Breakfast | NVIDIA rises nearly 3%, leading tech stocks, and once again returns to the throne of the world's largest company by market value

Market Overview The positive employment data in the United States temporarily offsets investors' concerns about economic growth, leading to further gains in the U.S. stock market, with the Dow Jones rising for four consecutive days. Chip stocks outperformed the market for two days in a row, with NVIDIA rising nearly 3%, leading the Dow, and NVIDIA's market value returning to first place for the first time in over four months. Nuclear power stock Constellation rose over 9% at the start but then turned negative; Wells Fargo briefly rose 10% after hours; the China concept index has risen for two consecutive days. After the announcement of U.S. job vacancies, U.S. Treasury yields turned higher, reaching a daily high; the U.S. dollar index accelerated its rebound, not continuing to approach a three-year low; gold further declined, while crude oil accelerated its increase, with gold dropping over 1% during the session and crude oil rising 2% to a two-week high. During the Asian session, A-shares collectively closed higher, with the innovative drug sector active. The Hang Seng Index and the Hang Seng Tech Index both rose over 1%, while Lao Pu Gold surged over 6% to a new high, with commodities and government bonds mostly declining. Key News The White House stated that U.S. and Chinese leaders will hold talks this week, to which the Chinese Ministry of Foreign Affairs responded: no information can be provided; the U.S. side claimed that the Chinese side violated the consensus of the Geneva talks, and the Ministry of Foreign Affairs reiterated: pressure and coercion are not the correct way to deal with China; Wang Yi met with the new U.S. ambassador to China, Nicholas Burns. The European Union plans to restrict Chinese companies from participating in public procurement of medical devices, with the Chinese Ministry of Foreign Affairs and Ministry of Commerce stating: resolutely safeguarding the legitimate rights and interests of Chinese enterprises. Trump announced that tariffs on steel and aluminum will increase to 50% on June 4, with tariffs on imports of steel and aluminum from the UK remaining at 25%; the White House confirmed it wrote to "urge" trade negotiation partners to "submit proposals"; media previously reported that Trump issued a "final ultimatum," hoping countries would provide their "best trade proposals" by Wednesday. Musk harshly criticized Trump's spending plan: "disgusting," and the supporting lawmakers are "shameful." The OECD has lowered its global growth forecast for the second time this year, stating that the U.S. is one of the countries most severely affected by tariffs, cutting the U.S. economic growth forecast from 2.8% to 1.6%. The U.S. April JOLTS job vacancies unexpectedly increased instead of decreasing, with hiring and layoffs increasing, and voluntary resignations decreasing. The U.S. Bureau of Labor Statistics previewed the significant non-farm payroll report on Friday: it will correct many data points from the April employment report, which will not affect key indicators such as the unemployment rate. The Eurozone's May harmonized CPI preliminary year-on-year growth was 1.9%, the first time in eight months below the European Central Bank's 2% target, supporting further interest rate cuts by the ECB. Inflation is not a "one-time deal": Federal Reserve officials warned in unison, expressing concerns that tariffs could trigger persistent inflation or even stagflation. Lee Jae-myung was elected as the President of South Korea, delivering a speech of thanks, stating that he will engage in dialogue with North Korea after officially taking office. Japan's 10-year government bond auction saw strong demand, with the 30-year Japanese bond auction on Thursday becoming the next test; reports indicate that the Japanese government will call for more domestic investors to hold Japanese government bonds Xiaomi Investor Conference: The pricing of YU7 will be determined one or two days before the sale, the standard version will not be only 20,000 yuan higher than SU7, Lei Jun stated that anti-involution does not mean price wars, and the automotive business is expected to achieve profitability in the third or fourth quarter. Market Closing Report U.S. and European Stock Markets: The Dow Jones rose 0.51%, the S&P 500 index rose 0.58%, and the Nasdaq rose 0.81%. The European STOXX 600 index closed up 0.09%. A-shares: The Shanghai Composite Index rose 0.43%, the Shenzhen Component Index rose 0.16%, and the ChiNext Index rose 0.48%. Bond Market: By the end of the bond market, the yield on the U.S. ten-year benchmark Treasury bond was about 4.45%, and the yield on the two-year U.S. Treasury bond was about 3.95%, both up about 1 basis point during the day. Commodities: WTI July crude oil futures closed up 1.42%. Brent August crude oil futures closed up 1.55%. COMEX August gold futures closed down 0.59%. London tin rose 2.2%, London copper rose 0.2%, and London nickel fell 0.6%. News Details Global Highlights The White House states that U.S.