Hong Kong stocks declined on Friday following a sharp selloff in US technology stocks, with the Hang Seng Index closing down 247 points at 24,963. The downturn was triggered by Tesla and Alphabet reporting disappointing quarterly earnings on Thursday (23rd), causing their stock prices to plummet 14.5% and 7.1% respectively — the worst single-day performance for both companies in over a year. The selloff in the 'Magnificent Seven' tech giants resulted in a combined market capitalization loss of $797 billion, equivalent to more than two HSBC Holdings. Geopolitical tensions contributed to market uncertainty, with Brent crude oil surpassing $100 per barrel on May 22 for the first time since that date, as conflict escalated in the Persian Gulf region.
Tesla and Alphabet Report Earnings Disappointment
Tesla and Alphabet faced significant investor selling pressure on Thursday (23rd) after releasing quarterly earnings results. Tesla shares dropped 14.5%, while Alphabet fell 7.1%, marking the worst single-day declines for both companies in over a year. The broader 'Magnificent Seven' technology stocks experienced widespread pressure, with the group collectively losing $797 billion in market capitalization in a single trading session — the worst performance since equivalent tariffs were implemented in April of last year. SpaceX, the largest new stock listing, also hit a new low since its debut, though it rebounded to close higher by the end of trading. The stock has traded below its IPO price for six trading days.
Oil Prices Surpass $100 Per Barrel Amid Geopolitical Tensions
Brent crude oil exceeded $100 per barrel on May 22, marking the first time since that date, as military conflict reignited in the Persian Gulf region with signs of further escalation. US President Trump stated in an interview that he is "considering launching an unprecedented scale attack" on Iran. The rise in oil prices has led investors to increase expectations for tighter Federal Reserve monetary policy.
Federal Reserve Rate Hike Expectations Rise
According to FedWatch data, the probability of a rate hike at the late July meeting stands at 38%, significantly higher than approximately 12% one week prior. The likelihood of a 0.25 percentage point increase to the federal funds rate in mid-September has surged from 53% to 82% over the same period. Foreign investors purchased a net $120.8 billion in US stocks in May, substantially more than the $85.6 billion in April, representing the second-highest level on record after November 2024, according to the latest US Treasury International Capital (TIC) data.
Hang Seng Index Falls 247 Points on Friday
The Hang Seng Index opened 278 points lower on Friday and traded in a relatively narrow range between 25,031 points and 24,812 points throughout the session. The index closed down 247 points at 24,963, with trading volume falling below 300 billion HKD for two consecutive trading days. The index briefly fell below its 10-day moving average. The short-term market breadth ratio of stocks with 3-day moving averages above 18-day moving averages stood at 52.5%, remaining above the 50% threshold. The Nasdaq Composite formed a "death cross" on July 1 when its 10-day moving average fell below the 50-day moving average, after reaching a new peak on June 1 and subsequently declining more than 8%.
FAQ
What caused Hong Kong stocks to decline on Friday?
Hong Kong stocks fell 247 points to close at 24,963 on Friday, primarily driven by a sharp selloff in US technology stocks following disappointing quarterly earnings from Tesla and Alphabet on Thursday (23rd). The broader 'Magnificent Seven' tech giants lost $797 billion in combined market capitalization.
How much did Tesla and Alphabet stocks fall on Thursday (23rd)?
Tesla shares dropped 14.5% and Alphabet fell 7.1% on Thursday (23rd) after releasing quarterly earnings results. These declines represented the worst single-day performance for both companies in over a year.
