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[Weekly Market Insights] US-Iran thaw prompts oil price pullback, AI focus returns

Guide to this week's strategies for the US and Hong Kong markets:

The US-Iran 14-point memorandum triggers oil price correction; how to refocus on the AI theme after easing geopolitical tensions?

China's exports grow by an unexpected 14.1%; how much upside potential is there for Hong Kong-listed tech stocks?

Live Broadcast Reservation: Tonight at 19:00, Futu's Chief Investment Research Expert will join you to review the market outlook for this week, explore multi-dimensional scenarios of the Middle East situation, and discuss the future path of the US-Iran relationship.

Market First Call Weekly Update | Multi-scenario analysis of the Middle East situation, what might happen next between the US and Iran?

[I. Macroeconomic Observations]

1.1 International Macroeconomic:

Better-than-expected nonfarm payrolls combined with the US-Iran memorandum: How will geopolitics and interest rates be repriced?

April nonfarm payrolls increased by 115,000, far exceeding the expected 65,000, mainly driven by contributions from healthcare, transportation and warehousing, and retail trade. The unemployment rate remained at 4.3%, in line with expectations, but the precise unemployment rate rose to 4.34%. Signs of marginal weakening in the labor market persist, with low wage growth. The data eased recession fears without boosting re-inflation risks. After the release, US stocks, bonds, and gold all rose while the dollar weakened. Combined with strong AI demand and robust Q1 earnings, the Nasdaq and S&P 500 hit new all-time highs.

On the US-Iran negotiations, the White House stated that both sides are nearing a 14-point memorandum of understanding,with key terms including Iran suspending uranium enrichment and accepting inspections, the US gradually lifting sanctions and unfreezing blocked funds, and both sides removing restrictions on passage through the Strait of Hormuz.The probability of a large-scale full war has decreased, and equity markets’ sensitivity to US-Iran conflict continues to decline, with oil prices falling rapidly.Market focus has shifted back to breakthroughs in the AI industry and corporate earnings. Following the non-farm payroll data release, the Fed implied no rate cuts this year.

Implied Fed rate cut probability Source: Fed Watch 2026-05-10

Crude oil prices Source: Trading Economics 2026-05-10

1.2 Domestic Macroeconomics:

April exports increased by 14.1% year-on-year, surpassing expectations, with AI-related products contributing nearly half of the growth

April exports grew by 14.1% year-on-year, showing strong performance, with cumulative export growth for the first four months reaching 14.5%. The impact of AI on exports was extremely significant: integrated circuit exports surged by 99.6% year-on-year, and automatic data processing equipment exports rose by 47.3% year-on-year. These two product categories accounted for 15.3% of April's exports, contributing nearly half of the monthly export growth. Auto exports also performed remarkably well, growing by 44.2% year-on-year and accounting for 4.5% of total exports, forming a characteristic pattern where auto exports drive wholesale activities.

On the import side, April imports grew by 25.3% year-on-year, reflecting the dual drivers of investment in the AI supply chain and changes in commodity prices. Integrated circuit imports surged by 54.7% year-on-year, while crude oil imports fell by 20% in volume but still increased by 13.2% in value year-on-year.The bulk import data showed strength, indicating ample resilience in China's trade fundamentals.

April export data by country Source: China Customs 2026-05-10

April import and export data (overall) Source: National Bureau of Statistics 2026-05-10

[Section Two: Market Views]

2.1 US Stock Market

S&P 500 rose 2.3%, Nasdaq surged 4.5% to a new high, how should one allocate structural positions along the AI theme?

$S&P 500 Index (.SPX.US)$Up 2.3% for the week,$NASDAQ 100 Index (.NDX.US)$Up 4.5%, capital flowed into semiconductor products and equipment, technology hardware and equipment, software and services, while flowing out of energy, pharmaceutical biotechnology, and life sciences. News regarding the US-Iran 14-point plan fermented, shifting market sentiment toward a 'fight-and-talk' baseline scenario pricing. Oil prices quickly retreated, leading to a recovery in equity assets.

The rise in US stocks occurred against the backdrop of higher-than-expected non-farm payrolls, delayed rate cut expectations, and unresolved geopolitical conflicts. This indicates that as long as economic conditions do not deteriorate significantly and AI capital expenditures remain strong, elevated interest rates do not necessarily collapse the stock market.The current profitability and capital structure still support the main line of technology growth, with a focus on the AI infrastructure chain and leading communication service technology companies, while accepting increased volatility and avoiding the most extremely crowded short-term overheated sectors.

Global capital allocation to US stocks has significantly recovered, with inflows into US equity funds reaching $111.5 billion over the past month. The forward 12-month P/E ratio of the S&P 500 is 21.8 (as of May 7), with valuations at a reasonably high level, while earnings and industry momentum remain core supports.