-China leaders will hold talks this week, China's Ministry of Foreign Affairs responds. According to Global Times, at the regular press conference of the Ministry of Foreign Affairs on June 3, a reporter asked about the White House's statement that U.S.-China leaders would hold talks this week, and spokesperson Lin Jian responded that he had no information to provide. The U.S. claims that China violated the Geneva meeting consensus, and the Ministry of Foreign Affairs reiterates: Pressure and coercion are not the correct way to deal with China. According to People's Daily, spokesperson Lin Jian stated that the U.S. has made unfounded accusations against China, implemented extreme measures such as chip export controls against China, suspended the sale of chip design software to China, and announced the revocation of Chinese student visas, which seriously undermines the Geneva consensus and damages China's legitimate rights and interests. China firmly opposes this and has made solemn representations. Wang Yi meets with the new U.S. Ambassador to China, Nicholas Burns. Wang Yi emphasized that after the Geneva economic and trade talks, China has seriously and strictly implemented the consensus reached by both parties. However, it is regrettable that the U.S. has recently taken a series of negative measures based on unfounded reasons, harming China's legitimate rights and interests, which China firmly opposes. The U.S. should take reciprocal actions and effectively implement the important consensus reached during the phone call between the two heads of state in January this year, creating necessary conditions for U.S.-China relations to return to the right track The EU plans to restrict Chinese companies' participation in public procurement of medical devices. In response, Foreign Ministry spokesperson Lin Jian stated that China will resolutely safeguard the legitimate rights and interests of Chinese enterprises; the Ministry of Commerce spokesperson said that China firmly opposes this protectionist practice. China hopes the EU will correct its erroneous actions and will closely monitor the EU's subsequent actions, taking measures to firmly protect the legitimate rights and interests of Chinese enterprises. Trump announced that the steel and aluminum tariffs will increase to 50% on June 4, and the White House confirmed it sent a letter urging trade negotiation partners to "submit proposals". According to CCTV News, the White House stated that President Trump announced an increase in tariffs on imported steel, aluminum, and their derivatives from 25% to 50%, effective from 12:01 AM Eastern Time on June 4, 2025. The tariffs on steel and aluminum imported from the UK will remain at 25%. This media outlet reported that Trump issued an "ultimatum": hoping countries will provide their "best trade proposals" by Wednesday. With only five weeks left until the July 8 tariff reinstatement deadline, the Trump administration sent an urgent letter requesting countries to submit their best trade negotiation proposals by Wednesday. This move exposes Washington's anxiety under self-imposed deadline pressure and brings new uncertainty to the global market. Just left and already sabotaging? Musk harshly criticized Trump's spending bill: "Disgusting," and supporting lawmakers are "shameful". Musk posted that the bill would cause the already massive U.S. government budget deficit to surge to $2.5 trillion, burdening American citizens with unbearable debt, stating that "Congress is bankrupting America." Trump recently warned lawmakers that if they oppose the bill, the public will not forgive them. The focus of the Senate battle over Trump's "Big Beautiful" bill: the debt ceiling provision. As Trump's "Big Beautiful Bill" faces the Senate, the debt ceiling provision has become a focal point. Hardline senators have openly declared war, demanding the removal of the debt ceiling provision that "explodes the national debt." Trump angrily retaliated, stating that if they oppose the bill, the public will not forgive him! The OECD has downgraded