Hang Seng Index: Tech Stocks Hit as US Targets Chinese Semiconductor Firms

US Markets React to Inflation Indicators

Wall Street faced challenges for a second session as markets digested corporate news and economic data. The Nasdaq Composite Index dropped 0.18%, while the Dow and the S&P 500 rose 0.65% and 0.41%, respectively.

US producer prices rose 2.4% year-on-year in April, slowing sharply from a 3.4% increase in March. Typically, producers lower prices as demand weakens, passing cost savings on to consumers. April’s price trends signaled a softer inflation outlook, supporting a Q3 2025 Fed rate cut.

According to the CME FedWatch Tool, the probability of a September rate hike increased from 49.1% to 51.5% in response to the day. Meanwhile, the chances of a 50 bps hike rose from 17.8% to 23%.

However, concerns about tariffs dampened optimism about a Fed rate cut. Amazon.com (AMZN) dropped 2.42% after Walmart (WMT) announced plans to hike prices, weighing on the Nasdaq.

The mixed session in the US influenced market sentiment during Asian trading hours on Friday, May 16.

Hang Seng Index Drops on US Administration Moves

Asian equity markets had a mixed morning session on Friday, May 16. The Hang Seng Index fell 1.07% as investors responded to reports of the Trump administration considering adding more Chinese semiconductor firms to the US export blacklist. CN Wire reported:

“The Trump administration is considering adding several Chinese semiconductor firms to the U.S. export blacklist, but some officials are urging a delay to avoid disrupting ongoing trade talks with Beijing. The U.S. Commerce Department has reportedly drafted plans to place ChangXin Memory Technologies (CXMT), along with subsidiaries of Semiconductor Manufacturing International Corp (SMIC) and Yangtze Memory Technologies Co (YMTC), on the entity list.”

• The Hang Seng Tech Index declined 0.82%, while the Hang Seng Mainland Properties Index slid 1.11%.
• Tech giant Alibaba (9988) tumbled 4.89% after missing earnings estimates, while Baidu (9888) fell 2.29%.

Mainland China’s equity markets also moved lower, with the CSI 300 and Shanghai Composite down 0.59% and 0.49%, respectively.

Nikkei 225 Extends Losses as Yen Steams Ahead

Japan’s Nikkei 225 fell 0.44% on Friday morning, as the USD/JPY pair extended its losses, dropping below 145 in early trade. A stronger Yen could affect export competitiveness and weigh on corporate earnings.

Sony Corp. (6758) slid 2.96%, while Softbank Group (9984) and Tokyo Electron (8035) fell 0.40% and 3.21%, respectively. However, auto stocks posted early gains. Nissan Motor (7201) rallied 3.26%, while Honda Motor Co. (7267) rose 0.29%.

ASX 200 Extends Gains as Mining Stocks Rebound

Australia’s ASX 200 bucked the broader market trend, gaining 0.64% on Friday morning. Banking, mining, and gold stocks led the gains.

Commonwealth Bank of Australia rose 0.32%, while National Australia Bank (NAB) advanced 0.90%. 10-year US Treasury yields tumbled overnight, boosting demand for high-yielding Aussie bank stocks.

Aussie miners BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) rallied 1.74% and 1.20%, respectively, while Northern Star Resources (NST) jumped 4.1% on rising gold prices.

Outlook: Watching Trade and Beijing Stimulus

Markets remain exposed to trade developments. Progress toward trade deals may lift risk sentiment and reduce demand for safe-haven assets, while rising tensions might trigger another flight to safety.

Investors should also watch for any stimulus announcements from Beijing. New measures could offset the impact of tariffs and support demand for Hong Kong and Mainland-listed stocks.

Investors should stay alert and respond promptly to trade developments and central bank policies. Follow our live coverage here for updates on US-China trade talks.