Breakfast | Tesla rises nearly 6%, leading tech giants! Solar stocks rise, steel stocks plunge

Market Overview

U.S. Secretary of Commerce's speech adds market hopes for talks, boosting U.S. stocks higher, with the S&P and Nasdaq achieving three consecutive gains, and all three major U.S. indices hitting three-month highs. Tesla rose nearly 6%, leading tech giants for three consecutive days; the chip index rose over 2%, outperforming the market for two days in a row, with TSMC's U.S. stock rising over 2% after announcing May revenue; solar stocks rose, with SolarEdge up nearly 12%. Steel stocks plunged after hours, with Cleveland-Cliffs dropping over 7% at one point.

UK data strengthens rate cut expectations, with UK bonds jumping during trading, and the 10-year UK bond yield dropping over 10 basis points during trading, bringing UK stocks close to record highs.

Bitcoin has risen for five consecutive days. Crude oil rose over 1% during trading before turning down, with U.S. oil falling from a two-month high. Gold and silver futures retreated, both dropping 1% at one point, with silver falling from its highest level since 2012.

During the Asian session, A-shares and Hong Kong stocks plunged in the afternoon, with the ChiNext index closing down over 1%, while the rare earth sector rose against the trend, with the Hang Seng index down 0.7%, and Moutai falling over 6%.

Key News

U.S. Secretary of Commerce states that negotiations are "progressing smoothly," with the S&P and Nasdaq hitting daily highs, and the Chinese concept index expanding its gains.

The U.S. is reportedly close to reaching an agreement to partially exempt tariffs on Mexican steel, causing U.S. steel stocks to plunge after hours, while the Mexican peso briefly turned positive.

Trump: The Los Angeles riot incident is a "foreign invasion."

Reports indicate that U.S. Treasury Secretary Yellen is seen as one of the candidates for the next Federal Reserve Chair.

The U.S. "stablecoin bill" will undergo procedural voting this Wednesday, paving the way for rapid legislation; South Korea's ruling party has proposed a basic law on digital assets, aiming to allow domestic companies to issue stablecoins.

The UK saw the largest drop in employment numbers since 2020, increasing expectations for a rate cut by the Bank of England, with traders fully pricing in expectations for two more rate cuts this year.

OpenAI released an enhanced reasoning model o3-pro, which reportedly has reached a partnership with Google Cloud, with o3's price cut by 80%.

Goldman Sachs's in-depth report on "autonomous driving" states that the growth rate in the Chinese market will far exceed that of the U.S., with Robotaxi fleets expected to reach 500,000 by 2030, 14 times that of the U.S.; North American Robotaxi has entered the commercialization stage, with the next step being large-scale expansion. Robotaxi will go live in two days, with test vehicles appearing on the streets ahead of schedule, and Tesla's stock price has cumulatively risen 14.5% over three days, essentially recovering the losses after Musk and Trump publicly clashed last week.

BYD joins multiple automakers such as Dongfeng and FAW, promising that supplier payment terms will not exceed 60 days.

Market Closing Report

U.S. and European stock markets: The Dow Jones rose 0.25%, the S&P 500 index rose 0.55%, and the Nasdaq rose 0.63%. The European STOXX 600 index fell 0.02% A-shares: The Shanghai Composite Index fell 0.44%, the Shenzhen Component Index fell 0.86%, and the ChiNext Index fell 1.17%.

Bond Market: By the end of the bond market, the yield on the benchmark 10-year U.S. Treasury was about 4.47%, unchanged from Monday, while the yield on the 2-year U.S. Treasury was about 4.02%, up about 2 basis points during the day.

Commodities: WTI July crude oil futures closed down 0.47%. Brent August crude oil futures closed down 0.25%. COMEX August gold futures closed down 0.34%. COMEX July silver futures closed down 0.42%. London nickel fell nearly 0.7%, while London aluminum rose nearly 0.6%.

