Chinese Stocks Plunge 2.69% on U.S. Economic Data, Powell's Remarks

In the late hours of Thursday, U.S. trading time, Chinese stocks listed in the United States experienced a significant decline. The Nasdaq Golden Dragon China Index, which tracks the performance of Chinese companies listed on U.S. exchanges, saw its losses widen to 2.69%, settling at 7,327.73 points. Leading the downturn were Alibaba, which fell nearly 8%, followed by Kuaishou Technology with a 7% drop, and JD.com, which declined by 4.5%.

The sell-off came as the U.S. released a series of key economic data points, which likely influenced investor sentiment towards these stocks. The Producer Price Index (PPI) for April showed a year-over-year increase of 2.4%, slightly below the expected 2.5%. The core PPI, which excludes food and energy, rose 3.1% year-over-year, in line with expectations. Additionally, the number of initial jobless claims for the week ending May 10 remained steady at 229,000, matching the previous week's revised figure.

Federal Reserve Chairman Jerome Powell, speaking at the second annual Thomas Laubach Research Conference, highlighted the challenges posed by potential future inflation volatility and the increasing frequency and duration of supply shocks. Powell noted that the Federal Reserve is reviewing its strategic framework based on the past five years' experiences and aims to improve its communication tools for predicting uncertainty and risk. The committee is currently discussing lessons learned and plans to finalize specific modifications to the consensus statement in the coming months.

The decline in Chinese stocks was part of a broader market movement, as U.S. markets also experienced a downturn. The Dow Jones Industrial Average fell by 0.02%, the Nasdaq Composite Index declined by 0.48%, and the S&P 500 Index dropped by 0.08%. The broader market sentiment, influenced by the release of U.S. economic data, likely contributed to the sell-off in Chinese stocks. Investors may have sought to reduce their exposure to riskier assets in response to the economic indicators and Powell's remarks.