BlackRock's statement said that the increased volatility in the US stock market is caused by multiple factors: weakening economic data leading to market concerns about a recession in the US, tense sentiment before the US election, and investors selling for profits to make room for new stock offerings. However, US corporate earnings still show resilience, with all industries exceeding second-quarter earnings expectations, leading to an overall improvement in profit margins. Relevant data shows that second-quarter earnings for S&P 500 index component companies increased by 13%, surpassing the general expectation of 10%. As shown in the figure below, analysts predict that US stocks are expected to see widespread earnings growth in the next 12 months, especially in industries related to artificial intelligence themes. Although technology companies continue to lead in earnings, the gap in earnings growth between other companies and US technology companies is narrowing, indicating that the upward trend in US stocks is expected to expand. In the backdrop of continued market volatility, BlackRock expressed optimism for high-quality companies that can continue to achieve sustainable earnings growth and free cash flow. BlackRock stated that it is not only focusing on US technology stocks, but expanding to a wider range of fields related to artificial intelligence development. In addition, the institution has adjusted its view on Japanese stocks, but still remains overweight. It holds a neutral view on short-term US bonds, but is optimistic about medium-term US bonds and high-quality credit bonds. BlackRock remains positive about opportunities related to the artificial intelligence theme but has made some adjustments to its allocations. In the first phase of current artificial intelligence development, investors are questioning the scale of capital expenditures by major technology companies in artificial intelligence, as well as whether the application of artificial intelligence will accelerate. While closely monitoring relevant signals to adjust viewpoints in a timely manner, patience is needed as there is still a long way to go in artificial intelligence development. However, changes in market sentiment towards these companies may put pressure on their valuations. Therefore, BlackRock is shifting its focus towards beneficiaries of the first phase of artificial intelligence development, including energy and utility companies providing critical inputs, as well as real estate and resource companies related to artificial intelligence development. Apart from the US, BlackRock has adjusted its view on Japanese stocks but still remains overweight. Due to the drag on corporate earnings from the appreciation of the yen and some ambiguous policy signals from the Bank of Japan following higher-than-expected inflation, the bullishness on Japanese stocks has been downgraded, but corporate reforms in Japan are expected to continue to improve shareholder returns. The growth in US corporate earnings is no longer limited to early winners in artificial intelligence, indicating that the US economy is more resilient than what the market pricing reflects. While the market expects a slowdown in US economic growth, the extreme reaction to weak economic data is somewhat exaggerated. Compared to what sentiment data suggests, current US economic activity is actually still in good shape. The rise in unemployment is due to an increase in labor supply from immigration, not a decrease in demand. Looking at the medium term, ongoing trends such as a declining workforce, huge US fiscal deficits, and geopolitical divisions will continue to cause inflation to remain elevated. Although recent US inflation is trending towards the Federal Reserve's target, the rise in inflation in the medium term will limit the extent to which the Federal Reserve can cut interest rates. Concerns about economic growth and cooling inflation have caused the yield on the 10-year US Treasury bond to drop to its lowest level in 15 months, as investors expect the Federal Reserve to cut rates by over 100 basis points by year-end and by about 240 basis points in the next 12 months, indicating that the Federal Reserve will respond to an economic recession. As a result, the policy rate may be lower than BlackRock's expected neutral rate, which is a rate level that neither stimulates nor hinders economic growth. BlackRock holds a neutral view on short-term US bonds and is looking for income opportunities in other developed market areas, such as short-term eurozone bonds and credit bonds.