U.S. equity futures pared earlier gains rapidly during Tuesday’s evening session, with tech-heavy Nasdaq futures underperforming as Chinese ADRs led the decline. Tuya Smart (TUYA) dropped over 4%, while Kingsoft Cloud (KC) fell nearly 3%, and both Bawang Tea Girl and Bilibili (BILI) lost more than 2% in after-hours trading.
The reversal followed a mixed regular session on Wall Street, where major indices had closed slightly higher despite fading early momentum. The sudden weakness in Chinese tech names reflects renewed concerns about U.S.-China tech tensions and potential regulatory hurdles, with investors showing particular caution toward cloud computing and internet platform stocks.
Sector rotation appears underway as traders reposition ahead of Wednesday’s CPI data, with high-beta Chinese tech stocks serving as proxies for risk appetite. The ADR declines come despite a relatively stable yuan, suggesting company-specific factors may be driving the underperformance in names like Tuya and Kingsoft Cloud. Market participants are closely watching whether this after-hours weakness will spill over into Wednesday’s regular trading session.
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