On September 9th, A-shares retreated with expanded losses in the afternoon session. The Shanghai Composite Index briefly fell below the 3,800-point mark, while the ChiNext Index plunged over 3% at one point. Most individual stocks closed lower, with technology sectors posting the largest declines as 4,011 stocks fell. Despite active market trading, investor sentiment remained cautious, with daily turnover contracting to 2.15 trillion yuan.

Market participants noted that while the Shanghai Composite briefly broke below 3,800 points during trading, bargain-hunting funds quickly entered the market, demonstrating strong support at this level. This suggests today's pullback resembled normal consolidation within a bull market trend. Although A-shares may continue experiencing short-term volatility, the medium-term upward trajectory may remain intact.

**ChiNext Index Falls Over 2%**

The Shanghai Composite closed down 0.51% at 3,807.29 points, while the ChiNext Index finished 2.23% lower at 2,867.97 points. The Shenzhen Component Index declined 1.23%. The STAR 50 and Beijing Stock Exchange 50 indices fell more than 2%, while the CSI 300 and SSE 50 posted modest declines.

Trading volumes contracted, with turnover dropping to 2.15 trillion yuan. As of September 8th, margin trading balances increased to 2.31 trillion yuan, requiring leveraged funds to monitor pullback risks. On the trading day, 1,299 A-share stocks gained with 63 hitting daily limits, while 4,011 stocks declined and 7 reached daily limit downs.

Real estate, conglomerate, banking, and non-ferrous metals sectors provided market support. Nine property stocks including Suning Universal, Shoukai Co., Binjiang Group, Hezhan Energy, Wolong Electric Drive, and Gorgeous Family hit daily limits. Food & beverage, textile & apparel, and commercial retail sectors posted slight gains, with stocks like Xiaocheng Technology, Hengbang Co., Western Gold, Chifeng Gold, and Shenzhen Xinxingda reaching daily limits. Additionally, seven light manufacturing stocks including Qingshan Paper, Jiyou Holdings, Wangli Security, and Yinglian Holdings hit daily limits, along with six automotive stocks including Aotecar, Zhongma Transmission, Tianpu Co., Changyuan Donggu, and Chunxing Precision.

High-positioned sectors experienced pullbacks, with electronics, computers, communications, pharmaceuticals & biotechnology, defense & military, power equipment, machinery, and beauty care posting significant declines.

Supply and marketing cooperative concepts, gold concepts, scarce resources, and dairy sectors performed well.

AIPC, NVIDIA concepts, new industrialization, wireless earphones, SMIC concepts, CRO, AI glasses, and CAR-T cell therapy concept sectors led declines.

A research analyst noted that technology stock trading congestion has recently climbed to historical highs, with markets exhibiting "capital-driven" rather than "fundamentals-driven" characteristics. Under current irrational market exuberance, previously rallying technology blue chips continued declining as funds chose short-term profit-taking, leading to collective technology stock adjustments and driving index downturns. Additionally, rapid leveraged fund expansion has reduced safety margins. As of September 3rd, margin financing and securities lending balances exceeded 2.29 trillion yuan, reaching new highs since 2016. Once market volatility intensifies, leveraged fund fragility amplifies fluctuations, becoming market risk amplifiers. From macroeconomic data perspectives, yesterday's export data showed initial concerns, with August export growth slowing year-over-year, creating negative pressure on A-shares.

Market analysts also indicated this market adjustment primarily stems from profit-taking pressure accumulated during rapid index gains over recent months, with some funds choosing to realize gains. Particularly, pullbacks in high-positioned thematic sectors like semiconductors negatively impacted market sentiment and drove indices into technical consolidation. Trading volume contraction reflects increasingly rational fund sentiment, with bulls and bears entering short-term weak equilibrium. Simultaneously, market styles showed clear rotation, with funds flowing from previously surging technology growth sectors toward defensive industries and stocks with strong defensive attributes and low valuations. Overall, this adjustment represents healthy technical consolidation rather than trend reversal. Medium to long-term, market upward oscillation patterns remain unchanged, though pace may slow with gentler slopes, aligning with "upward continuation" characteristics.

