Chinese Stocks Surge: Nasdaq Golden Dragon Index Rises 2.08%

Chinese stocks surged, with the Nasdaq Golden Dragon China Index rising 2.08%. Alibaba, Pinduoduo, NetEase, JD.com, Tencent Music, Trip.com, Baidu, Li Auto, Futu Holdings, KE Holdings, and Bilibili saw significant gains, while Taiwan Semiconductor Manufacturing Company, Chunghwa Telecom, ASE Technology Holding, Full Truck Alliance, China New Town Development, and UP Fintech Holding experienced declines. US stocks continued their upward momentum, with the Dow Jones Industrial Average rising over 400 points and the S&P 500 Index setting a new closing record for the second consecutive day.

Chinese stocks surged on Wednesday, with the Nasdaq Golden Dragon China Index rising by 2.08%. The gains were driven by an extension of the U.S.-China trade truce, which averted a tariff escalation and boosted investor confidence. Key tech and EV stocks, including Alibaba Group (NYSE:BABA), Pinduoduo (NASDAQ:PDD), NetEase (NASDAQ:NTES), JD.com (NASDAQ:JD), Tencent Music (NYSE:TME), Trip.com (NASDAQ:TCOM), Baidu (NASDAQ:BIDU), Li Auto (NASDAQ:LI), Futu Holdings (NYSE:FUTU), KE Holdings (NASDAQ:KEH), and Bilibili (NASDAQ:BILI), all saw significant gains. Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC), Chunghwa Telecom (TPE:2498), ASE Technology Holding (TPE:3007), Full Truck Alliance (NYSE:FTA), China New Town Development (HKEX:9999), and UP Fintech Holding (HKEX:6899) experienced declines.

The U.S. and China extended their trade truce by 90 days, which came as a relief to investors. President Donald Trump signed an executive order maintaining the pause until November 10, while Beijing announced a matching extension. Under the current arrangement, Washington will keep its 30% levy on Chinese imports in place, and China will continue its 10% tariff on U.S. goods [1].

The truce marks a temporary halt in a trade dispute that had seen both sides threaten duties exceeding 100%. The additional three months will provide time to address trade imbalances and unfair practices, with a U.S. trade deficit with China nearing $300 billion in 2024. Negotiators will also focus on expanding U.S. export access, addressing national security issues, and reviewing technology restrictions [1].

Despite the truce, U.S.-China trade volumes remain depressed. In the first half of 2025, U.S. imports from China fell 15% year-over-year to $165 billion, while American exports to China dropped 20% [1].

Chinese stocks have rallied in recent months, driven by abundant domestic liquidity and record household savings flowing into equities amid falling interest rates. The CSI 300 Index has climbed 16% from April lows as Beijing’s measures to curb price wars and overcapacity lifted sentiment, even without central stimulus or a U.S. trade deal [1].

In addition to the trade truce, Chinese tech giants like Tencent and ByteDance have been summoned over their purchases of Nvidia’s H20 chips. Chinese officials have expressed concerns about information risks and the potential for sensitive data to be included in documents Nvidia requires companies to submit for U.S. government review [2]. However, Nvidia stated that the H20 chip is not used for military purposes or government infrastructure and that China has a sufficient supply of domestic chips to meet its needs [2].

The gains in Chinese stocks reflect a combination of factors, including the trade truce, improving trade ties with Washington, government development plans, and continued retail inflows. Despite the recent partial easing of U.S. export restrictions, the concerns raised by Chinese officials could threaten Nvidia’s recently regained access to the Chinese market [2].

US stocks also continued their upward momentum, with the Dow Jones Industrial Average rising over 400 points and the S&P 500 Index setting a new closing record for the second consecutive day.

References:
[1] https://www.inkl.com/news/alibaba-nio-lead-gains-as-us-and-china-extend-trade-truce
[2] https://harici.com.tr/en/china-warns-tech-giants-like-tencent-and-bytedance-over-nvidia-h20-chip-purchases/