The Hang Seng Index retreated by over 1.5% on Friday, erasing some of the gains made earlier this month. It dropped to a low of H$23,220, down from this month’s high of H$23,927. It has also fallen by 6.65% from its highest point this year. 

Why the Hang Seng Index fell

The Hang Seng Index, which tracks the biggest Hong Kong companies, came under pressure as concerns about trade continued. 

This sell-off happened after a US court allowed Donald Trump’s tariffs to continue for now, reversing another decision that ended.

The sell-off then accelerated after Scott Bessent warned that talks between the United States and China had stalled. He said that there was no progress being made since the meeting in Switzerland that lowered their tariffs.

In a statement, Bessent said that the next phase will require the input of Donald Trump and Xi Jinping because of the complexities involved. He said:

“I think that given the magnitude of the talks, given the complexity, that this is going to require both leaders to weigh in with each other.”

There are concerns that Washington has taken unilateral measures that don’t advance the relationship between the two countries. 

For example, the administration is considering putting limits on the number of Chinese students in US universities. Such a move would mark an escalation since there are thousands of them in the country.

Trade concerns have continued

The US has also put limits on the sale of chips to China, a move that is costing American companies billions of dollars. In a statement this week, NVIDIA put the amount at about $8 billion, with the management arguing that China would move on without the US.

The US has also limited the sale of chip design software to China and some jet engine parts to Chna. Also, the US is working to limit the sale of Huawei chips anywhere in the world, a move that Beijing has condemned.

The Hang Seng Index is made up of many companies that have an exposure to mainland China. As a result, as the trade war escalates, analysts believe that many of these firms will be impacted.

Most Hang Seng Index companies tumbled on Friday, with Orient Overseas falling by 7.25% and Sunny Optical dropping by 5.5%%. The other top laggards were BYD, Lenovo, Anta Sports, Alibaba, and NetEase. 

On the other hand, some of the top gainers in the index were CSPC Pharmaceuticals, Li Auto, Power Assets Holdings, and China Resources Power.

However, as we have written before here, many companies in the Hang Seng Index are not highly impacted by the US trade war. That’s because many of them don’t do a lot of business in the US. For example, BYD has become a giant auto company by focusing on mainland China and other countries.

Hang Seng Index technical analysis

The daily chart shows that the Hang Seng Index has rebounded from a low of H$14,740 in 2024 to a high of H$24,855 this year. It has now pulled back and remained above the 23.6% Fibonacci Retracement level. 

The Hang Seng has remained above the 50-day moving average and formed a bullish consolidation pattern. Therefore, the most likely forecast is bullish, with the next point to watch being the psychological point at H$24,000. A move above that level will point to more gains, potentially to H$24,855. 

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Nike Inc (NYSE: NKE) has been one big disappointment after another in recent years – and Josh Brown, a renowned investor and chief executive of Ritholtz has even lost conviction in its ability to recover.

The sportswear and performance brand is scheduled to report its financials for the fourth quarter in the final week of June.

Consensus is for it to earn just 11 cents on a per-share basis versus $1.01 a year ago.

Ahead of the earnings release, Nike stock is down nearly 25% versus its year-to-date high.

Why is Nike losing share to its competitors?

Nike’s chief executive Elliott Hill has been working on rebuilding ties with wholesale partners this year as part of his broader efforts aimed at reinvigorating growth at the footwear giant.

In March, he even told investors that “I’m proud of the progress we have made” on the turnaround plan. However, Josh Brown is not buying any of it.

According to the globally followed investor, none of what Nike has done so far suggests it’s headed for a successful turnaround.

Nike stock remains in shambles as the company’s celebrity representatives age out of popularity, he argued in a CNBC interview, adding “LeBron James is in his 40s – and Michael Jordan is about 30 years retired.”

Nike stock needs more than classic sneakers to run

Investors should note that Nike managed to come in ahead of Street estimates in its latest reported quarter. But that strength failed to breathe new life into its stock price.

“I don’t even know what we do with something like Nike stock here. It’s just a falling knife,” the chief executive of Ritholtz added in the said interview.

All in all, Brown is convinced that classic sneakers like Jordans or Air Force 1 will no longer prove sufficient for NKE to address competition that’s only getting fiercer by the minute.

That said, Nike shares do currently pay a dividend yield of 2.61% that makes them a little bit more attractive to own in 2025.

Should you buy NKE shares at the current discount?

Investors should note that Nike stands to take a material hit due to higher tariffs under the Trump administration as well.

In fact, it recently announced plans of raising prices, which may prove detrimental for a business that’s already grappling with a sales decline. NKE’s topline contracted another 9% in its fiscal Q3.

Still, Wall Street analysts haven’t thrown in the towel on Nike stock just yet.

Consensus rating on the company based out of Beaverton, Oregon remains at “overweight” with the mean target of about $73 indicating potential upside of about 20% from current levels.

Nike shares are currently trading at a discount price-to-earnings multiple relative to its historical average over the past five years.  

