Before the May Day holiday, the Hang Seng Index fell by 335 points as the Fed's hawkish tone rattled investors; short-term bearish sentiment on the Nasdaq could focus on the Southern Two-Times Short Nasdaq ETF.

The Federal Reserve kept interest rates unchanged as expected, but its statement contained hidden hawkish signals. Three Fed presidents publicly opposed including a dovish signal in the statement. Moreover, Powell broke tradition by choosing to remain a governor after his term ends, which the market interpreted as a challenge to incoming Chair Warsh. The path to interest rate cuts by the Fed seems fraught with difficulties. Additionally, Trump reportedly ordered an extension of the blockade on Iranian ports until Iran clearly abandons nuclear weapons. With the situation in the Middle East remaining deadlocked, high oil prices have fueled inflation concerns, causing global stock markets to weaken across the board. The Hang Seng Index opened 103 points lower and continued to decline, falling as much as 377 points to reach a low of 25,734, breaking below the 26,000-point level. Losses narrowed slightly towards the close, ending the day at 25,776 points, down 335 points or 1.28%, with turnover at HKD 291.5 billion. The Hang Seng Tech Index closed at 4,871 points, down 38 points or 0.79%. The China Enterprises Index ended at 8,681 points, down 123 points or 1.41%. Of the 90 blue-chip stocks, only 18 rose while 70 fell. Southbound capital showed no fear of the upcoming long May Day holiday, net inflow for the day was RMB 12.193 billion. The Shanghai and Shenzhen markets will be closed for five days until resuming trading on Wednesday (6th).

Chip stocks became the only bright spot in today’s market, rising against the trend. Yesterday, Huahong Semiconductor fell due to news of U.S. supply restrictions. Today, both Morgan Stanley and CLSA published research reports stating that the incident had little impact on Huahong, quickly reversing sentiment in the sector. Huahong Semiconductor ($HUA HONG SEMI (01347.HK)$) rose by CNY 6 or 5.55%, closing at CNY 114.1, fully recovering yesterday’s losses. SMIC ($SMIC (00981.HK)$) rose by CNY 5.1 or 7.75%, closing at CNY 70.9, making it the best-performing blue chip of the day. Domestic AI chip company Cambricon reported a 185% year-on-year increase in Q1 net profit, hitting the daily limit and reaching a new all-time high. Domestic GPU stocks also surged significantly. Tianzhou Zhipu ($ILUVATAR COREX (09903.HK)$) soared by CNY 81.8 or 21.3%, closing at CNY 465.8. Biren Technology ($BIREN TECH (06082.HK)$ ) rose by 3.54 yuan or 8.22%, closing at 46.6 yuan; in the AI sector, Zhipu ($KNOWLEDGE ATLAS (02513.HK)$ ) disclosed a technical breakthrough with the GLM-5 model, its share price increased by 51.5 yuan or 6.31%, closing at 868 yuan; MINIMAX ($MINIMAX-W (00100.HK)$ ) rose by 5 yuan or 0.7%, closing at 713 yuan; XunCe ($XUNCE (03317.HK)$ ) fell by 11.2 yuan or 4.24%, closing at 252.8 yuan.

Earnings stocks showed polarized performance today. Standard Chartered Group ($STANCHART (02888.HK)$ ) reported Q1 pre-tax profit of $2.45 billion, increasing 16.5% YoY, surpassing market expectations; its share price rose against the trend by 3.6 yuan or 1.92%, closing at 190.8 yuan, marking the fourth consecutive day of gains; China Life ($CHINA LIFE (02628.HK)$ ) saw its Q1 net profit fall by 32.3%, but new business value grew strongly; analysts from Credit Suisse, Morgan Stanley, and J.P. Morgan all noted that the performance largely met expectations, with the stock rising by 1.22 yuan or 4.45%, closing at 28.62 yuan; Innovent Bio ($INNOVENT BIO (01801.HK)$ ) reported Q1 product revenue exceeding 3.8 billion yuan, increasing over 50% YoY, with its share price rising by 5.1 yuan or 6.01%, closing at 90 yuan; AIA ($AIA (01299.HK)$ ) reported Q1 new business value of $1.757 billion, increasing 13% YoY, surpassing market expectations; its share price slightly rose by 0.1 yuan or 0.12%, closing at 85.05 yuan; PetroChina ($PETROCHINA (00857.HK)$ ) reported a 1.9% YoY increase in last quarter's profit, with its share price rising by 0.05 yuan or 0.42%, closing at 12.03 yuan, hitting another all-time high. As for other consumer stocks, Mengniu Dairy ($MENGNIU DAIRY (02319.HK)$ ) rose by 0.65 yuan or 3.89%, closing at 17.35 yuan; China Resources Beer ($CHINA RES BEER (00291.HK)$ ) rose by 0.66 yuan or 2.52%, closing at 26.84 yuan; Midea Group ($MIDEA GROUP (00300.HK)$ ) rose by 0.555 yuan or 0.62%, closing at 89.7 yuan.

