Hong Kong Stocks Slide as Tariff Risks Resurface
While US equity markets advanced on May 29— with the Nasdaq Composite Index up 0.39%— the appellate court’s decision impacted risk sentiment. In response, Dow mini and Nasdaq 100 futures fell 44 and 65 points, respectively. Hong Kong markets also reacted to the trade headlines, with the Hang Seng Index sliding 1.55% to 23,209. Mainland indices also declined, with the CSI 300 and the Shanghai Composite Index falling 0.67% and 0.54%, respectively.
Tech Stocks Fall Sharply; EV Sector Mixed
The all-important Hang Seng Tech Index tumbled 2.59% as investors reacted to overnight trade developments. Tech giants Alibaba (9988) and Baidu (9888) dropped 3.30% and 3.56%, respectively. The US government’s suspension of chip software exports to China intensified selling pressure in the sector.
Meanwhile, EV stocks posted mixed performances at the session’s start. BYD (1211) and Geely Automobile Holdings (175) fell 3.20 and 2.82%, while Li Auto (2015) surged 7.3% after reporting upbeat Q1 2025 earnings and a positive outlook. The carmaker also unveiled plans for new model launches.
Liberation Day Tariffs Reinstated
On May 29, the US Court of Appeals overturned the prior day’s Court of International Trade ruling, reinstating Trump’s Liberation Day tariffs. Although the administration has rolled back most tariffs since April 2, the reinstatement reignited fears about the 90-day truce in the US-China trade war. A lack of meaningful progress toward a trade agreement raises the specter of renewed 145% tariffs on Chinese goods and a 120% tariff on US exports to China.
US Treasury Secretary Scott Bessent spoke overnight about US-China trade developments, suggesting trade talks have stalled. According to CN Wire:
“US Treasury Secretary Scott Bessent said trade talks with China are “a bit stalled” and suggested a call between President Donald Trump and Chinese President Xi Jinping may be necessary to reach a deal. In an interview Thursday, Bessent noted the importance of direct leader engagement given the magnitude and complexity of the negotiations… and he expects more talks with Chinese officials ‘in the next few weeks’.”