The fluctuations in market sentiment and shifts in investment trends are often profoundly influenced by international relations. Recently, the issue of tariffs between China and the US, a major topic affecting global markets, is gradually losing its impact. Initially, the market was full of doubts about the outbreak of a reciprocal tariff war, causing stock prices to plummet, with the US stock market experiencing a drop of over 15%, and the Chinese market also under pressure.

However, over time, the market's sensitivity to such news has gradually decreased. As the event becomes prolonged, its impact is greatly weakened. Currently, the negotiations between China and the US on tariff issues are expected to reach a balance, with tariffs likely stabilizing around 50%. This reflects the willingness of both sides to compromise and shows their flexibility in controlling key products. The stage of the most intense conflict is now a thing of the past.

Other regional conflicts around the world, such as tensions in the Middle East, have not had as long-term an impact on the stock market as the tariff war.

Positive signals from international markets also bring confidence to Chinese investors. The US stock market continues to rise steadily, repeatedly hitting new historical highs. This reflects the global market's recognition of the resilience of the US economy, the trend of interest rate cuts, and the global influence of core technology companies. Historical data shows that over the past decade, those who embraced the US capital market have mostly benefited. The vigorous development of the US tech bull market is expected to have a positive reflection on China's tech sector, spawning a new wave of investment. The major theme of Chinese technology is worth continuous attention in the second half of the year.

Policy Tailwinds and Structural Advantages

The fundamentals of the Chinese economy are showing multiple positive signals, providing support for the capital market.

First, liquidity levels are abundant. Last month, the central rate of China's social capital interest rate fell to a historic low, with liquidity exceptionally loose. This provides a favorable monetary environment for investment, reduces corporate financing costs, and injects ample funds into the stock market.

Secondly, the management is actively guiding the healthy development of the capital market. Recognizing the benefits of consumption and stock market prosperity to the overall economy, relevant departments are taking measures. The China Financial Management Bureau has required insurance companies to increase their stock exposure. This force has prompted insurance funds to actively buy high-dividend stocks represented by banks, and the upward trend in bank stock prices is closely related to this policy guidance.

Furthermore, larger-scale economic stimulus policies are expected in the second half of the year. Subsidies in the first half may have been exhausted, and there is a high possibility of new economic stimulus policies being introduced around September. The introduction of such policies will further boost market confidence, provide substantial support to the real economy, and then transmit to the capital market.

Domestic easing policies, combined with the positive trend in overseas technology markets, together create a favorable environment for China's capital market.

Focus on Growth, Select Quality

Building an effective investment system and strategy is key to navigating market fluctuations and achieving wealth growth. Successful stock investment does not rely solely on intuition or a single indicator. It requires the assistance of technical analysis and solid fundamental research. In the current complex market environment, accurate understanding of macroeconomic and policy interpretations, as well as in-depth industry analysis, is the foundation for making wise investment judgments.

In the face of a volatile market, investment directions can be divided into four categories: technology, dividend, large consumption, and cyclical. Each of these asset classes has its own characteristics, and investors can allocate assets based on their own risk preferences and goals.

Technology:
From the perspective of long-term sustainable growth, the technology sector has significant advantages. The current market's focus on technology remains high, with the consumer electronics sector particularly worth attention.

• Semiconductors and memory chips: China's memory chip industry is experiencing significant development. Hefei Changxin, as China's second-largest memory manufacturer, has initiated listing counseling, and its future listing on the A-share market will bring new investment opportunities. Wuhan Yangtze Memory is also a giant in China's memory chip industry. The development of these companies highlights China's rise in the semiconductor field.
• Broad prospects for consumer electronics: The definition of consumer electronics is broad, including AI glasses, AI headphones, wearable devices, small humanoid robots, smart pets, mobile phones, tablets, smart home furnishings, etc. These products are closely connected to people's daily lives, and with the integration and innovation of AI technology, the consumer electronics field will continue to burst with vitality. It reflects the deep combination of technological innovation and market demand and is an important force driving technological growth.
• Fintech: Financial IT service providers represented by Hundsun Technologies are important partners of China's banking industry, public fund industry, securities companies, trusts, and other financial institutions. In the future, with the evolution of the financial landscape, such as the rise of stablecoins and the transformation of the interaction model between traditional fiat currencies and digital currencies, these financial IT companies will usher in huge development space.
• Haiguang Ecosystem: China is forming two major ecosystems in the computing power field, one is Huawei's Ascend ecosystem, and Haiguang is building its own ecosystem as another core. Haiguang is expected to become the "national team" in China's computing power field, with development prospects comparable to Nvidia in the US. This ecosystem can provide a one-stop solution from servers, chips to operation and maintenance, management, demonstrating strong market competitiveness.
• Comparison of technology companies and traditional industries: Technology companies, such as Huawei, despite their large sales revenue, need to continuously invest heavily in R&D and capital expenditures. This model puts technology companies under continuous pressure for innovation and competition, and profits often require substantial reinvestment to maintain industry leadership. In contrast, traditional consumer goods companies like Moutai have low capital expenditure needs, stable profit distribution, and are not troubled by the rapid iteration of product life cycles. The rapid updates and significant random pressure in the technology industry make it difficult to create a "Moutai-style" stable return model, and investors need to pay attention to the continuous innovation capability and market position of technology companies when choosing them.

Dividend:
This category usually includes banks, power grids, utilities, etc. These industries have stable dividends and low volatility. Financial management departments actively guide insurance funds to increase allocation, enhancing their attention. However, some investors believe that such investments lack flexibility and imagination space.

Large consumption:
Covers multiple sub-sectors such as clothing, food, housing, transportation, home appliances, automobiles, tourism, etc. The current large consumption industry faces certain challenges, such as Moutai, although its valuation is not high, but due to the sluggish real estate market and changes in the consumption habits of young people, market enthusiasm is relatively low. The recovery of the consumption sector will take time.

Cyclical:
Includes steel, non-ferrous metals, cement, building materials, etc. Cyclical industries may be active in the short term, such as the recent rise in steel. Some core industries against involution, such as photovoltaics, lithium battery equipment, and new energy vehicles, also belong to this category. Although the photovoltaic industry has policy guidance, there is serious overcapacity, and investors need to be wary of short-term speculation risks, as its fundamentals have not changed substantially.

When choosing specific companies, Jingwang Electronics in the PCB industry, $WUS(002463.SZ)沪电股份， Shenzhen Southern Circuit, etc., are all excellent representatives. In the solid-state battery field, companies like Dangsheng Technology are worth attention. For memory chip companies, such as $GIGADEVICE(603986.SH)兆易创新， Baiwei Storage, $Ingenic(300223.SZ)北京君正， etc., also have a place in the market.

Market Confidence and Future Outlook: Embracing a Year of Harvest

From the second half of 2025 to 2026, China's capital market is expected to enter a further upward phase. The current Shanghai Composite Index has reached a new high for the year, and market confidence is gradually accumulating. The possibility of the Shanghai Composite Index challenging 4000 points is quite high. This reflects the market's positive expectations for China's economic resilience and policy support.

In the face of market changes, it is crucial for investors to maintain confidence. Short-term market fluctuations, such as daily ups and downs, are difficult to predict. Investors should not focus too much on short-term technical indicators or speculate on daily ups and downs, but rather focus on long-term directions and grasp macro trends, which is the key to success.