its global growth forecast for the second time this year, stating that the U.S. is one of the countries most severely impacted by tariffs. The OECD has significantly lowered the global economic growth rate for 2025 from the previous 3.3% to 2.9%, and has halved the U.S. economic growth forecast from 2.8% to 1.6%, warning that the impact of weak economic activity will outweigh spending cuts and tariff revenues The U.S. budget deficit is expected to further expand. U.S. April JOLTS job openings unexpectedly increased to 7.391 million, with hiring and layoffs rising, and voluntary resignations decreasing. In April, U.S. JOLTS job openings reached 7.391 million, exceeding expectations of 7.1 million and up from a previous value of 7.192 million. The number of hires in April rose to the highest level in nearly a year. The number of layoffs in April climbed to the highest level since October of last year. The number of voluntary resignations decreased in April. U.S. Bureau of Labor Statistics to correct many data in April employment report on Friday. The U.S. Bureau of Labor Statistics announced on its official website that it will correct many data in the April employment report when releasing the May employment report on June 6 (this Friday). The Bureau noted that the corrections were due to slight errors in the weights introduced by the redesigned Current Population Survey sample and emphasized that this correction will not affect key indicators such as the unemployment rate. Eurozone May harmonized CPI year-on-year preliminary value at 1.9%, marking the first time in eight months below the ECB's 2% target, supporting further rate cuts by the ECB. Core inflation also cooled to 2.3%, with the service sector being the main factor in reducing overall inflation, as service prices slowed significantly from a 4.0% increase to 3.2%, the lowest growth rate since March 2022. Inflation is not a "one-off": Federal Reserve officials warn of concerns that tariffs could trigger persistent inflation or even stagflation. Although traditional economic models suggest that tariffs only cause a one-time inflation shock, several Federal Reserve officials expressed strong concerns on Tuesday, believing that Trump's fluctuating and overly delayed tariff policies could lead to more persistent and complex inflation pressures, causing lagging impacts on the economy and employment. Chicago Fed President Austan Goolsbee even stated that White House trade policies could lead to "stagflation" in the U.S. Lee Jae-myung elected as South Korean president, delivers a thank-you speech, stating he will engage in dialogue with North Korea after officially taking office. According to CCTV, on June 3 local time, multiple South Korean media reported that Lee Jae-myung has been confirmed as the new president of South Korea. In the early hours of June 4, Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, arrived at the assembly site in front of the National Assembly in Yeouido, Seoul, and delivered a speech thanking the South Korean people. Lee stated that he would stabilize the situation on the peninsula as soon as possible and seek dialogue with North Korea for a win-win outcome. Japan's 10-year government bond auction sees strong demand, with Thursday's 30-year bond auction being the next test In this 2.6 trillion yen 10-year Japanese government bond auction, the bid-to-cover ratio surged from last month's 2.54 to 3.66, far exceeding the average level of the past year. Investors are closely watching Thursday's 30-year auction, which will determine whether the market is ready to face the "normalization" pains following the Bank of Japan's exit from its ultra-loose monetary policy. Report: The Japanese government will call for more domestic investors to hold Japanese government bonds. The report states that the Japanese government is urging domestic investors to increase their holdings of government bonds to curb further spikes in yields. The government has also postponed the target date for achieving a primary budget surplus from this year to the fiscal years 2025 or 2026. Xiaomi Investor Conference: The pricing of YU7 will be determined one or two days before the sale, and the automotive business is expected to achieve profitability in the third or fourth quarter. Lei Jun stated that the price of YU7 cannot be the rumored 235,900 yuan, and the standard version will not just be 20,000 yuan higher than the SU7 standard version; anti-involution does not mean engaging in a price war, and automotive chips are under development and are expected to be launched soon. GPT-5 to launch in July? OpenAI