Trump's "chaotic" speech triggers a massive shake-up in global stock markets! The Shanghai Composite barely holds above 3,900 points. What's the next move?

On April 2, the market fluctuated throughout the day to adjust. Both the ChiNext Index and the STAR Market 50 Index fell by more than 2%, while the Shenzhen Component Index fell by more than 1%. By the close, the Shanghai Composite Index fell 0.74%, the Shenzhen Component Index fell 1.6%, and the ChiNext Index fell 2.31%.

In terms of sectors, the pharmaceutical sector surged against the trend, oil and gas stocks were active, and the fiber-optic concept repeatedly strengthened. On the downside, the computing power leasing concept saw a collective pullback.

More than 4,300 stocks across the entire market fell. Trading value on the Shanghai and Shenzhen exchanges was 1.84 trillion yuan, down by 169.5 billion yuan versus the previous trading day.

Longtime readers should know that our recap articles pushed on trading days typically have titles along the lines of “discussing the行情 in light of the行情”; only when it’s a weekend preview do we mention some developments more generally.

But today, there really is no way around it.

The reason the market is falling is right there, plainly.

Trump’s speech shocks the market

Late Wednesday local time—9:00 a.m. Thursday Beijing time—following U.S. President Trump’s national address, global financial markets moved in sync and saw a major shock:

Asian-Pacific equities fell, U.S. stock index futures dropped, and both gold and silver plunged—only oil prices jumped higher.

Just like the South Korean market that had “upward circuit breakers” yesterday, today it saw a “downward circuit breaker” in the afternoon.

Based on reports from outlets including Xinhua News Agency and CCTV News, Trump’s remarks have three main points:

First, he claims to have achieved “rapid, decisive, overwhelming victory” in the war with Iran. Trump said Iran’s ability to launch missiles and drones has been “greatly weakened,” and that weapons factories and rocket launch systems are “left with very little”; U.S. strikes against Iran’s nuclear facilities achieved “a tremendous success,” reducing the nuclear threat for the U.S. and other countries.

Second, Trump said the core strategic objective of the U.S. war against Iran is “nearing completion”; the U.S. no longer needs the Strait of Hormuz as in the past, and it does not need it now either.

Third, Trump said that in the coming weeks the U.S. will carry out even stronger firepower strikes against Iran. If an agreement cannot be reached, the U.S. will carry out fierce attacks on all of Iran’s power generation facilities. In addition, the U.S. is carrying out close monitoring and control of these facilities via satellites. If it discovers any abnormal moves by the other side, the U.S. will immediately launch missiles and deliver a “devastating” strike.

But for the market, the biggest effect of these remarks is that they have crushed investors’ optimistic expectations that the war will end quickly.

Just one day earlier (March 31), Trump said from the White House that the U.S. would end the war with Iran within “two to three weeks,” and that an agreement with Iran might be reached before that.

According to CCTV News, on social media, the Democratic leader of the U.S. Senate, Chuck Schumer, wrote: “Is there any more rambling, illogical, and truly heartbreaking presidential war speech than this?”

Iran’s response was also relatively tough. According to Xinhua News Agency, citing Iran’s Islamic Republic News Agency, on April 2 Iran’s Ministry of Foreign Affairs spokesperson Baghaei said on the day that the whole of Iran is united and will stand together to resist an “unjust, aggressive war.” As long as this “illegal war” continues, as long as the enemy continues to attack the people and cities of Iran, Iran will continue to resist.

What’s the way to respond next?

By the close, the Shanghai Composite Index once again narrowly held the 3,900-point level, with the intraday low reaching 3,900.12.

It is worth noting that among the three major indices, both the Shenzhen and ChiNext indices have today pulled back to below the 120-day moving average—also the lower edge of the recent sideways range box. Meanwhile, the Shanghai Composite Index, long overdue, showed a “5-day line crossing above the 10-day line” situation, which actually looks slightly more positive.

We still believe that although we can’t say “if everyone loses, then everyone hasn’t lost,” extreme pessimism is not the right approach.

On the one hand, today’s decline is also because the market is about to enter a 3-day holiday, increasing the demand for funds to stay on the sidelines in cash.

On the other hand, the scenario in which the market is “stirred up” by Trump’s speech actually matches the prior projections of some institutions.

For example, a research report from Huaxi Securities stated that (in the recent A-share market) the low-volume energy pattern has not changed, and capital is taking a cautious attitude toward easing expectations. Trading value is still around the 2 trillion yuan level, and the market has not become more active merely because of positive news.

It said that, in terms of the positive news itself, Trump’s statements are typically unpredictable and changeable, so there is still doubt about whether the market’s expectations can be fulfilled. From the perspective of capital flows, there is relatively little floating stock; most chips may be held by medium- to long-term allocation-oriented funds. Such funds have low sensitivity to short-term, event-driven catalysts and trade more steadily; therefore, even if positive signals appear, the market’s response is relatively limited.

Therefore, there will still be difficulty in subsequent trading. Since March, the market has continued to operate with shrinking volume, leaving investors facing trading-level dilemmas: left-side funds are prone to position themselves in the middle of falling retracements, while right-side funds face the dilemma of sector rotation moving too fast—chasing after rallies is likely to run into pullbacks.

Against this backdrop, position management remains of utmost importance, while also staying cautious about earlier high-priced targets, and participating in varieties with relatively low valuations and fundamental support—for example, power equipment, media, agribusiness and animal husbandry, and large financials, among others.

Debang Securities also believes that, with external conflicts not significantly easing and in a backdrop where signals from incremental capital are not obvious, in the short term the A-share market may be led primarily by a risk-avoidance sentiment and likely to trade in a range.

From today’s market performance, besides the oil and gas sector’s big rally that followed the logic, the pharmaceutical sector, which has been continuously active recently, still showed some standout performances.

On the news front, Eli Lilly announced on Wednesday local time that the U.S. Food and Drug Administration (FDA) has approved its GLP-1 oral drug for market launch. In addition, the 37th International Conference of the Alzheimer’s Association will be held in Lyon, France, on April 14–16, 2026.

Market analysis believes that China’s innovative drug industry is currently shifting from scale expansion toward deep value cultivation. The logic of competition in the industry has changed from “competing on speed” to “competing on depth.” In this profound transformation, only companies with source-level innovation capability, independent commercialization systems, and a global perspective can truly navigate cycles and establish growth certainty.

The banking sector also played a role in supporting the market. Agricultural Bank of China rose 3.44% by the close, ranking first in its contribution to the overall market’s gains.

（Source: The Daily Economic News）