How do stimulus policies shape firms’ expectations and decisions? The authors answer this question using a high-frequency survey of Chinese micro and small enterprises linked to transaction-level outcomes. Exploiting the overlap between the 2024Q3 survey window and China’s late-September 2024 stimulus announcements, the authors show that firms update their expectations rapidly: expected growth, inflation, and stock returns rise, while subjective uncertainty falls. Firms also become more optimistic about their own revenues and business prospects, are less likely to plan shutdown, and shift financing demand toward expansion. Beyond average effects, the announcement strengthens the synchronization between macro and micro expectations, weakens extrapolation from recent firm performance, and improves the alignment between expectations and subsequent realized outcomes. The results point to an expectations channel of stimulus transmission.