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European stock markets commenced Friday’s trading session with a slight downturn, as a renewed wave of caution swept through investor sentiment following a US court’s decision to temporarily reinstate President Donald Trump’s widespread tariffs.

Despite this immediate pressure, the benchmark pan-European index remained on track for a robust monthly gain.

As of 0711 GMT, the continent-wide STOXX 600 index was down 0.1%.

This dip was primarily attributed to the temporary reinstatement of the most sweeping of President Trump’s tariffs, a development that occurred just a day after a different US court had ordered an immediate block on them.

This legal seesaw has reintroduced a significant element of uncertainty into the global trade landscape.

However, looking at the broader monthly picture, the benchmark STOXX 600 was still poised for its first monthly advance in three months, having gained 3.8% so far.

This resilience has been built on a period of easing trade tensions earlier in the month and recent US fiscal concerns, which had prompted some investors to diversify away from American assets.

Economic data and sectoral moves in focus

On the economic data front, figures released on Friday showed that German retail sales fell by 1.1% in April compared with the previous month, indicating some weakness in Europe’s largest economy.

Investors are also keenly awaiting Germany’s May inflation figures, due later in the day, as these could provide crucial clues regarding the European Central Bank’s upcoming policy decision next week.

Sectoral performance was mixed in early trading. Basic resources stocks were the biggest drag on the STOXX 600, falling 0.9%, largely due to lower copper prices.

Conversely, the real estate sector offered some support to the main index, rising by 0.8%.

In corporate news, British insurer and asset manager M&G saw its shares jump by an impressive 8.2%.

This surge followed the announcement that Japanese life insurer Dai-Ichi Life Holdings will acquire a 15% stake in M&G as part of a strategic deal, signaling confidence in the UK-based firm.

US markets absorb fresh tariff uncertainty

The renewed uncertainty surrounding US tariffs also cast a shadow over Wall Street. US stock futures edged lower as markets digested the implications of a federal appeals court decision on Thursday to temporarily pause a trade court ruling that had, just the day before, blocked many of President Trump’s tariffs as illegal.

This pause grants the appeals court time to consider the case, with the Trump administration required to file its briefings by June 9.

Futures attached to the Dow Jones Industrial Average slipped 0.1%, while futures for the benchmark S&P 500 fell 0.2%. Futures linked to the tech-heavy Nasdaq 100 dropped 0.3%.

The White House has indicated its preparedness to take the tariff dispute to the Supreme Court if necessary.

In the interim, it is reportedly exploring alternative methods to implement President Trump’s tariffs without relying on emergency powers, the use of which was central to the initial court’s decision to block them.

Later on Friday, Wall Street’s attention will shift to the April reading of the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index.

Market participants will be highly focused on any indications that tariffs might be putting upward pressure on inflation, although many analysts do not expect the levies to significantly impact the data until the following month.

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Elon Musk is diving back into his companies, declaring a renewed, round-the-clock focus on Tesla, SpaceX and his AI venture xAI, just as each prepares for high-stakes moves that could shape their futures.

On Wednesday evening, Musk announced he was stepping away from his role at the Department of Government Efficiency (DOGE), a four-month initiative aimed at cutting federal spending by up to $2 trillion—a target that has so far seen only modest progress.

“Back to spending 24/7 at work and sleeping in conference/server/factory rooms,” the billionaire wrote on X last Saturday.

The pivot comes at a time of mounting operational and reputational challenges for Musk’s empire.

While some conservative policymakers continue to view Musk’s involvement as a symbolic victory for budget hawks, others in the business world, including Musk, have acknowledged that his political engagements have hurt his businesses.

From Tesla’s sliding sales to SpaceX’s Mars ambitions and the AI arms race heating up against OpenAI and others, the workload is immense — and the stakes are higher than ever.

At Tesla, Robotaxi launch, falling Europe sales a priority

At Tesla, Musk’s renewed involvement comes as the company nears the launch of its long-promised robotaxi service in Austin, Texas.

The service is expected to debut next month, and Musk recently highlighted road tests of self-driving Model Y vehicles operating without anyone in the driver’s seat, stating there had been “no incidents.”

Tesla is betting heavily on autonomy to counteract falling sales and eroding market share.

In the US and Europe, Tesla deliveries have slumped in recent months, with European sales declining for a fourth straight month in April.

For the first time, Chinese rival BYD overtook Tesla in sales.

While Tesla remains the largest EV maker in the US, investor confidence has wavered, not least because of Musk’s increasingly political profile.

His role in the DOGE, and $300 million in Republican campaign donations have fuelled buyer backlash and added volatility to Tesla’s stock.

During Musk’s absence this spring, the Tesla board reportedly initiated informal talks with executive search firms to plan for potential CEO succession, though the company has denied any formal search process.

Tesla chair Robyn Denholm said the board remains confident in Musk’s leadership and emphasized a renewed focus on the company’s “exciting growth plan.”

Investors have reacted positively to Musk’s return.

Tesla’s market capitalization, which had plummeted after Trump’s election and Musk’s increasing political involvement, has rebounded above $1 trillion on the news.

