Hang Seng climbs by 2% at finish

The Hang Seng soared 488 points, or 2.1%, to close at 24,177 on Tuesday, marking its third consecutive session of gains and reaching a two-week high as optimism swept across all sectors.

The rally was fueled by a strong rebound in U.S. futures following President Trump’s announcement of a diplomatic breakthrough: a truce between Iran and Israel, with a “complete and total ceasefire” expected to be implemented gradually over the next 24 hours. This unexpected easing of geopolitical tensions injected a wave of relief into global markets, reducing risk aversion and encouraging risk-on sentiment.

On the monetary policy front, dovish signals from the Federal Reserve added further support. Fed Vice Chair Michelle Bowman noted that the time to begin cutting interest rates was drawing closer, emphasizing emerging risks to the labor market and hinting that policy easing could soon be warranted. Her remarks closely mirrored comments made last Friday by Fed Governor Christopher Waller, reinforcing market expectations of a possible rate cut at the upcoming July 29–30 FOMC meeting. All eyes are now on Fed Chair Jerome Powell, whose testimony before Congress later today could provide further clarity on the central bank’s direction.

In Asia, the bullish mood extended beyond Hong Kong. Chinese equities climbed to a three-month high, driven by broad-based gains across regional markets. A stronger yuan, which appreciated to a near two-week high against the U.S. dollar, reflected growing investor confidence and renewed capital inflows into Chinese assets. Sector-wise, technology and automobile shares were standout performers, buoyed by expectations of policy support and improving earnings outlooks. Notable gainers included Li Auto, which rose 3.8%, Horizon Robotics up 3.3%, Xiaomi advancing 3.7%, and China Unicom gaining 2.0%.

Investors remain cautiously optimistic, with attention turning to macroeconomic data and policy signals in the coming days, particularly from the Fed and Chinese regulators, as markets continue to weigh the prospects of global recovery amid lingering uncertainties.