The U.S. Federal Reserve held its benchmark interest rate steady, but its official projections for the year have pivoted from anticipating a rate cut to now forecasting a single rate hike. Meanwhile, Apple Inc.'s CEO has indicated that product price increases are on the horizon as the company grapples with soaring memory and storage chip costs.

Key Developments

In a decision announced early Thursday morning Beijing time, the Federal Open Market Committee (FOMC) unanimously voted to maintain the federal funds rate target range at 3.5% to 3.75%. The latest "dot plot" summary of economic projections reveals a significant shift in policymakers' views. While officials previously forecast a single rate cut for the year, the median projection now points to one rate increase by year-end, with expectations for the rate to reach 3.75%-4% by the end of 2026.

Market Overview

U.S. stock markets closed lower overnight. The Dow Jones Industrial Average fell 0.98%, the S&P 500 declined 1.21%, and the Nasdaq Composite dropped 1.34%. Major technology stocks were mostly lower, with Meta and SpaceX leading the declines. The Nasdaq Golden Dragon China Index fell 1.14%. In commodities, WTI crude oil futures edged down 0.35%, while COMEX gold futures dropped 1.79% to $4,276.30 per ounce.

Trading in Hong Kong will be suspended on Friday for the Dragon Boat Festival holiday, with normal operations resuming on Monday. Southbound and northbound Stock Connect services will also be paused on Friday and resume Monday. U.S. markets will be closed on Monday for the Juneteenth holiday.

Sector and Policy Highlights

The State Council has issued a new five-year plan outlining the strategy for prioritizing employment. Separately, the China Securities Regulatory Commission (CSRC) has announced support for the launch of actively managed ETFs on domestic exchanges, a move expected to mark a new phase of "coordinated development between active and passive" investment products in the country's nearly 5 trillion yuan ETF market.

At a financial forum, a former CSRC vice chairman suggested that Hong Kong's financial regulators should actively attract quantitative investment institutions from mainland China to establish operations in the city. The Hong Kong government also stated it is advancing multiple measures to deepen the development of the derivatives market, including product expansion and enhancing connectivity mechanisms.

Corporate News Roundup

Alibaba has unveiled HappyOyster 1.0, a new open-world model product capable of real-time construction and interaction. Apple CEO Tim Cook stated that price increases for its products are "inevitable" as the company contends with significant cost inflation for memory and storage chips, though specifics on timing and affected products were not disclosed.

PATEO Group (02889) has entered into a cooperation agreement with Fuyao University of Science and Technology to jointly research and develop core materials in areas like silicon photonics and fourth-generation semiconductors.

Giant Biogene Holding Co Ltd (02367) announced that its cross-linked recombinant collagen implant has received medical device registration approval from China's National Medical Products Administration (NMPA), becoming the world's first such product for neck wrinkle filling.

iFLYTEK Healthcare Technology (02506) has signed a memorandum of understanding with PT DSST Mas Gemilang to establish a long-term strategic partnership aimed at deploying AI healthcare solutions in Indonesia.

China High Speed Transmission Equipment Group Co Ltd (00658) reported its annual results for the period ending December 31, 2025, posting a profit attributable to owners of 211 million yuan, a significant turnaround from a loss of 6.557 billion yuan a year earlier. The company's shares resumed trading on June 18.

Peking University Resources (Holdings) Ltd (00618) issued a profit alert, expecting to report an annual profit between 1.4 billion and 1.8 billion yuan, reversing from a loss, primarily due to a substantial gain from an asset disposal.

Conversely, Fufeng Group Ltd (00546) warned that it may record a loss or a significant decrease in profit for the interim period, citing foreign exchange losses and continued weak selling prices for its main products.

Focus Stock: Biren Technology (06082)

Biren Technology has completed the adaptation and optimization of the newly released flagship open-source model, GLM-5.2, from Zhipu AI. The company's Bitrix 166 series, based on the vLLM inference framework, provided "Day0" support for the model. As a leading provider of general-purpose intelligent computing solutions in China, Biren continues to support the large-scale deployment of top domestic large language models, having already facilitated the rapid adaptation of models from companies like Zhipu, StepFun, MiniMax, DeepSeek, Tencent, Moonshot AI, and Alibaba.