Chinese stocks experienced a significant decline early on Thursday following a high-profile summit between President Joe Biden and Xi Jinping, as well as a warning from Alibaba.

The ecommerce giant, Alibaba (ticker: BABA), saw an 8.6% drop in premarket trading. JD.com slumped by 4.8%, while Baidu (BIDU) fell by 3.8%. Electric vehicle makers were also affected, with NIO dropping by 4%, XPeng (XPEV) down by 4.4%, and Li Auto (LI) 3.4% lower.

Alibaba reported its earnings on Thursday; however, the results quickly took a back seat. While the company’s profits exceeded expectations, it announced that it would not proceed with the planned spinoff of its cloud division due to expanded U.S export controls on chips, which has created uncertainty for the business.

The summit that took place in San Francisco on Wednesday resulted in warm words exchanged between the heads of state of the world’s two largest economies in their first meeting in a year. They also agreed to resume direct communications between their two militaries. However, little was mentioned about the ongoing tariffs affecting goods such as semiconductors or battery parts.

As a result of these developments, Chinese markets closed down on Thursday. The Shanghai composite experienced a loss of 0.7%, while Hong Kong’s Hang Seng index fell by 1.4%.

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