internal leaks + Altman hints, revealing that the upcoming moment is "terrifying". Recently, the famous prophet and AIPRM chief engineer Tibor Blaho hinted in a conversation that OpenAI will release a major update in July, which many speculate could be GPT-5. OpenAI CEO Altman himself confirmed that o3 pro is also coming soon. AI drives demand surge, Meta signs a 20-year nuclear power deal with Constellation. Meta has signed a 20-year nuclear power procurement agreement, which will take over approximately 1.1 gigawatts of power generation from the Clinton nuclear power plant in Illinois starting in mid-2027. Meanwhile, Microsoft, Google, and Amazon are also actively positioning themselves in the nuclear power market. Constellation's CEO stated that the company is negotiating similar contracts with multiple clients, and agreements may be reached in the next 6 to 12 months. The Federal Reserve lifts asset size restrictions, Wells Fargo emerges from scandal shadow, surging 10% in after-hours trading. The Federal Reserve announced on Tuesday that Wells Fargo has met all the conditions required by the 2018 regulatory action, and therefore decided to lift the restrictions on its asset size. The Federal Reserve stated that it has completed its review of Wells Fargo's corrective measures, third-party assessment results, and its own review of the bank's corporate governance and risk management systems Stablecoins are on the rise, and the "first stablecoin stock" is set to IPO on Thursday. Circle's business model is simple and attractive: the company issues stablecoins pegged to the US dollar at a 1:1 ratio, then invests the US dollars deposited by users in short-term US Treasury bonds to earn risk-free returns. However, behind this seemingly "perfect" money-printing machine model, the company's profits are severely drained by stablecoin distributors like Coinbase; revenue is highly dependent on interest rate trends, and the company's performance is closely tied to the extremely volatile cryptocurrency market. Domestic Macro China's Caixin Manufacturing PMI fell to 48.3 in May, with new orders significantly contracting. In May, both supply and demand in the manufacturing sector declined, with external demand significantly dragging down performance, employment continued to contract, prices remained weak, logistics experienced delays, inventory remained basically stable, and entrepreneur sentiment slightly rebounded from a low level. Domestic Companies Taiwan Semiconductor Manufacturing Company CEO: Sales growth rate in 2025 will be in the mid-range of 20% in USD terms, profits will hit a record. C.C. Wei stated that there are uncertainties and risks related to tariff policies, but so far, "we have not seen any changes in customer behavior," and AI demand remains strong; enterprise AI is another source of structural trend support for AI demand in the coming years; TSMC expects the proportion of advanced process sales to continue to rise this year, reaching 70% to 80%. Nio's Q1 revenue grew 21.5% year-on-year but fell 38.9% quarter-on-quarter, with a vehicle gross margin of 10%, and Q2 delivery guidance expects a 71%-78% quarter-on-quarter increase. Nio reported a net loss of 6.75 billion yuan in Q1, a year-on-year increase of 30.2%, but a quarter-on-quarter decrease of 5.1%; new vehicle deliveries totaled 42,094 units, a year-on-year increase of over 40%, but a quarter-on-quarter decrease of 42.1%. Q2 revenue is expected to be between 19.5 billion and 20.1 billion yuan, a year-on-year increase of 11.8%-15.0%. Overseas Macro Trump's "Big Beautiful" plan hides a "capital tax landmine," Morgan Stanley: If the Senate does not clarify, the market will face shocks. Morgan Stanley believes that Clause 899 of the "Big Beautiful" plan effectively creates space for the US government to "transform the trade war into a capital war." If US Treasuries are included in the tax scope of Clause 899, the US Treasury yield curve is expected to steepen further, increasing the downside risk for the dollar. The market is currently hoping that the Senate will clarify the applicability of Clause 899 in the final legislation. “Asset tax” raises new concerns, dollar drops to “new record”. The dollar has fallen 8.4% in the first five months of this year, marking the worst "start of the year performance" ever against a basket of global currencies Some analysts point out that the issue of "potential game power" surrounding overseas holdings of U.S. assets may be weakening the motivation for global surplus funds to flow back into the U.S. market, and the accelerated search for alternatives