Core Viewpoint - The article discusses the recent decline in the A-share market, attributing it to high valuations in certain sectors, profit-taking by investors, and external uncertainties such as trade policies and global market sentiment [1][3]. Market Adjustment Factors - The market adjustment is primarily driven by heightened trade tensions, leading to decreased risk appetite among investors. This has resulted in profit-taking from previously high-performing sectors, particularly technology [2][3]. - External factors, including the recent crisis in U.S. regional banks and uncertainties surrounding tariffs, have contributed to increased market volatility [3]. Short-term Market Outlook - Despite the current market pressures, fund companies believe that the downside potential is limited. The ongoing U.S.-China trade negotiations are expected to stabilize after a period of volatility [4][5]. - The market is currently in a risk release phase, but this is anticipated to be short-lived, with a focus on upcoming trade negotiation milestones in November [5][6]. Investment Strategy - Fund managers suggest that the market correction presents an opportunity for balanced portfolio allocation. They recommend focusing on sectors that may benefit from policy support and improving earnings expectations [7][8]. - Specific sectors highlighted for investment include AI, semiconductor self-sufficiency, solid-state batteries, and commercial aerospace, which are expected to show resilience during market adjustments [8][9]. Defensive Investment Considerations - Following two months of market adjustments, sectors like banking are regaining their dividend yield appeal, making dividend stocks a defensive option during periods of market volatility [9]. - The technology sector remains a focal point, although caution is advised due to the liquidity-driven nature of the recent market rally [9].

Group 1: Tariff Changes - China's tariff on U.S. imports decreased from 125% to 10%, while the U.S. tariff on Chinese imports dropped from 145% to 30%[1] - The previous market expectations for tariff rates were between 45% and 54%, indicating a significant reduction beyond expectations[1] - The weighted average tariff rate for U.S. imports from China in 2024 is approximately 10%, slightly lower than the 12% calculated based on 2017 import values[2] Group 2: Trade Impact - U.S. imports from China increased by 8.9% during the three weeks following the tariff imposition, averaging $1.24 billion per day[4] - The reduction in tariffs is expected to restore trade to a relatively normal state, although the current 30% tariff is still higher than last year's 12%[3] - High-tech products, previously subject to a 25% tariff, now face a combined tariff of 55%, which may limit the decline in exports to the U.S.[5] Group 3: Market Reactions - The capital market may experience a boost in risk appetite, with short-term stock market performance expected to strengthen[7] - International gold prices have retreated over 3%, nearing the low point of $3,202 per ounce observed on May 1[8] - U.S. Treasury yields for 10-year and 30-year bonds rose by 5-6 basis points following the tariff reductions, with yields reaching 1.68% and 1.94% respectively[8]