and deputy director of the State Council Research Office, will interpret the "Government Work Report" and answer questions from reporters.

China's Tariff Countermeasures

Starting from March 10, 2025, China will impose tariffs on certain imported goods originating from the United States. A 15% tariff will be imposed on chicken, wheat, corn, and cotton, while a 10% tariff will be imposed on sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy products.

The Ministry of Commerce of China stated that it has included 15 U.S. entities, including Lidos, Gibbs and Cox, Monitoring Research Company, SourceMap, and Skydio, on the export control list, prohibiting the export of dual-use items to them; related export activities currently underway must be stopped immediately.

U.S.-Canada Tariff War Begins

Starting this Tuesday, the U.S. has imposed a 25% tariff on Canada. On Tuesday, Canada announced retaliatory tariffs on U.S. products worth a total of CAD 155 billion and will challenge U.S. tariffs through the WTO and the USMCA. Trump later stated that if Canada imposes retaliatory tariffs on the U.S., the U.S. will immediately increase its equivalent tariffs by the same amount.

However, on Tuesday after the U.S. stock market closed, U.S. Secretary of Commerce Gina Raimondo stated, "Trump will reach some sort of compromise on tariffs with Mexico and Canada, which may be announced on Wednesday. Trump may reduce tariffs on both countries."

Attention to Trump's Congressional Speech

U.S. President Trump will deliver a speech on Capitol Hill at 9 PM Eastern Time on March 4 (10 AM Beijing Time on March 5). This will be his first address to a joint session of Congress since returning to the White House.

The outside world expects Trump to intensify efforts to promote his government restructuring plan (DOGE) during the speech. The latest developments regarding federal funding allocations to avoid a government shutdown, the stalled U.S.-Ukraine mineral agreement, and U.S.-NATO relations are also under close scrutiny. Elon Musk, head of the U.S. "Government Efficiency Office," has posted expressing his support for the U.S. withdrawal from NATO and the United Nations.

Another Major Bank Believes Xiaomi is a Potential AI Winner, Key Events Ahead in the Coming Months

Barclays stated that demand for Xiaomi's SU7 electric vehicle is strong, with significant order backlogs. The launch of new models and new factories will further drive growth, while the Chinese government's subsidy policies for home appliances and electronic products have also provided significant growth momentum for Xiaomi's home appliance and electronic product businesses. In the future, Xiaomi plans to open large flagship stores in overseas markets and aims to start exporting electric vehicles by 2027.

TSMC Announces Additional $100 Billion Investment in the U.S. to Build Three Chip Factories

The additional $100 billion investment includes the construction of three new wafer fabs, two advanced packaging facilities, and a major R&D team center. Analysts point out that TSMC's move may be to appease Trump and avoid his threats of imposing high tariffs on chip imports.

Apple Launches New iPad Air with Faster Processor and Upgraded Magic Keyboard

Apple Inc. announced that the new iPad Air tablet is available in 11-inch and 13-inch options, priced at $599 and $799, respectively. The iPad Air features the new M3 chip, replacing the M2 processor. Apple stated that the new iPad Air runs twice as fast as the iPad with the M1 chip. Orders are now being accepted, with shipments and availability starting on March 12.

The new model can run Apple's artificial intelligence feature, Apple Intelligence, improving processing speed for AI-based workloads by 60%.

CK Hutchison Plans to Sell 80% Stake in Hutchison Ports and 90% Stake in Panama Ports Company (PPC) to BlackRock Consortium

The board of CK Hutchison Holdings Limited announced that on March 4, the company reached a principle agreement on the initial basic terms of the transaction with BlackRock, Inc., Global Infrastructure Partners, and Terminal Investment Limited (collectively referred to as the BlackRock-TiL consortium). The transaction will involve the group selling all shares of Hutchison Port Holdings S.a r.l. (HPHS) and all shares of Hutchison Port Group Holdings Limited (HPGHL)