China Tech Stocks Falter Amid New U.S. Tariff Concerns

China and Hong Kong markets faced setbacks with key tech stocks dropping amid rising U.S. tariff concerns. The Hang Seng Tech Index saw dips, despite previous streaks of gains influenced by strong earnings and AI optimism. Geopolitical tensions intensified with Trump's planned semiconductor curbs.

China and Hong Kong stock markets faced notable woes on Tuesday as a sharp sell-off in tech stocks, alongside heightened U.S. tariff threats, cast a shadow over investors. The Hang Seng Tech Index initially nosedived by 4.3% but managed to recover slightly to close down by just 0.03%.

Market leaders like Alibaba and Baidu saw declines of 2.7% and 2.9% respectively. These downturns ensued as the benchmark Hang Seng Index fell by 0.6%, aligning with a 0.4% dip in the onshore CSI 300 Index. The pullback signals a pause in the tech index's six-week winning streak propelled by strong earnings and advancements in artificial intelligence.

Adding to market jitters, the Trump administration's move to tighten semiconductor restrictions on China stoked geopolitical worries. This action aligns with the "America First Investment Policy," aiming to further restrict China. The Nasdaq Golden Dragon China Index marked its steepest fall since October, dropping 5.2%. The sentiment from UOB Kay Hian's Qi Wang suggests the market is now grappling with trump-induced volatility.

(With inputs from agencies.)