Breakfast | Trump announces a new round of high tariffs: 100% on pharmaceuticals, 50% on building materials, 30% on furniture, 25% on heavy trucks

Market Overview

The U.S. GDP growth exceeded expectations, coupled with a decline in initial jobless claims, strong data has increased uncertainty regarding the Federal Reserve's future rate cut path, and market expectations for a rate cut in October have cooled somewhat. The three major U.S. stock indices fell for three consecutive days, marking the longest losing streak in a month, all giving back gains made after the Federal Reserve's September meeting.

Oracle dropped over 5%; Tesla fell over 4%; nuclear power leader OKLO plummeted 9%, as Goldman Sachs' research report deemed the company's valuation too high. Chinese concept stocks index rose against the market trend.

U.S. Treasury yields across major maturities rose, with the interest rate-sensitive 2-year yield up 4.5 basis points. The dollar rose for two consecutive days, reaching a three-week high, with the dollar nearing 150 against the yen.

Bitcoin fell below $110,000, down 3.62%. Ethereum plunged over 7% during the day, hitting $3,823 at one point, a seven-week low. Solana dropped 7.2%, marking a six-day losing streak.

Spot gold rebounded 0.38%. Silver broke through $45, reaching a new high in fourteen years. Oil prices initially fell before rising, with U.S. oil up nearly 2% from the day's low.

During the Asian session, the ChiNext index reached a new three-year high, with "Ning Wang" surpassing Kweichow Moutai in total market value. The Hang Seng Index rose nearly 1%, Xiaomi surged 5% in the afternoon, government bonds showed divergence, and commodities broadly rose.

Key News

According to CCTV News, on September 25 local time, U.S. President Trump announced on his social media platform "Truth Social" that starting October 1, the U.S. will implement a new round of high tariffs on various imported products. The measures include a 50% tariff on kitchen cabinets, bathroom sinks, and related building materials, a 30% tariff on imported furniture, and a 100% tariff on patented and branded pharmaceuticals.

Additionally, Trump also announced that starting October 1, a 25% tariff will be imposed on all imported heavy trucks.

The digital renminbi international operation center has officially commenced operations, launching three major platforms for cross-border digital payments, blockchain services, and digital assets.

The U.S. second-quarter GDP growth has been revised up to 3.8%, reaching a nearly two-year high, with the PCE price index at 2.6%. The number of initial jobless claims in the U.S. last week significantly dropped to 218,000, the lowest since July.

All living former Federal Reserve chairs, several former Treasury secretaries, and former White House economic advisors sent a letter to the Supreme Court, urging not to dismiss Federal Reserve Governor Cook!

Federal Reserve Governor Milan: Advocates for a 50 basis point rate cut each time, aiming to quickly reach neutral rates through "temporary and significant" cuts. Federal Reserve Vice Chair for Supervision Bowman: The "fragile" job market proves that further rate cuts are warranted. Federal Reserve voting members next year are calling for reforms to interest rate tools: It is time for the Federal Reserve to prepare a new benchmark

Historically Rare! The White House warns of potential permanent layoffs during government shutdown, budget deadlock escalates.

The United States is reported to pressure South Korea to increase investment commitments by nearly $200 billion, demanding cash instead of loans.

Cryptocurrency continues to plummet, with Ethereum falling below the $3,900 mark, leading to massive liquidations for bulls!

Xiaomi 17 "increases capacity without raising price," starting at 4,499 yuan, with the 17 Pro starting at 4,999 yuan, featuring the innovative "Smart Enjoy Back Screen." Xiaomi is just an assembly factory with no technology? Lei Jun: Chips are the necessary path to success, requiring at least ten years and an investment of at least 50 billion; in his fifties, it's the age to take risks.

Xiaomi Auto will enter Europe by 2027. BYD's sales in Europe surged 200% year-on-year in August, surpassing Tesla for two consecutive months.

South Korea's strongest Web2 and Web3 merger, "Korean Google" will acquire "Korean Binance," planning to launch a won stablecoin and expand globally.

Market Report

US and European Stock Markets: The S&P 500 index closed down 0.50%, at 6,604.72 points. The Dow Jones fell 0.38%, closing at 45,947.32 points. The Nasdaq dropped 0.50%, closing at 22,384.698 points. The European STOXX 600 index closed down 0.66%, at 550.22 points.

A-shares: The Shanghai Composite Index fell 0.01%, closing at 3,853.30 points; the Shenzhen Component Index rose 0.67%, closing at 13,445.90 points; the ChiNext Index rose 1.58%, closing at 3,235.76 points.

