Hong Kong equities are experiencing some turbulence lately. Two main culprits seem to be at play here: AI stocks trading at sky-high valuations that are making investors nervous, and the Fed's monetary policy direction remaining frustratingly unclear.

The AI hype has pushed certain tech valuations into uncomfortable territory. When prices climb too fast without fundamentals keeping pace, markets get jittery - and that's exactly what we're seeing now. Couple that with uncertainty around whether the Federal Reserve will maintain its current stance or pivot, and you've got a recipe for choppy trading sessions.

Investors are essentially caught between FOMO on AI innovation and fear that they're paying tomorrow's prices for today's stocks. Meanwhile, the Fed's mixed signals aren't helping anyone sleep better at night. Will rates stay elevated? Are cuts coming? Nobody knows for sure, and markets hate uncertainty more than bad news.

This wobbling isn't necessarily a crash signal - it's more like the market taking a breather and reassessing whether current prices make sense given the foggy macroeconomic picture. For those watching the crypto space, this traditional market hesitation often creates interesting ripple effects across digital assets too, especially as institutional money flows between different risk categories.