This week witnessed a pullback across the three major indices, with the Shanghai Composite Index falling 0.56%, the Shenzhen Component Index dropping 1.81%, and the ChiNext Index declining 2.23%. As investors assess the road ahead, here is what leading brokerages are saying about the market's trajectory.

China Securities: Tech Correction Rooted in AI Pricing Questions, Not Just Treasury Yields

The recent correction in tech stocks cannot be simply attributed to elevated long-term US Treasury yields. Underlying this pullback is the longer-term pricing dilemma for AI-related equities, with three key narrative variables at play: the pace and scope of commercialization relative to market expectations, whether computing power advantages translate into market share and pricing power, and whether current computing gaps will significantly widen future AI model disparities. The consensus worry centers on commercialization speed and scope, while the biggest potential variable is whether "distillation prevention" measures will once again widen model gaps. Macro factors, such as the US Treasury's long-bond buyback announcement, have limited impact, though a weaker dollar and softening rate-hike expectations could help narrow global market divergence. However, the underlying forces keeping US long-end rates elevated remain unchanged, suggesting persistent future disturbances. Given these external pressures, the short-term capital structure in A-shares is complicating market dynamics, and investors should temper expectations during this consolidation phase and avoid overindulging in grand narratives.

GF Strategy: US Bond Yields Are Icing on the Cake, Not a Lifeline for A-Shares

For A-shares, in a market defined by a clear industrial cycle, the industry cycle acts as the numerator and US bond yields as the denominator, with their four directional combinations producing distinct market outcomes. In aligned scenarios, pricing is driven by industrial fundamentals, with US yields only affecting the slope and short-term volatility, not the direction. When the two move inversely, they can create a double whammy or double boost. The first principle for judging an industrial mainline is assessing the position of the earnings cycle. If the industry trend is upward, a rapid rise in US yields may cause periodic shocks but typically won't alter the upward direction; conversely, if the trend is downward, even a fall in yields is unlikely to reverse the downtrend. From a pricing perspective, a rising US yield trend hits long-duration assets hardest, while assets in an industry boom cycle are less affected by valuation shocks.

Shenwan Hongyuan: September Rally to Persist, Focus on Sectors with Strongest Rebound Potential

Within the AI chain, attention should shift toward non-institutional heavyweight positions, with domestic computing power chains and small-cap AI stocks serving as short-term plays. In the global computing chain, sectors with later cyclical downturns and fresh catalysts, such as storage and PCB, are likely to deliver high elasticity. Post-September, the market may anticipate a longer consolidation for tech stocks, meaning non-tech sectors could outperform for extended periods, and high-dividend assets may enjoy longer absolute return windows. In non-tech tracks, innovative drugs and CXO are showing positive capital circulation, while precious metals are rapidly forming consensus and could follow suit. Opportunities also exist in industrial metals and basic chemicals. For high-dividend assets, the weight difference between the CSI 800 index and Q2 2026 public fund holdings offers a useful screening approach, with banks, non-bank financials, food and beverage, and utilities warranting attention.

Everbright Securities: Earnings Season Could Be the Best Allocation Window for H2

The market is poised for a rebound, and the mid-August earnings disclosure period could mark a turning point from valuation digestion to earnings-driven momentum, making the reporting season the optimal allocation window for the second half. The core market concern revolves around the sustainability of overseas AI capex, but since 2020, at least two similar debates have been settled by subsequent earnings reports, each accompanied by a 10%-20% sector pullback followed by recovery within months. Current domestic and overseas tech earnings maintain high growth, and overall profit growth is rising alongside PPI, with full-A non-financial mid-year earnings growth potentially reaching around 15%. Combined with systematic policy support and A-shares' declining sensitivity to overseas shocks, the reporting season could trigger a shift to earnings-driven momentum. Allocation should follow three earnings mainlines: tech hardware including semiconductors, AI computing power, and storage as the strongest improvers; the price-hike chain covering nonferrous metals, chemicals, and coal benefiting directly from PPI recovery; and export manufacturing in energy storage, power equipment, and autos. Non-bank financials, pharma/CRO, and defense with order inflection points also merit attention.

