Hong Kong stocks advanced on Wednesday, as optimism over a potential Federal Reserve interest-rate cut lifted sentiment and outweighed renewed US-China trade tensions.

The Hang Seng Index rose 1.8%, while the Hang Seng Technology Index gained 2.6%.

In terms of star stocks, Laopu Gold rose 9%; Mixue rose 7%; Bilibili rose 5%; XPeng, Alibaba, Pop Mart, and SMIC rose 4%; Li Auto, BYD, and Baidu rose 3%; JD.com, Kuaishou, Xiaomi, Meituan, and NetEase rose 2%; NIO and Tencent rose 1%.

Powell signaled the US central bank is on track to deliver another quarter-point interest-rate cut later this month, even as a government shutdown significantly reduces its read on the economy.

Swap contracts are pricing in roughly 1.25 percentage points of rate cuts by the end of next year, from the current range of 4%-4.25%.

The Fed chair said that the economic outlook appeared unchanged since policymakers met in September, when they lowered interest rates and projected two more cuts this year. Fed Boston President Susan Collins said the US central bank should continue lowering rates this year to support the labor market.

Earlier, US Trade Representative Jamieson Greer predicted that heightened tensions with China over export controls would ease, following talks between representatives of the two countries. That followed the Asian nation’s sanctioning of US units of a South Korean shipping giant, escalating a dispute over maritime dominance.

Trump, too, sounded cautiously optimistic a positive outcome could be reached.

「We have a fair relationship with China, and I think it’ll be fine. And if it’s not, that’s OK too,」 Trump told reporters Tuesday at the White House. 「We have a lot of punches being thrown, and we’ve been very successful.」