Hong Kong Stocks Face Sharp Selloff as US Jobs Data Triggers Global Rout, June 08

US employment data released on June 7 showed 172,000 new jobs added in May, far exceeding the 85,000 forecast. The strong reading crushed expectations for interest rate cuts and triggered a global market crash. Hong Kong’s Hang Seng Index fell 1.15% on June 7 and faces further losses on June 8 as investors sell tech and semiconductor stocks.

Why US Jobs Data Sparked the Crash

The US added 172,000 jobs in May, nearly double the expected 85,000, signaling a robust labor market. This strong data eliminated hopes for Federal Reserve rate cuts and pushed market expectations for a December rate hike above 80%. US Treasury yields surged, hitting high-growth tech and AI stocks hardest.

The Nasdaq fell over 1,100 points on June 7. Broadcom, a major AI chip maker, saw shares sold off after earnings disappointed relative to inflated expectations. Memory chip stocks also fell as analysts warned that DRAM and NAND prices are peaking.

Four Factors Crushing Hong Kong Markets

Chinatrust Securities identified four main drivers of the selloff. First, the strong US jobs report eliminated rate-cut bets. Second, Broadcom’s earnings triggered profit-taking across the chip sector. Third, analysts warned that memory chip prices are topping out, pressuring semiconductor stocks. Fourth, Iran tensions escalated with new military action, raising oil prices and inflation concerns.

The Hang Seng Index fell to 24,961.95 points on June 7, down 1.15%. Analysts at Chinatrust warned that the index could face a jump-down opening on June 8, with support at 24,200 points—a critical level since the Iran conflict began.

Technical Signals Point to Deeper Losses

Lawrence McMillan, a leading technical analyst, warned that the S&P 500 has entered extreme overbought territory after a two-month rally that was among the strongest since 1950. The index reached 7,520 points before reversing. McMillan flagged that market breadth is deteriorating—on June 3, stocks hitting 52-week lows nearly outnumbered those hitting 52-week highs by one stock.

With the S&P 500’s first support at 7,500 to 7,520 points already broken, the next level sits at 7,330 points. The 7,000-point level represents the strongest support for this bull market. McMillan advised investors to monitor key support levels closely and adjust holdings if technical signals turn negative.

What Hong Kong Investors Should Watch

Chinatrust Securities advised investors to prioritize cash flow safety and avoid averaging down during panic selling. The firm warned that margin calls and forced liquidations will likely accelerate losses in the short term. Investors should wait for panic to subside and look for signs of capitulation—such as heavy selling volume with long lower shadows or significant margin debt reduction—before re-entering.

The firm recommended focusing on stocks with strong fundamentals and avoiding speculative small-cap plays sensitive to interest rate changes. With SpaceX’s IPO reportedly excluding mainland Chinese and Hong Kong investors, and the China Securities Regulatory Commission cracking down on securities violations, Hong Kong’s short-term outlook remains pressured.

Final Thoughts

Hong Kong stocks face a sharp selloff on June 8 after US jobs data triggered a global market crash. With the Hang Seng at risk of breaking below 24,200 support and technical indicators flashing warning signs, investors should prioritize capital preservation over catching falling knives.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.