Oriental Securities: Adjustment Reflects Reordering by Earnings Delivery, Not a Rejection of AI

Over the past week, both Chinese and US AI sectors entered a phase of earnings delivery and valuation repricing. Domestically, companies like Baidu and Alibaba are seeing robust AI revenue growth, while chip firms such as GigaDevice, Puya Semiconductor, Fudan Microelectronics, and Zhongwei Semiconductor have reported strong half-year profits. Optical module players like Zhongji Innolight, YOFC, and TFC Communication show notable earnings elasticity, with AI office and supporting materials also rising. On the financing front, Yangtze Memory's IPO acceptance and Unitree's debut surge of over sixfold highlight activity. Overseas, storage leaders are buying back shares and raising shareholder return floors, while Anthropic's annualized revenue run rate has surpassed $65 billion. High-frequency data indicates model-layer price cuts are driving volume growth rather than shrinking demand, with the Token Spending Index turning upward this week. Hardware prices remain elevated, with H100 rental rates high and DDR5 spot prices hitting record highs, signaling supply constraints persist. The divergence in equity and bond pricing for cloud giants suggests market skepticism about debt-funded computing expansion. The correction structure shows clear earnings validation layering, with US hardware leading declines while A-share optical modules hold up relatively better, marking a reordering by earnings delivery.

Industrial Securities: September to Be a Critical Decisive Window for Tech

In September-October, with oil prices retreating and market repricing of rate expectations, US long-bond yields are likely to peak and decline. For tech stocks, this would provide a second denominator-side support following the easing of micro-liquidity pressures in July, offering a favorable window to rebuild consensus. As concerns over ultra-long bond issuance and ARR disappointments ease from September onward, a decisive window for the tech sector will emerge. Medium-to-long term, even if slow-moving variables like fiscal expansion and AI bond crowding are hard to resolve quickly, industry trends and momentum remain the core drivers of this AI cycle.

Zheshang Securities: No Need for Excessive Pessimism, Market Retains Ability to Attack Again

Despite the market entering a brief adjustment after consecutive rebounds, the medium-term rebound is not over, and this is merely a "step back" in an "advance two, retreat one" pattern. The Shanghai index's rebound to 3994 points this week approached the 0.5 retracement level of the decline since May and the 4000-point mark, making consolidation a normal response before further advances. The ChiNext's retreat to 3747 points, near the 0.5 retracement of the decline since late June, is similarly reasonable. For allocation, medium-term positions should be held while waiting for the rebound to play out, with short-term positions added opportunistically during dips. In terms of sectors, innovative drugs have risen substantially and should be bought on pullbacks rather than chased; securities and Hang Seng Tech are completing their "retreat" phase and can be accumulated at lower levels; media, computers, and central state-owned enterprises follow similar logic; and property-related names deserve attention given recent policy support.

Guosen Securities: Sector Rotation Supports Market Bottom, Balanced Allocation Advised

Looking at the 1990s US internet boom, rising US bond yields caused periodic tech pressure, with the next upward move triggered by easing liquidity tightening expectations. High-prosperity sectors in A-shares typically form M-tops, with the second peak about six months later at 80%-90% of the prior high. Current sector rotation underpins the market bottom, suggesting balanced allocation, with growth potentially spreading to AI applications while maintaining exposure to dividends and domestic demand sectors like pharma.

Kaiyuan Securities: Trading Crowding Still Digesting, Volatility Likely to Stay Elevated

Short-term, trading crowding is still being digested, and market volatility may remain elevated. Continue capturing rebalancing opportunities: small-cap indices like CSI 2000 and Wind Micro-cap should be prioritized; sector rebalancing favors nonferrous metals, basic chemicals, new energy, agriculture, pharma, and select midstream manufacturing; banks, utilities, and power offer attractive risk-reward in high-volatility environments. Medium-term, the bull market logic remains intact, but expectations for slope should be tempered. Tech remains the medium-term mainline, though broad beta gains are harder to come by, with returns increasingly coming from reselection within the sector. Look for intersections of "second ignition and narrative tension" in AI materials, domestic computing power chains, PCB and optical module upstream, programming agents, enterprise agents, and new prosperity directions from tech spillover like power equipment, energy metals, and liquid cooling.

Founder Strategy: Buy on Dips, Focus on Three Allocation Opportunities

The market hit its rebound high early last week, with major indices and sectors up around 15% from the bottom in a short timeframe. The subsequent pullback was driven by US bond yield disturbances and cracks in the tech narrative. At this stage, investors may need to await new opportunities. While last Wednesday's sharp decline released most risks, rising oil prices complicate Fed policy choices and keep US bond pressure intact, though dollar weakness mitigates some negative impacts. The economy is entering peak season, but high energy prices pressure fundamentals, and post-Political Bureau meeting policy effects require verification. The risk of a weak peak season should be watched. Strategy-wise, buy on dips across three fronts: first, within tech during earnings season, tilt toward sub-sectors with pricing power and volume growth, including overseas computing names with low crowding, domestic semiconductor equipment and materials with strong certainty, and relatively low-position AI applications and Hang Seng Tech; second, under a weak dollar, focus on HALO assets, including nonferrous metals, chemicals, energy storage, grid equipment, and coal; third, pharma leaders with good fundamentals, low crowding, and easing negative pressures.