The Shanghai Composite fell 0.94% to close at 3,897, while the Shenzhen Component dropped 2.7% to 13,355 on Friday, erasing the prior session’s gains amid soft global cues. US stocks tumbled overnight as concerns grew over stretched valuations, particularly among AI-related firms, while investors assessed the impact of the prolonged US government shutdown and the Federal Reserve’s rate outlook. A gauge of US-listed Chinese firms slid 2% on Thursday, suggesting that the recent rally in mainland shares may be losing steam. Investors now turn their attention to the Communist Party’s leadership meeting on Oct. 20–23 and a possible Xi-Trump meeting at the APEC summit later this month for new policy signals. New energy and technology stocks led the retreat, with sharp losses from Contemporary Amperex (-6.8%), Sungrow Power (-7.8%), China Northern Rare Earth (-1.2%), Luxshare Precision (-6.9%), and Zhongji Innolight (-2.2%).