In contrast, stocks under pressure due to earnings or news include Yangtze Optical Fibre ($YOFC (06869.HK)$ ), whose Q1 net profit surged nearly 2.3 times but fell short of market expectations; the stock plunged 31.8 yuan or 13.78% post-results, closing at 199 yuan and breaking below the 200-yuan mark; Tingyi Holdings ($TINGYI (00322.HK)$ ) dropped by 0.62 yuan or 4.89%, closing at 12.05 yuan; WH Group ($WH GROUP (00288.HK)$ ) fell by 0.44 yuan or 4.42%, closing at 9.52 yuan; Tianneng Power ($TIANNENG POWER (00819.HK)$ ) reported an 82% drop in its subsidiary’s Q1 profit; the stock plummeted 2.15 yuan or 27.25%, closing at 5.74 yuan; Laopu Gold ($LAOPU GOLD (06181.HK)$ ) fell by 19 yuan or 3.33%, closing at 552 yuan; BeiGene ($BEONE MEDICINES (06160.HK)$ ) dropped by 5.6 yuan or 3.13%, closing at 173.6 yuan; PICC Property ($PICC P&C (02328.HK)$ dropped by 0.45 yuan or 3.11%, closing at 14.01 yuan.

Banking stocks were sold off today after their earnings report. CCB ($CCB (00939.HK)$ ) saw a 3.5% increase in Q1 net profit, but its share price still fell by 0.21 yuan or 2.34%, closing at 8.78 yuan; BOCOM ($BANKCOMM (03328.HK)$ ) reported a 3.1% rise in Q1 net profit, with its share price falling by 0.2 yuan or 2.72%, closing at 7.15 yuan; ICBC ($ICBC (01398.HK)$ ) had a 3.3% increase in Q1 net profit, with the stock dropping by 0.19 yuan or 2.63%, closing at 7.03 yuan; BOC ($BANK OF CHINA (03988.HK)$ ) saw a 4.2% growth in Q1 net profit, with its share price declining by 0.12 yuan or 2.32%, closing at 5.06 yuan; ABC ($ABC (01288.HK)$ ) posted a 4.5% rise in Q1 net profit, with its stock down by 0.09 yuan or 1.46%, closing at 6.08 yuan.

Tech stocks generally weighed on the broader market today. Alibaba ($BABA-W (09988.HK)$ ) fell by 4.6 yuan or 3.52%, closing at 126 yuan; Tencent (0700) dropped by 11.4 yuan or 2.38%, closing at 467.8 yuan; Xiaomi ($XIAOMI-W (01810.HK)$ ) declined by 1.12 yuan or 3.72%, closing at 29.02 yuan; Kuaishou ($KUAISHOU-W (01024.HK)$ ) dropped by 0.62 yuan or 1.43%, closing at 42.9 yuan; JD.com ($JD-SW (09618.HK)$ ) fell by 1.2 yuan or 1.02%, closing at 116.3 yuan; Baidu ($BIDU-SW (09888.HK)$ ) dropped by 1.2 yuan or 1.01%, closing at 118.7 yuan; Meituan ($MEITUAN-W (03690.HK)$ ) slightly increased by 0.1 yuan or 0.12%, closing at 83.25 yuan; NetEase ($NTES-S (09999.HK)$ ) rose by 4 yuan or 2.3%, closing at 179.8 yuan.