News Details

Global Highlights

U.S. Secretary of Commerce says negotiations are “progressing smoothly”, S&P and Nasdaq hit intraday highs, and the Chinese concept stock index expands its gains.

The U.S. is reportedly close to reaching an agreement to partially exempt tariffs on Mexican steel, U.S. steel stocks plummet after hours, and the Mexican peso briefly turns positive. Media reports indicate that the new agreement will eliminate the 50% tariff imposed by President Trump on Mexican steel within a certain import volume, with the new exemption tariff import volume cap being higher than the cap allowed under similar agreements during Trump's first term. Steel stock Cleveland-Cliffs fell more than 7% after hours.

U.S. President Trump: Los Angeles riots are a “foreign invasion”. According to CCTV News, Trump stated that those who burn the American flag should be sentenced to one year in prison. Trump claimed that if he had not deployed guards, Los Angeles would have been “burned down,” and the guards deployed to Los Angeles were protecting U.S. Immigration and Customs Enforcement agents and preventing an invasion. Trump stated that the Governor of California and the Mayor of Los Angeles are “incompetent,” and the Trump administration will “liberate Los Angeles.”

Reports: U.S. Treasury Secretary Mnuchin is seen as one of the candidates for the next Federal Reserve Chairman. According to media reports, some advisors from both inside and outside the Trump administration are pushing for Mnuchin to be the next Federal Reserve Chairman, and he has become a strong contender for the position. Mnuchin responded, saying, “I have the best job in Washington. The President will decide who is best for the U.S. economy and the people.” Subsequently, the White House refuted media reports about Mnuchin potentially being a candidate for the next Federal Reserve Chairman The "Stablecoin Bill" in the U.S. will undergo procedural voting this Wednesday, paving the way for rapid legislation. If the "Stablecoin Bill" passes the 60-vote threshold, it will lay the foundation for the regulatory framework for dollar-pegged tokens. However, progressive Democrats warn that the bill lacks key safeguards to prevent systemic risks.

• The ruling party in South Korea proposes a basic digital asset bill, aiming to allow local companies to issue stablecoins. The bill stipulates that South Korean companies with a capital of 500 million won (approximately USD 368,000) or more can issue stablecoins, provided they establish a reserve-backed redemption mechanism. Following the news, KakaoPay Corp.'s stock surged 18%, marking the highest increase since January 2024.

Trump's "Big Beautiful" Bill: What is the impact on fiscal stimulus, the 899 clause "capital tax," U.S. Treasury bonds, and the dollar? Morgan Stanley points out that the "Big Beautiful" Bill will have a negligible short-term stimulus effect on the economy and will turn negative by 2028. Additionally, the 899 clause "capital tax" will create significant uncertainty for foreign investors holding U.S. assets. Finally, against the backdrop of the end of the "exceptionalism" narrative for U.S. growth and risks to capital inflows, the dollar index is expected to decline by 4-5% by the end of 2025.

UK employment numbers see the largest drop since 2020, wage growth slows. Expectations for a Bank of England rate cut rise, traders fully price in two more rate cuts from the Bank of England this year.

Chinese demand ignites, after a 35% rebound in a single month, how long can platinum's surge continue? Strong demand from Chinese buyers has propelled platinum to soar 35% from its April low, breaking through the key resistance level of USD 1,100 and heading towards USD 1,220, reaching a four-year high. As gold has become too expensive and volatile, platinum offers a balance between the risks and price fluctuations of gold. Analysts predict that global platinum demand will continue to exceed supply over the next decade.

