Gaotu Techedu Inc. (NYSE: GOTU) saw its stock plummet 13.01% in pre-market trading on Monday, as Chinese ADRs and ETFs faced a significant selloff amid escalating trade tensions between the United States and China. The education technology company's sharp decline reflects a broader market trend affecting Chinese stocks listed on U.S. exchanges.
The selloff was triggered by China's retaliatory measures against U.S. tariffs, with Beijing announcing its own trade levies on U.S. imports. This tit-for-tat escalation has heightened fears of a widening trade war, potentially leading to a deep recession. The intensifying dispute between the world's two largest economies is threatening to disrupt global trade flows and is expected to slow down demand, particularly impacting Chinese companies.
While Gaotu Techedu was not specifically mentioned in recent news, the company's stock appears to be caught in the crossfire of broader market sentiments. Other Chinese ADRs and ETFs also experienced significant drops, with some falling by double-digit percentages. As investors grapple with the potential economic fallout from the trade war, they will be closely watching for any signs of de-escalation or supportive measures from the Chinese government to shore up the domestic economy and protect exporters.
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