SpaceX pursues Mars as setbacks mount

Musk’s other major undertaking, SpaceX, is trying to prepare for what could be its most ambitious mission yet: a Mars-bound test of its Starship spacecraft in 2026.

That year presents a rare orbital opportunity, when Earth and Mars will be at their closest.

But serious technical challenges persist.

Earlier this year, two Starship prototypes exploded in flight.

The most recent test flight failed to deliver on a critical objective: testing the spacecraft’s heat-protective tiles during atmospheric reentry.

SpaceX lost contact with the vehicle before the tile system could be assessed.

Despite setbacks, SpaceX retains strong government ties.

Its partially reusable Falcon rockets continue to carry out missions for NASA and the Pentagon.

On Friday, SpaceX is scheduled to launch a GPS satellite for the US military.

The company’s Starlink satellite internet network, with over 7,500 satellites in orbit, has become another vital business line — one that has earned it increasing favour from US intelligence agencies.

Intense rivalry between xAI and OpenAI another frontier

Musk’s attention is also shifting toward artificial intelligence, a field he has long warned could pose existential risks.

His AI startup, xAI, recently merged with X (formerly Twitter) in a bid to pool resources and accelerate the development of artificial general intelligence — what he calls “digital superintelligence.”

The combined entity has introduced Grok, a chatbot that Musk claims will surpass competitors.

The company is working on high-profile partnerships to extend Grok’s reach, including a potential collaboration with Microsoft.

However, efforts to secure a place in a major Middle East AI deal were unsuccessful, The Wall Street Journal reported.

Musk’s return to xAI signals a sharpening rivalry with former partners at OpenAI, which he co-founded but later criticized for being too aligned with corporate interests.

Neuralink and Boring Company progress slowly

Beyond Musk’s primary focus areas, his other ventures are making slow but notable progress.

Neuralink, now led by Shivon Zilis, is entering a new phase of clinical testing in the Middle East aimed at patients with motor and speech impairments.

The brain-implant startup has already implanted chips in at least three paralyzed patients who can now interact with computers using their thoughts alone.

Meanwhile, The Boring Company, under longtime Musk deputy Steve Davis, is working on a proposed 68-mile tunnel system in Las Vegas.

While the company has been unable to break ground on major projects elsewhere, the Las Vegas system is gradually expanding.

Davis, like Musk, also stepped down from DOGE this week.

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The Upwork stock price has pulled back in the past few days as investors assessed its growth trajectory. UPWK dropped to a low of $15.6 on Thursday, its lowest level since May 6, and 13% below its highest point this year. So, is this freelancer marketplace a good investment today?

Upwork’s business is doing well, but challenges remain

Upwork is one of the biggest players in the freelancer industry. It operates as a marketplace where companies post jobs and attract talent from around the world. 

Upwork makes money in several ways. It sells connects, which freelancers require when applying for jobs. It also has a subscription solution that gives freelancers more perks.

The company has introduced advertising, which lets freelancers boost their chances for getting clients. Other adverts are featured jobs and boosted profiles.

It also charges clients some money when they list their jobs to the marketplace. Also, the company takes a cut in cash processing fees.

Upwork’s business continues to gain traction among companies and freelancers in the past few years as the concept of remote work has gained steam. Many companies, especially small and medium-sized ones use it to attract talent and save money.

As a result, Upwork’s revenues have soared in the past few years, with the annual figure moving from $373 million in 2020 to $771 million in the last twelve months.

This revenue has increased as more companies and freelancers have joined the platform in the past few years. It has also jumped because of its regular price increases, which have continued to irk freelancers. 

Upwork’s business model has a fatal flaw that affects its revenue and profitability. In an ideal situation, Upwork should make money as long as a project goes on. It has implemented tools to ensure that this happens over time.

However, the reality is that many freelancers take the relationship away from Upwork and are paid directly. By doing this, Upwork misses the revenue that comes with that revenue stream.

Upwork has worked to prevent this from happening, but it is extremely difficult since freelancers and clients always communicate away from its platform. This factor explains why its revenue growth has stalled in the past few years.

UPWK revenue and profitability growth

The most recent results showed that Upwork’s business is doing relatively well, especially in terms of profitability. Its revenues rose by just 1% in the last quarter to $192.7 million, while its gross margin rose by 145 basis points to 78%.

Upwork’s adjusted EBITDA rose to $56 million, while the free cash flow rose to $30.8 million. These are strong numbers for a company that turned profitable a few years ago.

Analysts anticipate that the revenue slowdown will continue for a while. The average revenue estimate is $187.5 million, dowm by 2.8% from the same period last year. 

They expect the annual revenue to drop by 1.8% this year to $755 million, followed by a rebound to $800 million. 

Upwork stock price analysis

The daily chart shows that the UPWK share price remains under pressure this month. It initially jumped to over $17 after its recent earnings release and then pulled back to the current $15.60. 

The stock has formed a triple-top pattern at around $18 and the neckline at $11.15. A triple-top pattern is a sign that bulls are afraid of placing bids above the price. Therefore, there is a likelihood that the UPWK share price will continue falling as sellers target the neckline at $11.15

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