• Platinum and silver steal the spotlight from gold. UBS points out that the strong performance of platinum and silver is driven by five common factors: expectations of a market supply gap that will fundamentally support prices; the relative value appeal compared to gold becoming apparent after previous underperformance; relatively light investor positions; technical breakthroughs at key resistance levels; and thinner liquidity in the platinum market compared to gold, making price fluctuations easier to amplify
• Gold Arbitrage Wave: Wall Street's Major Banks Are Cashing In! Tariff panic has triggered arbitrage opportunities, with large amounts of gold and silver flowing into U.S. futures exchange warehouses. Precious metals traders at top Wall Street investment banks achieved their best performance in five years in the first quarter of 2025; the first quarter precious metals revenue of 12 major banks reached $500 million, the second highest record in a decade. Morgan Stanley delivered 67 tons of gold in the first quarter to settle its proprietary positions on the New York Stock Exchange, valued at approximately $7 billion.

OpenAI Releases Enhanced Reasoning Model o3-pro.

While "Backstabbing" Microsoft, OpenAI Is Reportedly Partnering with Google Cloud, with o3 Price Cut by 80%. Media reports indicate that OpenAI has been in discussions with Google for months and finalized a partnership agreement last month, with Google Cloud providing computing power for OpenAI to train and run models, which was previously hindered by OpenAI's lock-in agreement with Microsoft. Until January of this year, Microsoft was OpenAI's exclusive cloud service provider.

Coreweave and Circle Ignite U.S. IPOs, Two More Hot Stocks Set to Go Public. Two highly anticipated companies, fintech firm Chime Financial and aerospace defense company Voyager Technologies, are about to face the ultimate market test. Analysts point out that "investors who missed out on CoreWeave may experience FOMO."

• Chime Goes Public on Thursday, the "Alipay" and "Huabei" for America's Poor. Chime provides financial services similar to "Alipay + Huabei" for low-income Americans through no-fee accounts, cash advances, and smart savings tools. Chime is valued at over $11 billion, significantly down from its peak of $25 billion in 2021. However, early investor Crosslink Capital turned a $6.4 million investment into $430 million, yielding over 67 times return.

• Last Week's Stock Doubled in a Week, Up 300% After Going Public: "NVIDIA's Favorite Child" CoreWeave Is Hot. The core logic driving CoreWeave's stock price surge is that it is seen as one of the few public market tools allowing investors to indirectly bet on OpenAI's success, while also being a preferred partner of NVIDIA. Analysts state that CoreWeave's IPO lock-up period will expire in September, which could be a key moment in determining its stock price direction Goldman Sachs "Autonomous Driving" In-Depth Report: China's Market Growth Rate Will Far Exceed That of the U.S., By 2030, the Robotaxi Fleet Will Reach 500,000, 14 Times That of the U.S.; Automobile Insurance Will Undergo Major Changes, Accident Frequency, Claims Distribution, and Legal Liability Will All Change; North American Robotaxi Has Entered the Commercialization Stage, Next Step is Large-Scale Expansion.

• Goldman Sachs expects that the Chinese Robotaxi market will grow from $54 million in 2025 to $12 billion by 2030, while the U.S. will only increase from $300 million to $7 billion during the same period. By 2030, China's Robotaxi fleet will reach 500,000, which is 14 times that of the U.S. (35,000). In terms of costs, the cost of dedicated autonomous driving vehicles in China has fallen below $40,000 (Baidu Apollo Go is only $29,000), which is more than 50% lower than in the U.S.

• Goldman Sachs believes that the automobile insurance industry will maintain moderate growth over the next 10-15 years, but as autonomous driving technology continues to penetrate, long-term accident frequency will significantly decrease, claims complexity will increase, and the distribution of legal liability may shift from individuals to manufacturers or technology providers, prompting insurance products to transition to product liability insurance and cybersecurity insurance.

• The Goldman Sachs report shows that North American autonomous taxis have officially entered the commercialization stage, with Waymo operating over 1,500 vehicles. Tesla plans to launch commercial operations in Austin this month, and it is expected that by the end of 2025, there will be 1,800 commercial autonomous vehicles in the U.S. By 2030, the U.S. shared mobility market is expected to grow from $58 billion to $336 billion, with autonomous taxis accounting for a $7 billion share.

