US Senator Steve Daines to lead visit to China before May summit, SCMP reports

This is less about the optics of a delegation and more about the market using China policy as a proxy for the next phase of U.S.-China bargaining: tariffs, export controls, and procurement access. A high-level bipartisan visit paired with an eventual presidential trip raises the odds of a short-lived de-escalation headline cycle, which tends to compress risk premia for U.S.-listed China-exposed AI/hardware names before any actual policy is resolved.

For SMCI, the second-order issue is not direct China demand so much as supply-chain normalization and inventory repricing. If talks reduce the probability of new semiconductor or server-component restrictions, the multiple can re-rate quickly on “less bad” policy even without improving end-demand; conversely, any leak that the visit is cosmetic would hit the most levered AI infrastructure names first because they trade on policy optionality, not just fundamentals.

APP is a different expression of the same theme: it has less direct China exposure, but it is a high-beta AI beneficiary that often gets pulled into the same factor basket when investors rotate into 'AI winners' after geopolitical headlines. The contrarian read is that this news is probably too small to justify a directional macro position on its own, so the cleaner trade is to express a relative view: long U.S. AI compute beneficiaries versus a broad China-sensitive basket, with the catalyst window measured in days to weeks rather than quarters.

The key risk is that markets overprice a diplomatic thaw before there is any concrete concession on export controls or tariffs. If the meeting schedule slips, or if officials immediately walk back expectations, the rally in policy-sensitive semis and server names should fade quickly; that makes call spreads preferable to outright longs, since the upside is headline-driven while the downside is a reversal to prior positioning.