China’s Stocks Get Upgraded in Divergence From US Markets

The global stock selloff that extended into Asian markets eventually moderated, with equity indexes trimming losses as crypto and Treasury yields recovered. But investors remain nervous on concerns that tariffs and government spending cuts will torpedo growth in the world’s largest economy.

As Citi downgraded US stocks, it upgraded China to overweight in another sign of divergence in their market outlooks. “US exceptionalism is at least pausing” for the coming few months, according to its strategists. While the MSCI China Index slumped, it remains up by over 3% since the start of the National People’s Congress on Wednesday. The rally sparked by AI sensation DeepSeek is infusing new energy into the gathering, which wraps up Tuesday, with Chinese shares on track to post their best performance during an NPC since 2018.