Gaotu Techedu Inc. (GOTU), a Chinese education technology company, saw its stock plummet 5.14% in pre-market trading on Friday. The significant drop comes as part of a broader selloff affecting Chinese stocks, particularly in the tech and education sectors, as investors react to disappointing economic news and growing caution among analysts.

The decline in Gaotu Techedu's stock can be attributed to several factors affecting the Chinese market as a whole. The People's Bank of China (PBOC) recently held interest rates steady, contrary to some investors' expectations for further monetary easing. This decision appears to have triggered profit-taking across Chinese stocks, with education technology companies like Gaotu Techedu being particularly vulnerable.

Adding to the market pressure, Bank of America analysts issued a cautionary note suggesting that a correction might be on the horizon for Chinese stocks. They drew parallels between the current market conditions and the volatile period in 2015, further fueling investor concerns. While Gaotu Techedu was not specifically mentioned in the broader market commentary, as a Chinese tech-focused company in the education sector, it has been swept up in the general market sentiment. Investors in Gaotu Techedu and similar Chinese stocks may need to brace for continued volatility as the market digests these developments and awaits further clarity on China's economic policies and stimulus measures.