Robotaxi Launches in Two Days, Test Vehicles Appear on the Streets Early, Tesla's Stock Price Has Basically Recovered from Last Week's Drop After Musk and Trump Publicly Clashed. Previous reports indicated that Tesla's Robotaxi plan would launch on June 12 in Austin, Texas, and a recent video released by Tesla executives showed test vehicles appearing on the streets of Austin ahead of schedule, suggesting that the launch of the robot taxi service has entered its final stage. Tesla's stock price has risen 14.5% over three days.

BYD joins Dongfeng, FAW, and several other automakers, promising that supplier payment terms will not exceed 60 days.

Domestic Macro

General Office of the CPC Central Committee and General Office of the State Council: Opinions on Deepening the Reform and Innovation of the Comprehensive Reform Pilot in Shenzhen and Expanding Opening Up. The "Opinions" mention promoting the high-quality development of the real economy empowered by finance, technology, and data. It allows enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area listed on the Hong Kong Stock Exchange to be listed on the Shenzhen Stock Exchange according to policy regulations Support Shenzhen in deepening the reform and innovation of unmanned aerial vehicle flight management systems and improving low-altitude flight supervision rules.

People's Daily Front Page Interview with Ren Zhengfei: The more open the country is, the more it will promote our progress. Ren Zhengfei said that for silicon-based chips, we can use mathematics to complement physics, non-Moore to complement Moore, and by utilizing the principles of cluster computing, we can meet our current needs. Software cannot choke us; it is mathematical graphical symbols and codes, built up by some cutting-edge operators and algorithms, without any blocking ropes. The difficulties lie in our education and talent development. Artificial intelligence may be the last technological revolution for human society, though there may still be energy nuclear fusion. The development of artificial intelligence will take decades or even centuries. There is no need to worry; China also has many advantages.

Domestic Companies

Tencent Music plans to acquire Himalaya for $1.26 billion in cash. In addition to cash payments, Tencent Music will grant Himalaya's relevant shareholders no more than 5.1986% of Tencent Music's total issued and outstanding Class A common stock and will issue no more than 0.37% of the total shares of Class A common stock to its founding shareholders as incentives. Tencent Music's stock rose 8% in pre-market trading but closed slightly down.

AI demand remains strong, TSMC's May revenue reaches NT$320.52 billion, a year-on-year increase of 39.6%. TSMC's sales in May reached NT$320.52 billion, a year-on-year increase of 39.6%, slowing from last month's 48.1% year-on-year growth, and a month-on-month decrease of 8.3%. TSMC's cumulative sales for the first five months reached NT$1.51 trillion, a year-on-year increase of 42.6%.

Report: Volcano Engine's revenue will double to 25 billion this year, with usage almost equal to the sum of Alibaba and Baidu. ByteDance's Volcano Engine held the 2025 Power Conference in Beijing on June 11-12, with the Doubao family set to undergo a full upgrade. Volcano Engine's revenue is expected to exceed 12 billion in 2024, with a target of doubling to 25 billion in 2025, and its market share of large model usage reaching 46.4%, surpassing the total of Alibaba Cloud and Baidu Intelligent Cloud.

Deutsche Bank: Pop Mart's global market and full category are "in full bloom," with stock prices expected to break 300 HKD. Deutsche Bank believes that Pop Mart's cross-cultural appeal means its market potential far exceeds previous expectations, and its penetration in the European and American markets may just be beginning; with the accelerated expansion into overseas markets and product category expansion, profitability is expected to be further consolidated FAW, Dongfeng, GAC, Seres, and BYD Commit: Payment Terms Not Exceeding 60 Days! FAW Group, Dongfeng Motor, GAC Group, and Seres Group have issued a statement committing to control payment terms within 60 days. FAW Group will improve mechanisms, optimize processes, and leverage technology to ensure timely payments; Dongfeng Motor officially announced that it will unify payment terms to within 60 days; GAC Group insists on a payment term of within 60 days to ensure the turnover of supply chain funds; Seres will make payments according to the contractually agreed 60-day term, achieving a win-win situation between the manufacturer and suppliers. Subsequently, BYD also announced that it will unify supplier payment terms to within 60 days.

