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US futures waver as trade optimism fades, with the Dow up 0.1% while the S&P and Nasdaq remain flat. Tesla fell 2.25% after a 45% rally, as competition from Xiaomi’s EV launch looms, with key support at $289. Xiaomi began mass production of its Xring O1 chip, signaling a $1.87 billion push toward semiconductor independence. CATL surged 14% in its Hong Kong debut, buoyed by its dominant EV battery share and plans for $7.6 billion in overseas expansion. Meanwhile, Australia’s RBA cut rates to 3.85% citing global trade risks, as the Australian dollar slid 0.4%.

Futures Waver Amid Lingering Trade and Tariff Concerns

US stock futures showed mixed performance as optimism over last week’s temporary trade agreement between the US and China faced renewed scrutiny. Dow futures edged up 0.1%, while S&P 500 and Nasdaq futures traded flat, reflecting investor hesitation. Despite last week’s rally following the rollback of some tariffs, concerns are mounting that relief could be short-lived. Elevated tariff levels and cautious Federal Reserve commentary on rate cuts are tempering sentiment. Retail earnings remain in focus, with Walmart flagging higher prices and Home Depot set to provide further insight into consumer resilience.

Investment Insight: While recent trade optimism has buoyed markets, investors should remain cautious as elevated tariffs and restrained monetary policy loom. Focus on sectors resilient to price pressures, such as consumer staples, and watch upcoming earnings for signals of broader economic strain. Diversification remains critical amid heightened global uncertainties.

Tesla Retreats After Four-Week Rally: Key Levels to Watch

Tesla shares fell 2.25% on Monday, ending a four-week, 45% rally that was driven by easing trade tensions and CEO Elon Musk’s hands-on management approach. The pullback coincided with Xiaomi’s announcement of its YU7 electric SUV launch, potentially intensifying competition in the mid-size EV market. Technical indicators suggest the stock remains in an uptrend, though consolidation near $342 signals investor caution. Key support levels to monitor include $289 and $271, while resistance at $430 and $489 could test the stock’s ability to resume its upward momentum.

Investment Insight: Tesla’s recent rally underscores strong investor sentiment, but the pullback highlights the importance of monitoring competitive pressures and technical signals. For investors, $289 and $271 may present attractive entry points, while resistance levels near $430 and $489 could serve as profit-taking zones. Consider balancing exposure to Tesla with broader EV and technology plays to hedge against sector-specific risks.

Market price: Tesla Inc (TSLA): USD 342.09

Australia’s RBA Cuts Rates to 3.85% Amid Global Uncertainty

The Reserve Bank of Australia (RBA) lowered its cash rate by 25 basis points to 3.85%, marking a two-year low, as the board cited a dimming global economic outlook and easing inflationary pressures. The Australian dollar slipped 0.4% to $0.6429 following the announcement, while bond futures rose. Inflation has returned to the RBA’s target band of 2-3%, with core inflation at 2.9%, while the unemployment rate remains steady at 4.1%. However, global trade tensions, including U.S. tariffs and their impact on China, Australia’s top export market, weigh heavily on the domestic economy. Despite the cut, the RBA signaled caution regarding further easing.

Investment Insight: The RBA’s rate cut reflects growing pressures on Australia’s economy from global trade disruptions and softer domestic spending. Investors should anticipate continued volatility in the Australian dollar and commodity markets, particularly iron ore. Fixed-income assets may benefit from further rate cuts, while equity investors may focus on sectors resilient to global headwinds, such as healthcare and domestic consumer staples.

Xiaomi Begins Mass Production of Xring O1 Chip

Xiaomi has officially started mass production of its self-developed Xring O1 chip, marking a significant milestone in its push toward semiconductor independence. Founder Lei Jun announced that the chip will debut in the Xiaomi 15S Pro smartphone and Xiaomi Pad 7 Ultra, with a product launch scheduled for Thursday. The company has already invested 13.5 billion yuan ($1.87 billion) in the chip’s development and plans to allocate at least 50 billion yuan over the next decade to bolster its chip design capabilities, signaling a long-term commitment to innovation in hardware technology.

Investment Insight: Xiaomi’s foray into chip production positions it as a stronger competitor in the high-margin semiconductor space while reducing reliance on third-party suppliers. Investors should monitor the performance of Xring O1-powered devices and the company’s ability to scale chip production efficiently. With the potential for margin expansion and greater control over its supply chain, Xiaomi’s strategy could unlock significant shareholder value in the long term.

Market price: Xiaomi Corp (HKG: 1810): HKD 54.40