to U.S. assets is putting further pressure on the dollar. Wall Street has learned the "TACO trade": shorting U.S. stocks after Trump erupts, then going long five days later. Nomura's research shows that since early February, every time Trump issues a trade threat, investors immediately short the S&P 500 futures and go long five days later, a strategy that has yielded a 12% return. In contrast, investors who simply held the benchmark index saw little substantial gains after experiencing a series of nerve-wracking fluctuations. Considering a 50% tariff on iron and aluminum, the "tariff-driven price increase" risk for copper, nickel, platinum, and other base and platinum group metals is underestimated. Trump plans to raise steel and aluminum tariffs to 50% starting June 4, and Citigroup believes this tariff hammer may extend to copper, platinum group metals, and other base metals in the future. Citigroup states that legal barriers may force the U.S. government to more actively use Section 232. Related research reports are being expedited, and tariffs may be implemented in the third quarter of 2025. Prices of base metals may drop by 10% in the third quarter of this year, with copper being particularly affected. Morgan Stanley comments on U.S. nuclear power planning: Make uranium great again. Morgan Stanley believes that the goal of achieving 400 gigawatts of nuclear power capacity in the U.S. by 2050 highlights the Trump administration's policy shift in support of nuclear power, reinforcing the long-term demand outlook for uranium and maintaining a positive view on uranium prices for 2025. Over 3,000 U.S. private credit transactions completed by a small rating agency team of about 20 people. The specter of the "subprime crisis" re-emerges. In a four-bedroom colonial house in the suburbs of Philadelphia, a rating agency named Egan-Jones operates over 3,000 private credit ratings with a team of just 20 people, leveraging nearly a trillion dollars in insurance funds. Compared to the months-long rating process required by large institutions like S&P and Moody's, Egan-Jones typically provides a preliminary assessment within 24 hours and a formal rating in less than five days, with the rationale being just a flimsy page. Despite OPEC+ continuing to increase production, oil prices surge due to the Russia-Ukraine conflict and Iran nuclear issues, "the most panicked time has passed, and short positions have reached their highest level this year". OPEC+ continues to increase production, but the extent is below expectations, with some member countries opposing the increase, indicating strict supply discipline. The escalation of the Russia-Ukraine conflict and the intensification of geopolitical tensions over the Iran nuclear issue reduce the likelihood of increased production from sanctioned oil-producing countries Analysts point out that the most serious concerns have dissipated, and short interest has reached its highest level of the year, creating conditions for price surges. Iranian Foreign Minister: Continuing uranium enrichment activities is Iran's red line. On June 3rd local time, Iranian Foreign Minister Amir-Abdollahian emphasized that continuing uranium enrichment activities is Iran's red line, a reality understood by all countries. Ukraine's "Trojan Horse" rewrites the "war model," Musk says "drones are the future battlefield dominators". The mode of drone warfare may signal a new turning point in the nature of war: future conflicts may increasingly manifest as covert, mobile, and hard-to-detect drone attacks. Sequoia Capital partner Shaun Maguire stated, "Drones worth less than $1 million have caused over $1 billion in damage. Critical infrastructure is no longer safe." Overseas Companies Luxury goods exit, military stocks rise: Rheinmetall will replace Kering in Euro Stoxx 50. JP Morgan stated that this adjustment will take effect on June 20th. Rheinmetall's stock price has surged nearly twofold this year, soaring 26% in May alone, pushing its market value to nearly €87 billion. Amid the ongoing Russia-Ukraine conflict and European countries reassessing defense budgets, military enterprises have become the most direct beneficiaries. In contrast, Kering Group has fallen 28% year-to-date. Today's News Preview U.S. and Eurozone May Services and Composite PMI Final Values. U.S. May ADP Employment Change. The Federal Reserve will release the Beige Book on economic conditions. Atlanta Fed President Bostic and Fed Governor Cook will speak. The Bank of Canada will announce its interest rate decision. U.S. EIA crude oil inventory change for last week.