**Short-term Continued Volatility**

Since last week's sharp decline, markets have exhibited alternating rebound and pullback oscillation patterns. How will markets evolve going forward?

"Short-term, indices are expected to maintain narrow-range oscillation. However, with clear positive fundamental expectations and policy support, markets should continue stable and positive operations," said a fund manager. Adjustments in chip semiconductors, optical modules, and other sectors have somewhat affected growth stock market confidence, dragging down ChiNext indices. Currently, internal market structural differentiation is pronounced, with funds showing increasingly cautious sentiment as markets temporarily lack core themes capable of gathering momentum and leading direction. From technical perspectives, indices encountering resistance after multiple upward attempts and subsequently seeking lower support represents normal phenomena.

"Regarding sustainability, while A-shares face short-term volatility, medium-term upward trends may remain unchanged," another analyst believes. The Shanghai Composite's 3,800-point level represents the ten-year high breakthrough position from August, carrying strong psychological significance. Historical data shows support obtained during two previous tests of the 3,750-3,780 range on August 21st and September 4th. Although this session briefly broke below 3,800 points, markets quickly saw bargain-hunting funds enter, demonstrating strong support at this level. Additionally, internal and external funding environments remain relatively favorable. Domestically, monetary conditions maintain looseness with relatively ample market liquidity; internationally, under cooling non-farm data, Federal Reserve September rate cut probability has risen to 78%. Overall, this pullback's nature represents normal bull market consolidation.

"Short-term, markets will likely bid farewell to July-August unidirectional gains. However, extending perspectives to medium-term, we remain optimistic about index upward movement," a fund manager noted. On one hand, policy aspects still anticipate industrial policies from the "15th Five-Year Plan"; on the other hand, global rate-cutting cycles combined with continued domestic resident deposit migration. During oscillation phases, markets will likely spread from previously focused AI computing power and innovative drug areas, with sectors potentially showing rapid rotation until new catalysts and subdivided thematic directions emerge. For AI and other prosperous directions, short-term adjustments stem more from trading congestion, maintaining confidence in core sector targets. For relatively low-positioned sector ranges, rotation may accelerate, requiring focus on potential industrial marginal changes, avoiding deliberate switching for "high-low switching."

"Markets maintaining oscillating strength with structural differentiation patterns appears likely. Market liquidity looseness plus continued favorable policy rollouts boosting investor sentiment suggest greater upward opportunities. Naturally, due to economic recovery uncertainties plus A-share valuations reaching higher positions, market downward pressures continue accumulating," an investment manager analyzed. This year's industrial policies favor technology innovation directions, combined with global AI acceleration implementation, suggesting AI-represented technology growth directions still offer greater opportunities. For aggressive choices, AI, semiconductors, robotics, new energy, and advanced manufacturing technology growth direction leaders with policy support and industrial evolution backing deserve attention. For defensive choices, consider power, energy, and large financial sectors with reasonable valuations and stable cash flows and dividends. Simultaneously, investors should maintain certain cash reserves. This can reduce potential drawdown impacts while providing opportunities to capture post-decline price valleys when markets decline.

Regarding current position layouts, different investment strategy investors should configure differently: existing investors can consider appropriately adjusting position structures, taking partial profits on overvalued technology stocks while transferring funds toward lower-valued sectors; sidelined investors can deploy in batches, focusing on oversold quality targets while awaiting right-side signals; exited investors need not be overly anxious as markets still offer opportunities. Within technology sectors, focus on subdivided areas with definite industrial trends. Among low-valuation sectors, attention should go to industries with significant profit improvement and relatively low valuations, such as power equipment, beauty care, transportation, pharmaceuticals & biotechnology, and food & beverages.

According to another investment manager's view, slow bull markets will continue with technology stocks maintaining advantages, favoring low-valuation sectors with earnings growth. Going forward, market structures will change, gradually evolving from dumbbell structures toward football structures; prosperity investing will gradually replace thematic speculation; development sequences will follow "technology first, then consumption" patterns determined by economic transformation causality. As prosperous industries increase, performance-based slow bull markets will gradually unfold.