Gaotu Techedu Inc. (GOTU), a Chinese education technology company, saw its stock plummet 5.14% in Friday's pre-market trading, caught in a broader selloff affecting Chinese stocks. The decline comes as investors react to disappointing news from China's central bank and growing caution among analysts regarding the recent rally in Chinese equities.

The People's Bank of China (PBOC) held interest rates steady, contrary to some investors' expectations for further monetary easing. This decision appears to have triggered profit-taking across Chinese stocks, particularly in the tech and education sectors. 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. The stock's significant pre-market drop reflects the heightened sensitivity of Chinese ADRs to macroeconomic factors and regulatory concerns. Other Chinese ADRs also experienced declines, with companies like NIO, PDD Holdings, JD.com, and Alibaba all seeing drops in their stock prices. 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.