Bond Market: The yield on the 10-year US Treasury rose by 2.13 basis points, at 4.1678%. The yield on the 2-year US Treasury rose by 5.73 basis points, at 3.6573%.

Commodities: WTI November crude oil futures closed down 0.02%, at $64.98 per barrel. Brent November crude oil futures closed up 0.16%, at $69.42 per barrel. COMEX gold futures rose 0.38%, at $3,782.60 per ounce.

News Details

Global Highlights

The Digital Renminbi International Operation Center officially launches, offering cross-border digital payment, blockchain services, and digital asset platforms. According to Xinhua News Agency, the digital renminbi blockchain service platform provides standardized cross-chain transaction information transfer and on-chain digital renminbi payment services for various scenarios and industries; Digital asset platforms can provide standard, ready-to-use financial-grade digital asset services, supporting existing financial infrastructure to expand their business onto the blockchain.

U.S. Q2 GDP growth revised up to 3.8%, a nearly two-year high, PCE price index at 2.6%. The final annualized quarterly rate of U.S. Q2 GDP was significantly revised up to 3.8%, higher than the previous revision of 3.3%, marking the strongest performance since a 4.7% growth recorded in Q3 2023. The revision was mainly due to unexpectedly strong consumer spending and a decline in imports. However, this strong report also indicates that inflation pressures are more persistent than previously assessed.

Last week's initial jobless claims in the U.S. fell sharply to 218,000, the lowest level since July.

All living former Federal Reserve chairs, several former Treasury secretaries, and former White House economic advisors wrote to the Supreme Court, urging not to dismiss Federal Reserve Governor Lisa Cook!

• On Thursday, all living former Federal Reserve chairs, along with several former U.S. Treasury secretaries, former White House economic advisors, and economists urged the U.S. Supreme Court not to allow Trump to dismiss Federal Reserve Governor Lisa Cook. In a brief submitted to the Supreme Court justices on Thursday, they stated: If Trump is allowed to dismiss her during Cook's challenge to her removal, it would undermine public trust in the Federal Reserve and disrupt efforts to stabilize prices, increase employment, and regulate long-term interest rates.
• On the same day, Cook's attorney stated in new documents submitted to the Supreme Court that even a temporary dismissal of Cook could potentially cause chaos and disruption in the financial markets.

Federal Reserve Governor Milan: Advocates for a 50 basis point cut each time to quickly reach the neutral rate through "brief and substantial" cuts. Milan warned that the current policy rate of the Federal Reserve is far above his estimated "neutral" level and is in a "highly restrictive" range, making the economy more vulnerable to downward shocks. The Federal Reserve "can achieve its goal through a very brief round of cuts, each by 50 basis points."

Federal Reserve Vice Chair for Supervision Bowman: The "fragile" job market proves that further rate cuts are warranted. Bowman stated on Thursday that the inflation rate is sufficiently close to the Federal Reserve's target, within the target "range," and the impact of tariffs on price increases may be one-time.

Federal Reserve voting members next year call for reform of rate tools: It’s time for the Federal Reserve to prepare a new benchmark** Logan suggested replacing the three-party general guarantee rate (TGCR) as it has a daily trading volume exceeding one trillion dollars, far surpassing the current benchmark federal funds rate market size of less than one hundred billion dollars. She stated that changes in TGCR can effectively transmit to various money markets, and its moderate fluctuations are acceptable; such reforms will not broadly impact monetary policy or interfere with balance sheet reduction, and the benchmark should be replaced in advance while the market operates smoothly, rather than adjusting when issues arise in the transmission of money market rates.

Historically Rare! White House Warns of Permanent Layoffs During Government Shutdown, Budget Stalemate Escalates. The White House has asked federal agencies to prepare for permanent layoffs during a government shutdown, a move that far exceeds previous temporary furlough practices, aimed at pressuring the Democrats. The Democrats responded strongly, stating they will not be "extorted" or "intimidated," and questioned the legality of the directive. If the two parties cannot reach an agreement by October 1, some federal employees will face the risk of permanent unemployment.

U.S. Reportedly Pressures South Korea to Increase Investment Commitment by Nearly $200 Billion, Preferring Cash Over Loans. Media reports indicate that U.S. Secretary of Commerce Gina Raimondo suggested to South Korea to add commitments to the $350 billion investment agreement reached in July, bringing the investment scale closer to the $550 billion agreement with Japan. Previously, South Korean media reported that due to differences in specific plans for South Korean investments in the U.S., trade negotiations between South Korea and the U.S. have entered a tug-of-war. Raimondo stated this month that South Koreans have no choice but to accept the agreement or pay tariffs.

