Breakfast | The Federal Reserve remains steady, Trump "strikes" to stimulate chip stocks! NVIDIA rises over 3%

Market Overview

In early trading, U.S. stocks opened higher, driven by news of upcoming economic and trade talks between China and the U.S.

During the morning session, Apple executives announced plans for a major overhaul of Safari, targeting AI search, posing a severe challenge to Google's search dominance. Subsequently, Google briefly fell over 9%, and Apple dropped over 2%, leading to a decline in the Nasdaq.

In the afternoon session, the Federal Reserve announced it would not lower interest rates, adding a new statement to its rate decision: "The risks of rising unemployment and inflation have increased." With stagflation risks present, the three major U.S. stock indices hit new daily lows.

In the late session, Powell reassured the market, stating that the economy remains robust, and rejected the idea of preemptive action due to Trump’s tariffs. The S&P 500 turned from decline to rise, fluctuating upward. Reports indicated that Trump would revoke the global AI chip export restrictions established during Biden's administration. Following this news, chip stocks rallied in the late session, with NVIDIA rising nearly 5% from its daily low.

Overall, U.S. stocks ended a two-day decline, with the S&P 500 closing higher. Disney surged nearly 11% post-earnings, while Arm plummeted over 11% and Applovin briefly soared 19%.

Chinese Foreign Ministry Responds to High-Level China-U.S. Economic and Trade Talks: This Meeting Was Held at the Request of the U.S. Side

Chinese Foreign Ministry spokesperson Lin Jian stated that the U.S. side has recently expressed a desire to negotiate with China. This meeting was held at the request of the U.S. side, and China's firm opposition to the U.S. abusing tariffs remains unchanged. At the same time, we have repeatedly stated that China is open to dialogue, but any dialogue must be based on equality, respect, and reciprocity. Any form of pressure or coercion will not work on China. China will firmly safeguard its legitimate interests and uphold international fairness and justice.

Federal Reserve Again Pauses Interest Rate Cuts, Warns of Stagflation Risks, Reiterates Increased "Uncertainty"

• The Federal Reserve's statement indicated that the uncertainty surrounding the economic outlook has "further" increased, adding the new phrase "The risks of rising unemployment and inflation have increased"; it reaffirmed that recent indicators show economic activity is still expanding robustly but noted that fluctuations in net exports have affected the data.
• Powell stated that high tariffs could lead to rising inflation and unemployment, and it is too early to determine which risk is more severe; current monetary policy is moderately restrictive, and the potential inflation outlook is good, with a wait-and-see approach being a clear decision; it is impossible to act preemptively because we do not know how to respond until more data is seen; the impact of tariffs has not yet arrived, and the policy's effect on inflation could be temporary or more lasting; for at least the next year, the Federal Reserve's inflation and employment targets will not make progress; negotiations could substantially change the trade situation, or they may not; U.S. GDP may be revised upward, making it difficult to accurately interpret GDP due to import surges; it will not be influenced by Trump's calls, and there has been no request to meet with the president; the growth path of government debt is unsustainable.

Media Reports Trump Plans to Revoke Biden's AI Chip Restrictions

Media reports indicate that as part of efforts to modify semiconductor trade restrictions, the Trump administration plans to revoke the artificial intelligence (AI) chip restrictions established during Biden's presidency. Subsequently, a spokesperson from the U.S. Department of Commerce confirmed this news.

The plan to revoke the restrictions aims to reframe an export control policy introduced during Biden's presidency. The Trump administration will not implement the so-called "AI Diffusion Framework" on the planned effective date of May 15 The "AI Diffusion Framework" policy was released by the U.S. Department of Commerce in January this year, categorizing the export destinations of chips from companies like NVIDIA into three major categories of countries for regulation, aiming to further restrict the export of AI chips and technologies.

Apple Plans Major Overhaul of Safari, Targeting AI Search; Google Drops Over 9%, Facing Severe Challenges to Its Position

The era of search dominated by Google may be coming to an end. The application of Apple's browser search saw its first decline in April. Apple is "actively considering" a significant overhaul of its Safari browser on its devices, shifting focus to an AI-driven search engine. This decision could end the long-standing partnership between Apple and Google, triggering a major shift in the industry and challenging Google's dominance in the search field.

Tesla's Sales in China Decline 6% Year-on-Year in April, Marking Seven Consecutive Months of Decline

In April 2025, Tesla's wholesale sales in China were 58,459 vehicles, a 6% decrease compared to the same period in 2024. Tesla also faced setbacks in the European market, with two-digit declines in six major markets.

Arm's Earnings and Revenue Exceed Expectations, but Guidance Disappoints; Shares Plunge Over 11% After Hours

Chip design giant Arm released its financial report, with earnings and revenue both exceeding expectations, but the guidance was lackluster, projecting first-quarter revenue of $1 billion to $1.1 billion, while analysts expected the upper end of the range to be $1.1 billion. Arm's expectations align with those of its peers in the chip industry, which had previously indicated to investors that the start of 2025 was strong, but the economic environment made forecasts more uncertain.

Disney Rises Over 10%; Strong Theme Park and Streaming Business, Q2 Performance Exceeds Expectations and Annual Profit Guidance Significantly Raised

Disney's revenue and earnings per share both exceeded expectations: Disney's second-quarter revenue was $23.62 billion, higher than the expected $23.05 billion, a 7% year-on-year increase; adjusted earnings per share were $1.45, also above the expected $1.20, marking a significant 20% year-on-year growth.

Annual profit expectations significantly raised: Disney expects adjusted earnings per share to grow 16% year-on-year to $5.75, higher than the market expectation of $5.44, approximately double the previously expected growth. Additionally, Disney anticipates annual operating cash flow of $17 billion, up from the previously expected $15 billion, also exceeding the market estimate of $14.8 billion.

Furthermore, Disney expects stronger performance from its park business in the second half of the year while continuing to improve the profitability of its streaming business.

Novo Nordisk Q1 Sales Growth of 19% Year-on-Year Falls Short of Expectations, Lowers Annual Sales Guidance

Novo Nordisk's first-quarter sales were 78.1 billion Danish kroner, below the expected 78.7 billion Danish kroner, and sales of its flagship weight loss drug Wegovy also fell short of expectations. Due to lower-than-expected market penetration from the U.S. "supplement industry," the annual growth guidance was lowered by 3 percentage points from the originally expected 16%-24% to 13%-21%.

The Largest Buyback Wave in U.S. History Has Arrived; Amid Uncertainty, Companies Choose to "Buy Back" Themselves

According to data from Deutsche Bank, S&P 500 companies are expected to buy back $192 billion worth of stock in the coming months, marking the highest weekly record since 1995 Under the shadow of uncertainties such as trade tariffs, companies are more inclined to deploy large cash reserves through buybacks.

How significant is the tariff impact? Wall Street closely monitors port, truck, and supply chain data

When the economic outlook is unclear, traders typically focus on shipping and logistics data, with transportation stocks often seen as a "barometer" of the market. The import volume at the Port of Los Angeles is expected to decline by 35% this week compared to the same period last year; trucking companies are reducing orders for heavy trucks, with the cancellation rate for North American heavy truck orders reaching a nearly two-year high in March.

OpenAI: Microsoft should take less revenue share, Microsoft: Give me more technology

OpenAI plans to significantly reduce the revenue share it gives to Microsoft from the current 20% to 10% by 2030. Microsoft hopes to continue using OpenAI's intellectual property after its restructuring, and both parties are negotiating on aspects such as the Azure cloud server agreement. Analysts point out that a current unresolved issue is whether the existing agreement covers products that OpenAI has not yet released or that have not yet generated revenue