Breakfast | After-hours trading in the US stock market, the most concerning news for the market has arrived: high-level economic and trade talks between China and the United States are about to take place!

Market Overview

Before the Federal Reserve's interest rate decision, U.S. stocks fell for two consecutive days, with the Dow Jones down 0.95% at 40,829 points, the S&P 500 index down 0.77% at 5,606.91 points, and the Nasdaq down 0.87% at 17,689.66 points.

The seven tech giants all fell, with Tesla down 1.8%, Amazon down 0.75%, Meta Platforms down 2%, NVIDIA down 0.32%, Google C down 0.53%, Apple down 0.24%, and Microsoft down 0.66%.

Palantir, which released its earnings report after the market closed yesterday, plummeted 12%. After AMD released its earnings report after the market closed today, it saw a spike and then a pullback, while Advanced Micro Devices fell sharply.

After the U.S. market closed, news of U.S.-China economic and trade talks emerged, greatly boosting risk appetite, with the renminbi rising by over 100 points to break 7.20. The three major U.S. stock index futures surged, with Nasdaq futures rising over 1%. Spot gold fell more than 1.1%, hitting a daily low of $3,384.36 per ounce.

Today's Key Focus

At 9:00 AM Beijing time on May 7, the State Council Information Office of China will hold a press conference, with officials from the People's Bank of China, the Financial Regulatory Administration, and the China Securities Regulatory Commission introducing the "package of financial policies to support market stability and expectations" and answering reporters' questions.

News on U.S.-China Economic and Trade Talks

At the invitation of the Swiss government, He Lifeng, a member of the Political Bureau of the Communist Party of China Central Committee and Vice Premier of the State Council, will visit Switzerland from May 9 to 12 to hold talks with Swiss leaders and relevant parties. During the visit to Switzerland, Vice Premier He Lifeng, as the Chinese lead for U.S.-China economic and trade talks, will meet with the U.S. lead, Treasury Secretary Janet Yellen. From May 12 to 16, Vice Premier He Lifeng will go to France to co-chair the tenth China-France high-level economic and financial dialogue with the French side.

Chinese Ministry of Commerce Spokesperson Answers Questions on High-Level U.S.-China Economic and Trade Talks

Recently, U.S. senior officials have been actively signaling adjustments to tariff measures and have communicated with China through various channels, hoping to discuss tariffs and other issues with China. China has conducted a serious assessment of the U.S. information. Based on a full consideration of global expectations, China's interests, and the calls from U.S. industries and consumers, China has decided to agree to engage in contact with the U.S. Vice Premier He Lifeng, as the Chinese lead for U.S.-China economic and trade talks, will hold talks with U.S. Treasury Secretary Janet Yellen during his visit to Switzerland.

EU Plans to Expand Countermeasures: If Negotiations Fail, Tariffs Will Be Imposed on €100 Billion of U.S. Goods

The negotiations officially launched between the EU and the U.S. last month have made little progress, and it is expected that most U.S. tariffs will remain unchanged. If negotiations fail, the EU plans to impose tariffs on U.S. goods worth €100 billion. The EU stated on Tuesday that the trade investigation initiated by Trump will increase the total value of goods facing tariffs in the EU to €549 billion.

Tesla Faces Setbacks in Europe in April

Tesla faced boycotts due to Musk's political views, leading to a significant decline in sales across Europe in April, with Sweden experiencing an 81% year-on-year drop and Germany's sales nearly halving.

Specifically, Tesla's sales in France fell 59% year-on-year, 81% in Sweden, 74% in the Netherlands, 50% in Switzerland, 33% in Portugal, and 67% in Denmark

Jensen Huang: China's AI Market Will Reach $50 Billion

Jensen Huang stated in an interview that the scale of China's artificial intelligence chip market is expected to reach $50 billion in the coming years, making it crucial for American companies to enter this market. Previously, Xinhua News Agency reported that Vice Premier He Lifeng pointed out during a meeting with Jensen Huang that the investment and consumption potential of the Chinese market is enormous, and it has always been fertile ground for foreign enterprises' investment and trade. More American companies, including NVIDIA, are welcome to deepen their engagement in the Chinese market.

Strong AI Demand, AMD Revenue and Guidance Exceed Expectations, After-Hours Surge and Retreat

In the first quarter, AMD's revenue grew 36% year-on-year, accelerating growth, with client business revenue from PC chips increasing by 68%, setting a new quarterly high. Data center revenue growth slowed to 57%, still above expectations. The second-quarter revenue guidance median slowed to nearly 27%, still stronger than expected; after accounting for $800 million in costs from export controls, the second-quarter gross margin is expected to drop to 43%, remaining flat compared to the first quarter. After-hours stock prices initially surged over 7%, then turned to decline.

Super Micro Computer Again Lowers Full-Year Sales Expectations, Acknowledges Impact from Trump Tariffs

Super Micro Computer reported net sales of $4.6 billion for the third fiscal quarter, below analysts' expectations of $4.76 billion; it expects full-year net sales of $21.8 billion to $22.6 billion, down from its previous estimate of $23.5 billion to $25 billion; it anticipates fourth-quarter net sales of $5.6 billion to $6.4 billion, while analysts expected $6.59 billion.

Super Micro Computer (SMCI) fell nearly 5% in after-hours trading.

Apple's AI Chinese Version May Launch with iOS 18.6, Supported by Baidu and Alibaba

Reports indicate that Baidu's Wenxin Yiyan large model will serve as the core cloud-based intelligent engine for the Chinese version of Apple's AI. Meanwhile, to ensure AI content complies with domestic regulations, Apple will also introduce a review mechanism provided by Alibaba to conduct local compliance audits on AI-generated content.

"Rushing for Imports"! U.S. Trade Deficit Expanded to $140.5 Billion in March, Setting a Record High

The U.S. trade deficit in goods and services expanded to $140.5 billion in March, far exceeding the expected $137.2 billion, and increased by 14% from the previous value of $122.7 billion. Specifically, imports surged by 4.4% to a record $419 billion, with consumer goods imports hitting an all-time high, and imports of capital equipment and motor vehicles also increasing.

New Federal Reserve Communications: Concerned About Out-of-Control Inflation, Fed May Delay Rate Cuts

Nick Timiraos stated that faced with the dilemma of economic recession and inflationary pressures, the Federal Reserve is more likely to prioritize "keeping inflation in check" and may not cut rates until clear signs of slowing consumer spending and rising unemployment rates are observed