Cryptocurrency Continues to Plummet, Ethereum Falls Below $3,900, Bulls Suffer Massive Liquidation! The cryptocurrency market has suffered a heavy blow, with Ethereum plummeting over 7% to $3,823, hitting a seven-week low; Bitcoin fell below the critical support of $110,000, down 3.62%; Solana dropped 7.2%, marking six consecutive days of decline. Nearly 250,000 people globally faced liquidation, with losses exceeding $1.1 billion, and $1.7 billion in long positions were forcibly liquidated. Institutional capital withdrawal has intensified selling pressure. Analysts warn that if Ethereum falls below $3,800, it will trigger larger-scale liquidations.

Xiaomi 17 "More Features, Same Price," Starting at 4,499 Yuan, with the 17 Pro starting at 4,999 Yuan, featuring the innovative "Smart Enjoy Back Screen". Is Xiaomi just an assembly factory with no technology? Lei Jun: Chips are the necessary path to success, requiring at least ten years and an investment of at least 50 billion.

• Xiaomi's 17 series globally launched the fifth-generation Snapdragon 8 Supreme version, using the third-generation 3nm process technology. Lei Jun discussed the iPhone 17 and Xiaomi 17, stating that the iPhone 17 is also very well made, and this update has been referred to as "toothpaste being squeezed out," but in terms of hardware configuration, there is still a gap compared to the Xiaomi 17. At the same time, Xiaomi has launched a car customization service, planning to design 100 car paints in three years.
• Lei Jun expressed that what exhausts him is the plethora of doubts, criticisms, and even attacks online. For example, some say that Xiaomi is just an assembly factory, lacking technology, only good at marketing, and will definitely not go far, etc.
• Lei Jun stated, "In my fifties, it's the age to take risks."
• Xiaomi cars will enter Europe in 2027. Xiaomi is steadily advancing its strategy to enter the European market in 2027. Group Vice President Xu Fei recently confirmed that the company started field research in June this year to prepare for establishing a sales network. Xiaomi plans to first immerse European consumers in its electric vehicles and smart ecosystem by opening showrooms. Although local production is not the first step, establishing factories in Europe is an inevitable plan to achieve its long-term goal of being among the top five globally.

BYD's August sales in Europe surged 200% year-on-year, surpassing Tesla for two consecutive months! BYD's sales in the EU in August increased by 201.3% year-on-year, surpassing Tesla for the second consecutive month, with its market share expanding to 1.3%. Tesla's sales during the same period fell sharply by 36.6%, with its share dropping from 2.0% last year to 1.2%. To support capacity expansion, BYD plans to establish a battery factory in Europe, which is a key step in deepening the localized supply chain following its vehicle plants in Hungary and Turkey.

The strongest Web2 and Web3 merger in South Korea, "Korean Google" will acquire "Korean Binance," planning to launch a Korean won stablecoin and expand globally. This merger will combine the strongest Web2 and Web3 forces in South Korea, laying the foundation for its stablecoin project and global expansion of digital financial services. Naver Finance will launch a Korean won-backed stablecoin project. If Naver Pay integrates the blockchain wallet "Giwallet" developed by Upbit, it is expected to integrate all financial assets such as stablecoins, tokenized deposits, and tokenized stocks in the future.

Domestic Macro

Li Qiang meets with American friendly groups. According to Xinhua News Agency, Li Qiang emphasized that the foundation of China-U.S. relations lies in the people, and their healthy development requires joint efforts from both sides. He hopes that people from all walks of life in the U.S. will take more positive actions to enhance mutual understanding between the two countries, expand practical cooperation in various fields, and make greater contributions to promoting the development of both countries and enhancing friendship Ministry of Commerce: Announced an investigation into trade and investment barriers related to restrictions on China by Mexico. The measures under investigation are related to the Mexican government's plan to increase import tariff rates on products from non-free trade partners such as China, specifically involving categories such as automobiles and parts, textiles, clothing, plastics, steel, home appliances, aluminum, toys, furniture, footwear, leather goods, paper and cardboard, motorcycles, and glass. Additionally, other trade and investment restrictions involving China that Mexico has implemented in recent years are also within the scope of this investigation.

