Global AI Trade Rebounds as China Tech Stocks Rally ~6% in a Single Week
N.R. Finch
The STAR 50 index bounced roughly 6% this week, tracking the S&P 500 and Dow to fresh all-time highs — but the rally sits on top of a 26% drop in July, the index's worst month ever, and midyear earnings will decide whether it holds.
What is this rally bouncing off?
The STAR 50 index fell 26% in July — its largest single-month decline on record.
Earlier this year the index had surged over 60%, fuelled by leveraged bets piling into AI exposure.
This means → the ~6% weekly rebound is a climb out of a leverage-driven crater, not the start of a new leg up.
Why does the U.S. rally matter for Chinese tech?
The S&P 500 and the Dow both hit all-time highs this week, driven by strong AI-linked corporate earnings.
Cooling Fed rate-hike expectations and easing Middle East tensions pushed oil prices lower, lifting AI-sector sentiment.
This means → Chinese and U.S. tech stocks have been moving in close correlation recently, so Wall Street's mood fed straight through to A-share tech names.
What did Beijing's "national team" do?
As the sell-off deepened, the China Securities Regulatory Commission pledged market-stabilisation measures.
State-backed funds injected at least CNY 60 billion (roughly USD 8.9 billion) directly into the market.
In plain terms = the government put real money on the table to set a floor — but a floor is not a reversal.
Can the rebound last — and what is the test?
Bohai Securities analyst Song Yiwei said: "China's equity market is entering a confidence-rebuilding phase now that the worst overheating risk has been cleared."
He expects the market may have bottomed, with the midyear earnings season potentially providing a fundamental anchor for capital reallocation.
This means → whether midyear results validate the real demand story behind AI will be the make-or-break checkpoint for this rally — data, not sentiment, will have the last word.
Content is for reference only, not financial advice.