On April 4th, in response to the "reciprocal tariff" policy announced by the US government, China promptly took a series of countermeasures. The Tariff Commission of the State Council announced that starting from 12:01 on April 10th, an additional 34% tariff will be imposed on imported goods originating from the United States on the basis of the current applicable tariff rates. At the same time, the Ministry of Commerce and the General Administration of Customs implemented export controls on some medium and heavy rare earth-related items. These measures have attracted high attention from the global market and quickly had a significant impact on the financial markets.

The US stock market plunged, and market confidence was hit

After China's countermeasures were announced, the US stock market reacted quickly. On April 4th, the three major US stock indexes closed sharply lower. The S&P 500 index fell 5.97% to 5074.08 points, recording its largest single-day decline since March 2020; the Nasdaq index fell 5.82% to 15587.79 points, dropping by more than 20% from its highest closing record in history, confirming its entry into a technical bear market range; the Dow Jones Industrial Average fell 2231.07 points, or 5.50%, to 38314.86 points. Large technology stocks all declined. The stock prices of companies such as Apple, Tesla, and NVIDIA all dropped significantly. Popular Chinese concept stocks were also not spared. The Nasdaq Golden Dragon China Index closed down 8.87%

The Hong Kong stock market was closed, and southbound funds flowed in significantly

Compared with the sharp fluctuations in the US stock market, the Hong Kong stock market was closed on April 4th due to the Qingming Festival holiday. Previously, the three major Hong Kong stock indexes performed weakly on April 3rd. The Hang Seng Index fell 1.52% to 22849.81 points; the Hang Seng Tech Index fell 2.09% to 5313.26 points; and the Hang Seng China Enterprises Index fell 1.31% to 8420.14 points. Although the overall market was declining, southbound funds showed a strong inflow trend. According to Wind data, southbound funds accumulated a net purchase of HK$63.285 billion in the four trading days of last week, increasing by about 70% compared with the previous week. Among them, the net purchase on April 3rd alone was nearly HK$28.8 billion, setting the second-highest record in history.