Hong Kong’s Hang Seng Index surged over 2%, continuing its recent momentum driven by a rush to buy undervalued tech stocks linked to the rise of Chinese AI firm DeepSeek. Investor confidence was further boosted by Beijing’s supportive stance towards the sector after years of regulatory crackdowns. Alibaba led the gains with a 5% jump, while JD.com climbed 7%, Tencent rose over 2%, and Netease added 3.6%. 

Investors returned to these stocks after initially selling off in response to former US President Donald Trump’s weekend memo, which outlined plans to limit Chinese investments in key sectors such as technology, infrastructure, healthcare, and energy. The White House emphasized that the move aimed to protect national security while still encouraging foreign investment in the US. 

Other regional markets also saw gains, including Shanghai, Seoul, Wellington, Manila, and Jakarta. However, Sydney, Singapore, and Taipei declined. Tokyo struggled due to a stronger yen, fueled by expectations that the Bank of Japan would continue raising interest rates, while speculation about US rate cuts provided further support for the currency. 

US rate-cut expectations were reinforced by a Conference Board survey showing the biggest drop in consumer confidence since August 2021. Recent weak economic reports on services, employment, and inflation have added to concerns about slowing growth. 

Wall Street’s performance remained mixed, with the Dow rising while the S&P 500 and Nasdaq fell, as concerns grew over high valuations and the rising costs of AI investments. Investors now await Nvidia’s earnings, which could provide key insights into the AI chip market.