Overseas Macro

US Stocks Are Experiencing "The Biggest Short Squeeze in Years," Is the Next Target "Small Caps"? Historically, when the most shorted index by Goldman Sachs rises more than 15% within two weeks, the market tends to maintain a steady upward trend afterward. This index has surged 42% from its April low and has jumped over 10% in the past five days. Goldman Sachs pointed out that although demand from CTAs has begun to weaken in most markets, the short squeeze potential of low-quality stocks in the Russell 2000 index has yet to be fully tapped.

After Successfully Bottom-Fishing in April, Retail Investors in Korea and Japan Begin to "Withdraw" from US Stocks. Retail investors in Korea turned net sellers of US stocks for the first time in May, while Japanese retail investors recorded the largest reduction in holdings since April 2023. The number of traders in Singapore purchasing US stocks dropped by 25% compared to the previous month.

World Bank Warns: The Current Decade Faces the Weakest Global Growth Performance Since the 1960s. Affected by trade conflicts and policy uncertainties, the World Bank on Tuesday lowered its global GDP growth forecast for 2025 from 2.7% to 2.3%, warning that the 2020s could become the weakest decade since the 1960s. In this forecast adjustment, the economic growth rate of 70% of countries was downgraded. Among them, the US GDP is expected to grow only 1.4% in 2025, a downgrade of 0.9% from previous forecasts.

US Government Lowers Next Year's Oil Production Forecast, First Downgrade Since 2021. The EIA's latest forecast indicates that US crude oil production will decline from a record daily output of 13.5 million barrels in the second quarter of this year to 13.3 million barrels per day by the fourth quarter of 2026. The EIA noted that the number of active drilling rigs reported by oilfield services company Baker Hughes fell more than expected last month. The EIA expects oil prices to continue to decline as global inventories increase. Analysts say that Trump's energy strategy has encountered setbacks, as Trump previously stated that US crude oil producers would ramp up production

Overseas Companies

Morgan Stanley reviews WWDC conference: Lack of significant AI updates, Apple's AI story may take longer to realize. Morgan Stanley believes that although Apple has launched the "Apple Intelligence" feature, the upgrades to AI capabilities are limited, and a more personalized Siri is still awaited, with only 20% of iPhones currently supporting the new AI features. Apple still has key elements to win in the AI era due to its strong ecosystem, user base, and privacy standards, but investor sentiment may not see significant changes in the short term.

Disappointed by Llama 4, Zuckerberg personally leads recruitment to form a new "super-intelligent" AI team. The Llama 4 released in April this year left Zuckerberg deeply disappointed, as he repeatedly emphasized internally the desire to have the best AI product by the end of the year, but the model's performance has faced skepticism both internally and externally. Zuckerberg had to become a top headhunter, personally recruiting about 50 experts to form a secret "super-intelligent" AI team, even rearranging the office desks at the company headquarters so that new employees could sit near him.

Meta agrees to acquire 49% stake in Scale AI for $14.8 billion, marking its largest external AI investment to date.

GLP-1 drugs reshape consumer habits, Wall Street rarely downgrades McDonald's rating. Redburn Atlantic analyst Edward Lewis has become the first analyst to downgrade McDonald's rating recently, lowering it from "buy" to "sell," citing that GLP-1 weight loss drugs will suppress consumer appetite. He warned that these drugs will trigger widespread behavioral changes, affecting group dining and reducing habitual demand, especially among low-income consumer groups.

Today's News Preview

U.S. May CPI.

U.S. Treasury Secretary Janet Yellen testifies before the House committee.

Huawei Pura 80 series and full-scenario new product launch event.

NVIDIA holds GTC conference until June 12. Jensen Huang will deliver a keynote speech at 5:00 PM Beijing time on the 11th.

U.S. EIA crude oil inventory changes last week.