S&P 500 forward 12-month P/E ratio 21.8 (May 7) Source: Bloomberg, compiled by Futu Private Wealth

Focus Stocks -$Arm Holdings (ARM.US)$ : The world's leading chip IP licensor and key beneficiary of AI data center CPU architecture

ARM's Q4 FY26 and full-year performance shows strong revenue, EPS, and licensing business results, with cloud AI/data center-related demand becoming the most important incremental source. Annual revenue increased by 23% year-over-year, marking the third consecutive fiscal year of over 20% revenue growth post-IPO. Server CPU market share continues to rise, reaching 16% in shipments for Q4 2025, up 640 basis points year-over-year. Since its March launch, AGI CPU customer demand for FY27-28 has doubled from $1 billion to over $2 billion. If extended to areas like chiplets, DPUs, and XPUs, the per-customer value ceiling will continue to rise.

ARM's decades-long accumulated ecosystem barrier is profound - with cumulative chip shipments exceeding 350 billion units, a developer base surpassing 22 million, and nearly 99% share in smartphone main chips. In data centers, leading firms have adopted the ARM route, showing significant advantages in power consumption and throughput efficiency within unit power budgets.

The forward two-year P/E ratio is 70x, at a one-year historical +1 standard deviation level. The post-earnings report initial rise followed by a fall reflects market concerns about royalty income being below high expectations in the short term and constraints from advanced process capacity. However, it holds strong allocation value in the medium to long term, with any decline presenting a buying opportunity.

ARM valuation Forward two-year P/E ratio Source: Bloomberg, compiled by Futu Private Wealth Research

2.2 Hong Kong Stock Market

Hang Seng Index rises 2.4%, stronger for Hang Seng Tech. How to grasp elasticity in tiered allocation?

The Hang Seng Index rose 2.4% for the week, with an average daily turnover of HKD 239.2 billion, up around HKD 20 billion from last week, and a cumulative net outflow of HKD 200 million via Stock Connect. The Hang Seng Tech Index performed notably stronger, with primary inflows through Stock Connect.$CHINA MOBILE (00941.HK)$ 、$PetroChina (601857.SH)$ and$SMIC (00981.HK)$ The barbell strategy is the top choice for large southbound funds.

Hong Kong stocks are poised for a significant rebound: valuation at approximately the 29th percentile since 2015, tech oversold with southbound support at the bottom, policy warming in key cities optimized, geopolitical risks marginally blunted, and continuous AI catalysts.Strategically allocate assets by certainty and elasticity -- elastic layer focuses on semiconductors, computing power, and core internet leaders; hedging layer includes operators and bank dividend assets; event-driven layer captures trading opportunities from property policies.

Hang Seng Tech significantly outperforms Hang Seng Index as AI industry catalysts persist (intensive releases of domestic and international large models, Baidu AI Developer Conference, Google I/O Conference, etc.). Earnings expectations stabilize and rebound, with downward revisions having significantly weakened.Mainland property stocks have surged about 22% cumulatively since the early April low, with the dividend sector continuing to strengthen, becoming a low-volatility core holding option.

Hang Seng Index forward 12-month P/E ratio 11.85 (May 8) Source: Bloomberg, compiled by Futu Private Wealth

Focus Stocks-$JOHNSON ELEC H (00179.HK)$ ：A global leading automotive micro-motor supplier, dual-focused on liquid cooling and robotics, entering the new AI track.

Johnson Electric ranks second globally in automotive micro-motor market share, with core clients being top Tier 1 automakers. The company has leveraged its original thermal management pump technology to enter the AIDC liquid cooling system, with liquid cooling pumps receiving additional orders from Vertiv. By 2026, shipments are expected to exceed 50,000 units, while samples have been sent to clients such as Delta and Inspur. The liquid cooling business aligns with the expansion direction of AI computing infrastructure and shares common capabilities with the company's thermal management pump foundation, with clear order flow and revenue-profit expectations.

Robotics deployment covers rotary joints, linear joints, dexterous hand actuators, and frameless torque motors, with linear joints peaking at up to 8,500N. Reports suggest the company has signed a PPA with overseas giants for dexterous hand motor applications, making it a core target for Q2 robotics concepts.

In the past five trading days, it benefited from the rapid inflow of southbound funds, with the proportion of Hong Kong stock connect holdings continuously rising in May.In the short term, focus on the realization pace of liquid cooling orders and the progress of the robotics business moving from validation to commercialization.

[III. Focus for This Week]

[4. Major bank views]

US Stock Summary:The current profitability and capital structure still support the main line of technology growth,Investment strategy continues to favor structural allocation, with a focus on the AI infrastructure chain and leading communication service technology companies, while accepting increased volatility, avoid chasing the most extremely crowded short-term overheated segments. Short-term fluctuations may be unavoidable, but if the investment horizon is on a 3/6/12 month basis, one should continue to add positions on dips.

Hong Kong Stock Summary:Hong Kong stocks have clear rebound conditions; the strategy involves layered allocation based on certainty and elasticity --Elasticity layer: semiconductors, computing power, and internet leaders; hedging layer: operator banking dividend assets; event layer: real estate policy trading.Foreign capital risk appetite for emerging markets has recovered, maintaining a tactical buy view on the Hang Seng Tech Index over 1-2 months, with an overweight in tech hardware, power equipment, and non-ferrous metals.

[5. Simulated Portfolio]

Weekly table for 5.1

Rebalancing strategy and profit/loss attribution for May 2nd

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