What happened

Shares of Alibaba (BABA -2.77%) were moving higher today, in tandem with a number of Chinese tech stocks. There was no company-specific news on the e-commerce giant, but a number of macro factors seemed to be pushing the stock higher.

As of 2:31 p.m. ET, Alibaba stock was up 3.7%.

The Alibaba logo on a rock outside an office.

Image source: Alibaba.

So what

The Nasdaq entered a correction yesterday, meaning that the tech-heavy U.S. index is down more than 10% from its recent peak, reached in November. U.S. investors seem to be looking for other options at a time when the Fed has signaled that it could raise interest rates up to three times this year, squeezing stock valuations as it attempts to put the brakes on inflation.

As a result, investors are looking for other options, and China is beckoning after Chinese stocks like Alibaba mostly got slaughtered last year amid a crackdown on big tech companies by the central government. In a note this morning, HSBC cut its rating on U.S. stocks and said China could present a good alternative to U.S. equities. At the same time that the Federal Reserve is expected to raise interest rates, investors are increasingly expecting China to ease its monetary policy, as the world's No. 2 economy has struggled during the pandemic, in part due to strict lockdown protocols.

Chinese stocks are also significantly cheaper than their U.S. counterparts, making them an appealing sector to rotate into. Alibaba trades at a price-to-earnings ratio of just 15 based on this-year's expected earnings per share.

Now what

It's tempting to call this a turning point for Alibaba and its Chinese peers, though every time over the last year when it seemed like Alibaba shares were bottoming out, the stock continued to slide even more. However, with market sentiment changing, there does appear to be more upside than downside to Alibaba at this point.

Despite the sluggish Chinese economy and regulatory headwinds, Alibaba's revenue is expected to grow 23% this year. If investors continue to move out of U.S. tech stocks, Chinese alternatives like Alibaba could win.