"One Year Since '924': David Tepper, who shouted 'Buy all Chinese assets,' was right. In the year since '924', the total market value of the A-share market has surpassed 100 trillion yuan for the first time, with over 3,000 stocks rising more than 50%. Goldman Sachs believes that the momentum in the Chinese stock market is very strong, and there is still significant room for market capital allocation, with technical indicators suggesting that the rebound may have just begun. The foundation for a "slow bull" market in A-shares is more solid than ever.

Hang Seng Tech Index Approaches "Longest Winning Streak in History". The Hang Seng Tech Index is expected to set a record for the longest winning streak since its inception, as investors' continued enthusiasm for the AI sector drove tech stocks to rise on Thursday, marking the eighth consecutive week of gains for the index. The government announced increased support for the tech industry, injecting new momentum into the market. Alibaba announced increased AI investments and established a new partnership with NVIDIA, further boosting investor confidence.

How to Understand the Current Revaluation of the Chinese Stock Market. The team led by Guo Lei at GF Securities believes that global assets are being repriced around three main lines: the weakening of dollar credit, supply chain backups, and a new technological revolution; domestically, this is driven by the release of engineer dividends, the endogenous appreciation of the yuan, and ample liquidity. The rise of high-growth narratives is a result of risk clearing, declining capital costs, and the resonance of industrial transformation.

Domestic Companies

How much additional capital expenditure will Alibaba have? Morgan Stanley predicts "3GW increase annually," UBS predicts "1-2GW," with each 1GW approximately equal to 100 billion yuan in capital investment. According to Morgan Stanley's estimates, from 2026 to 2032, Alibaba Cloud's annual added capacity will exceed 3 gigawatts, which is comparable to Morgan Stanley's forecast of 3-4 gigawatts of new capacity for the entire Chinese market in 2025. UBS believes that Alibaba Cloud's investment intensity and sustainability guidance "exceeds market expectations," estimating that Alibaba Cloud may expand its data center capacity at a rate of 1-2 gigawatts per year in the future, which could translate to an incremental capital investment of up to 100 billion to 200 billion yuan annually “Keling 2.5 Turbo” high performance, low cost! Goldman Sachs: Kuaishou is at the global top level of AI video. Goldman Sachs stated that Kuaishou's released “Keling AI 2.5 Turbo” model achieves nearly 30% cost reduction while maintaining top performance, establishing a leading position in the global AI video generation field. The model performed excellently in comparative tests with major competitors, with a user preference rate as high as 69%. It is expected that Keling AI's annual revenue will reach $154 million in fiscal year 2025, higher than the official guidance of $125 million.

Ningde Times' market value surpasses Kweichow Moutai, becoming China's third-largest listed company! Ningde Times' stock price hit a historic high on Thursday, with a market value reaching 1.83 trillion yuan, surpassing Kweichow Moutai's valuation of 1.8 trillion yuan. Some analysts believe that the battery outlook is promising, and some investors may be rotating from electric vehicle stocks to battery stocks, benefiting industry leader Ningde Times.

Overseas Macro

Citadel macro expert: The only conclusion for the market when the Federal Reserve cuts rates in such a liquid environment is to “increase risk appetite”. Nohshad Shah believes that against the backdrop of a robust macroeconomic fundamental, the intensified monetary policy easing is creating a strong tailwind environment for risk assets. As the market's outlook on future growth prospects becomes more optimistic, cyclical stocks should continue to rise relative to defensive stocks, particularly interest rate-sensitive sectors such as small-cap stocks and unprofitable tech stocks will also be supported.

Swiss National Bank rejects negative interest rates, pauses rate cuts for the first time since early 2024. Due to low inflationary pressures, the Swiss National Bank has taken a wait-and-see attitude, with economists expecting the rate-cutting cycle to end. It is worth mentioning that the Swiss franc has strengthened significantly this year, rising to a ten-year high against the US dollar last week.

How does Milei “save himself”? Wall Street: The Argentine peso needs to “devalue by 20%, if he dares”. The Argentine Milei government is facing a peso crisis, and Wall Street generally believes that the peso is severely overvalued and needs to devalue by 20% or more to escape economic difficulties and meet IMF requirements. However, a significant devaluation before key elections is undoubtedly a political gamble. A strong peso, while effectively curbing inflation, is increasingly dragging down the economy, leading Argentinians to shop overseas and import beef.

