On the last trading day before the Mid-Autumn Festival (September 24), the market consolidated and all major A-share indices closed lower.
The non-ferrous metals sector, which is relatively more sensitive to macroeconomic disturbances, led the market decline. The underlying index of the Non-Ferrous Metals ETF Huabao (159876), which captures leading companies across the non-ferrous metals industry and boasts strong interim results (all 60 constituent stocks were profitable), retreated in line with the market, ultimately closing down 3.54% and currently sitting below all moving averages.
Among constituent stocks, China Rare Earth closed in positive territory against the broader market trend. Rare earth leaders such as Northern Rare Earth and China Rare Earth Nonferrous, as well as aluminum leaders such as Huafeng Aluminum and Shenhuo Group, recorded relatively smaller declines.
On the other hand, copper leaders such as Jintian Coppers and Northern Copper Industry, along with gold leaders such as Shandong Gold and China National Gold, posted the steepest declines, dragging down index performance.
Why did non-ferrous metals pull back so sharply?
The main pressures came from external factors: 1. Strong PMI data: The preliminary U.S. September composite PMI climbed to 58.4, exceeding expectations (forecast of 55.3) and hitting a more than five-year high (since July 2021). A PMI above 50 typically indicates strong economic expansion momentum, and 58.4 falls within a robust expansion range, triggering market concerns that the economy is shifting from "resilience" to "overheating." 2. Hawkish Fed official remarks: Federal Reserve Governor Barr stated that further policy adjustments are needed to bring inflation back to target in a timely manner. 3. Oil price rebound: Rising energy prices supported the dollar, with Brent crude oil prices climbing back above $100 per barrel. 4. Sharp rise in U.S. Treasury yields: The 10-year U.S. Treasury yield broke above 5.1%, the highest since 2007. Previously, 5% had been viewed as the psychological threshold for the 10-year Treasury yield, and a breakthrough could trigger significant volatility in global financial markets. 5. Weak demand at the 5-year Treasury auction: The U.S. Treasury issued $70 billion in 5-year notes on Wednesday, with the final award rate reaching 5.033%, the highest since 2006, meaning the market still lacks sufficient willingness to absorb new supply of medium-term U.S. debt, and investors are demanding higher term premiums to hold U.S. government bonds.
As a series of news emerged, the dollar index rose, spot gold fell below the $4,300 mark, and the market now prices the probability of a 25-basis-point Fed rate hike in October at approximately 75%.
However, considering the Fed's multiple constraints comprehensively, Huabao Fund leans toward a scenario of moderate and gradual rate hikes. Huabao Fund noted that Powell's aggressive rate hikes in 2022 (425bp for the full year) had the deep objective of combating 9.1% malignant inflation and compensating for post-Russia-Ukraine conflict credit discounts with high interest rate spreads. Currently, under Chairman Warsh, the Fed faces moderate inflation, an economic slowdown, and high debt macro constraints, and can only raise rates moderately and gradually (25bp per meeting) to balance inflation and employment, making it difficult to replicate the aggressive 2022 rate hike path.
Huabao Fund believes that current market volatility is more about sentiment-driven speculation rather than a collapse in industrial logic. It recommends remaining rational, avoiding emotional trading, and patiently waiting for macro disturbances to fully play out.
Looking ahead, the valuation repair and fundamental growth logic of the non-ferrous metals sector is expected to gradually return. Short-term pullbacks solidify the sector's bottom, and the medium-to-long-term allocation value of the non-ferrous metals sector remains favorable.
In the Computing Power Era, Non-Ferrous Metals Build the Foundation
The Non-Ferrous Metals ETF Huabao (159876) and its feeder funds (Class A: 017140, Class C: 017141) comprehensively cover leaders in copper, aluminum, rare earth, gold, lithium, tungsten, molybdenum, tin and other industries, with heavyweight holdings including Zijin Mining, China Molybdenum, Northern Rare Earth, Aluminum Corporation of China, and others. According to 2026 interim results, all 60 constituent stocks achieved profitability, with nearly half reporting year-on-year growth in net profit attributable to parent company exceeding 100%, providing solid support from strong fundamentals. Moreover, the number of constituent stocks is significantly higher than comparable non-ferrous metals indices (30-50 stocks), enabling better coverage of semiconductors and new materials. For investors bullish on both technology and non-ferrous metals, this ETF is an efficient tool for one-click exposure to the non-ferrous metals industry and capturing sector beta.
Source: Shanghai and Shenzhen Stock Exchanges, etc., as of September 24, 2026. Note: The individual stocks mentioned in this article are all constituent stocks of the underlying index of Non-Ferrous Metals ETF Huabao (159876). As of the end of August, their respective weights were: Zijin Mining, 11.14%; China Molybdenum, 7.12%; Northern Rare Earth, 4.40%; Aluminum Corporation of China, 3.31%. The index constituent stocks in this article are for illustrative purposes only, and individual stock descriptions do not constitute any form of investment advice, nor do they represent the holdings or trading activities of any fund managed by the manager. ETF fee disclosure: When investors subscribe to or redeem fund shares, the subscription/redemption agent may charge a commission of no more than 0.5%. On-exchange trading fees are subject to actual charges by securities companies. ETFs do not charge sales service fees. Feeder fund fee disclosure: Huabao CSI Non-Ferrous Metals ETF Initiating Feeder Fund (Class A) has a subscription fee of RMB 1,000 per transaction for subscription amounts of RMB 2 million (inclusive) or more, 0.6% for RMB 1 million (inclusive) to RMB 2 million, and 1% for amounts below RMB 1 million; the redemption fee is 1.5% for holding periods of less than 7 days, 0% for holding periods of 7 days (inclusive) or more, and no sales service fee is charged. Huabao CSI Non-Ferrous Metals ETF Initiating Feeder Fund (Class C) does not charge a subscription fee, has a redemption fee of 1.5% for holding periods of less than 7 days and 0% for holding periods of 7 days (inclusive) or more; the sales service fee is 0.3%. Risk disclosure: Non-Ferrous Metals ETF Huabao passively tracks the CSI Non-Ferrous Metals Index, which has a base date of December 31, 2013, was published on July 13, 2015, and its constituent stocks are adjusted in a timely manner according to the index compilation rules. Its back-tested historical performance does not predict future index performance. The risk rating of this fund as assessed by the fund manager is R3-Medium Risk, suitable for balanced-type (C3) and above investors. Suitability matching opinions should be based on the sales institution's assessment. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors are responsible for any investment decisions they make independently. In addition, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, nor shall they bear any responsibility for direct or indirect losses caused by the use of the content herein. Fund investment involves risks, past performance of a fund does not represent its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Fund investment requires caution. MACD golden cross signals have formed, and these stocks are performing well!
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