Auto stocks fell across the board. The China Passenger Car Association predicted that the global market share of Chinese-funded cars this year would drop to 31.5%, down 4 percentage points year-on-year, weighing on the sector's sentiment. BYD ($BYD COMPANY (01211.HK)$ ) plunged by 5.8 yuan or 5.36%, closing at 102.5 yuan, making it the worst-performing blue-chip stock of the day; Nio ($NIO-SW (09866.HK)$ ) fell by 3.3 yuan or 6.29%, closing at 49.2 yuan; GAC Group ($GAC GROUP (02238.HK)$ ) dropped by 0.15 yuan or 5.1%, closing at 2.82 yuan; Chery Automobile ($CHERY AUTO (09973.HK)$ ) fell by 1.48 yuan or 4.9%, closing at 28.82 yuan; Li Auto ($LI AUTO-W (02015.HK)$ XPeng Motors fell by 1.7 yuan or 2.46%, closing at 67.55 yuan;$XPENG-W (09868.HK)$ Geely Auto fell by 1.5 yuan or 2.4%, closing at 61 yuan;$GEELY AUTO (00175.HK)$ It rose by 0.56 yuan or 2.51%, closing at 22.9 yuan, performing well against the market trend.

Property stocks were weighed down by weakened rate cut expectations. Sun Hung Kai Properties$SHK PPT (00016.HK)$ fell by 4.2 yuan or 3%, closing at 135.8 yuan; Cheung Kong Property (1113) fell by 0.52 yuan or 1.05%, closing at 48.86 yuan; New World Development$NEW WORLD DEV (00017.HK)$ fell by 0.08 yuan or 0.93%, closing at 8.52 yuan; China Overseas Land & Investment$CHINA OVERSEAS (00688.HK)$ reported a 27.5% drop in operating profit for the first quarter, falling by 0.07 yuan or 0.52%, closing at 13.28 yuan. In terms of other individual stocks, HSBC$HSBC HOLDINGS (00005.HK)$ fell by 0.8 yuan or 0.57%, closing at 140.2 yuan; Hong Kong Exchanges and Clearing$HKEX (00388.HK)$ fell by 7.4 yuan or 1.76%, closing at 412.4 yuan; China Hongqiao$CHINAHONGQIAO (01378.HK)$ fell by 1.6 yuan or 4.67%, closing at 32.68 yuan; Luoyang Molybdenum$CMOC (03993.HK)$ ) fell by 0.67 yuan or 3.67%, closing at 17.6 yuan; Zijin Mining ($ZIJIN MINING (02899.HK)$ ) fell by 0.78 yuan or 2.14%, closing at 35.68 yuan; CATL ($CATL (03750.HK)$ ) fell by 19.5 yuan or 3.11%, closing at 608 yuan.

On the external front, the US Nasdaq Composite Index closed at 24,673 points on April 29, slightly up by 9 points or 0.04%. The market is focused on the release of earnings reports from the "Magnificent Seven" companies, including Alphabet, Amazon, Meta, and Microsoft, along with recent divergence in AI-related stocks. Some tech stocks declined due to concerns over AI growth, coupled with movements in Fed policy. Amid these intertwined factors, the index consolidated narrowly at high levels. For investors who are bearish in the short term or looking to hedge against downside risks in the Nasdaq, especially within the tech sector, they may consider the Southern Nasdaq Two-Times Inverse ETF ($CSOP NASDAQ-100 Index Daily (-2x) Inverse Product (07568.HK)$ ). Recently, its share price has been fluctuating between HK$2.75 and HK$2.85, closing today at HK$2.79, with an annual management fee of 1.5%. It is important to note that holding this ETF long-term may lead to deviations from its target due to compounding effects and volatility drag. Moreover, leverage can amplify losses. Therefore, it is not recommended for long-term investors but is suitable as a hedging or speculative tool for experienced investors with a short-term bearish view on the Nasdaq.

881K Views