• $7 billion target “quickly achieved,” Argentina restores grain export tax. Official information shows that it took only two days for export declarations to reach the $7 billion cap, leading to the early end of the tax exemption policy for agricultural product exports The world's second-largest copper mine "major accident" halts production, Wall Street: Black Swan! "Traders buy first, then ask questions". Freeport-McMoRan announced that its Grasberg copper mine in Indonesia has encountered force majeure, leading to the halt of production at this second-largest copper mine in the world. Goldman Sachs analysts have classified this event as a "black swan," predicting a loss of 500,000 tons of copper supply over the next 12-15 months, and asserting that "copper prices must rise as a result." Traders' reaction to this is to "buy first, then ask questions."

Overseas Companies

"Perpetual contracts" are booming in the crypto circle, overnight wealth or one-click restart! The core feature of perpetual contracts is that there is no expiration date or strike price, allowing traders to hold positions indefinitely, similar to an option contract that can automatically roll over. This speculative tool is rapidly entering the regulated U.S. market. The mainstream cryptocurrency exchange Coinbase has launched perpetual contract products for its U.S. retail customers this summer. Meanwhile, the Chicago Board Options Exchange Global Markets also plans to introduce such contracts in November.

"Hoarding coins" model on the brink of collapse? "Digital currency treasury companies" are buying back to try to boost stock prices. Analysts believe that such buybacks indicate that the business model of "digital currency treasury companies" may have reached its end, and these buybacks are a "sign of market saturation."

Circle: Exploring "reversible" transactions for stablecoins, learning from traditional financial systems. Circle, the world's second-largest stablecoin issuer, is exploring the introduction of a "reversible" mechanism that can refund in cases of fraud or disputes, aiming to attract banks and institutional clients with higher security and compliance requirements by providing risk control and error correction functions similar to traditional finance. Circle also plans to implement "reverse payments" at the protocol level through its new blockchain Arc, to balance the finality of transactions with the need for error correction.

Amazon reaches settlement with FTC, agrees to pay $2.5 billion to resolve allegations of misleading users into subscribing to Prime. Amazon will pay a $1 billion fine and refund a total of $1.5 billion to approximately 35 million users, with individual refunds amounting to $51.

Trump administration agrees to use AI models from Musk's xAI. The Trump administration will provide federal agencies with AI models from Musk's xAI through a new partnership, which may boost Musk's AI company and show that his relationship with the White House is warming. Under the agreement, federal agencies will be able to access models, including Grok 4 and a new fast version called Grok 4 Fast, for a symbolic fee of 42 cents Meta launches Vibes platform, entering the AI video market. Meta announced the integration of the AI video creation platform Vibes into the Meta AI application, allowing users to create, discover, and share short video content. This feature is presented in a feed format, where users can browse AI videos generated by other creators and communities, as well as use new AI visual tools to bring their ideas to life or recreate existing videos.

Etching coolant "into chips"! What does Microsoft's new technology mean? Microsoft has unveiled a new cooling technology that etches tiny channels inside chips to allow coolant to directly carry away heat. Laboratory tests show that its cooling efficiency can be up to three times that of traditional cold plates. However, Morgan Stanley believes that this technology still faces challenges in "reliability," "design integration," and "serviceability," and its widespread adoption will take time. Therefore, the short-term impact on traditional cooling solution providers is minimal.

SAP faces EU antitrust investigation over software support services. The European Commission has launched an antitrust investigation into German software giant SAP, suspecting it of restricting competition in the market for maintenance and support services for enterprise resource planning software, thereby harming customer choice and driving up costs. The EU is concerned that SAP may exploit customers through unfair trade conditions. If the investigation proves true, SAP could face hefty fines. SAP's stock price fell over 2.3%.

In just a few minutes, AI easily passed the CFA Level III exam. Recent research shows that several AI models can pass the prestigious CFA Level III exam in just a few minutes, while humans typically require years of study. Among them, Gemini 2.5 Pro performed the best overall, while the domestic KIMI K2 achieved a 78.3% accuracy rate on multiple-choice questions. Despite AI's excellent exam performance, experts believe it still struggles to fully replace human financial professionals in areas such as contextual understanding.

Today's News Preview

U.S. August personal income, consumer spending, and core PCE price index.

U.S. September University of Michigan consumer sentiment and inflation expectations.

Japan's September Tokyo CPI.

Federal Reserve Governor Bowman and Richmond Fed President Barkin to speak.

Alibaba 2025 Yunqi Conference.

Moore Threads to hold a meeting on the Sci-Tech Innovation Board.

Li Auto i6 launch