Alibaba's stock (BABA-W) plummeted 5.17% in early trading on Wednesday, as Hong Kong's stock market opened lower amid concerns over escalating trade tensions between the United States and China. The sharp decline came after the US announced that 104% duties on imports from China would take effect shortly after midnight, despite the Trump administration's efforts to start talks with other trading partners.

The broader market sentiment was decidedly negative, with the Hang Seng Index falling 3.1% and the Hang Seng Tech Index declining 4.3%. Alibaba's drop was in line with other major Chinese tech stocks, as XPeng and JD.com also fell 5%, while Tencent and Xiaomi saw 3% declines. The new tariffs have reignited fears of a trade war, potentially impacting Chinese companies' ability to do business with US partners and affecting their overall growth prospects.

This downturn follows a challenging session in US markets on Tuesday, where Alibaba's ADR had already slipped 6.24% to $99.37. The continued selling pressure across both US and Hong Kong markets underscores investors' growing concerns about the impact of trade tensions on Chinese tech giants. As one of China's largest e-commerce and cloud computing companies, Alibaba's stock performance is often seen as a bellwether for the broader Chinese tech sector, making its significant drop particularly noteworthy for market observers.