Tech Cracks Under Pressure: Defensives and the Dow Hold the Line

For the week of Jun 26, Global equity markets retreated into a risk-off posture for the week ending 27 June, as a sharp sell-off in technology shares reverberated across U.S. and Asian markets against a backdrop of elevated inflation, hawkish Fed signals, and mounting concern over stretched AI valuations. In the United States, the Nasdaq Composite and S&P 500 fell meaningfully as large-cap technology stocks led the decline, while the Dow Jones held up in positive territory on defensive rotation into health care, utilities, and real estate. Chinese and Hong Kong markets suffered their worst weekly performance in recent months, with the Hang Seng Index plunging on broad-based selling that was most severe in internet platforms, consumer names, and solar stocks. Singapore's Straits Times Index was effectively flat for the week, as gains in aviation, transport, and S-REIT names were offset by weakness in offshore marine, property developers, and industrials.

🇺🇸 United States

Market Overview

U.S. equities posted a divergent week, with the Dow Jones Industrial Average (DJI) eking out a gain of +0.60% even as the S&P 500 (SPX) fell -1.95% and the Nasdaq Composite (COMP) dropped -4.60%, marking one of the tech-heavy index's sharpest weekly declines of the year. The selldown in large-cap technology and AI-related names drove the underperformance, with sector ETF data pointing to Technology (XLK) as the week's worst performer, while defensives including Health Care (XLV) and Utilities (XLU) led the way higher — a clear rotation into safety amid rising rate and valuation concerns. PCE inflation data for May, released during the week, confirmed headline inflation at 4.1% year-over-year — the highest since April 2023 — keeping the Fed's hawkish posture intact and reinforcing the pressure on growth-oriented equity valuations.

(Refer to the major indices' weekly performance tables below.) 

Major Indices – Weekly Performance

·       Dow Jones Industrial Average (DJI): +0.6%

·       S&P 500 (SPX): -1.95%

·       Nasdaq Composite (COMP): -4.6%

 

---

Key Highlights and Outlook

1️⃣ Technology Leads Market Lower; AI Valuations Under Scrutiny

Technology (XLK) fell -5.40% for the week, the worst-performing S&P 500 sector by a significant margin, as concerns over stretched AI valuations and slowing growth in mega-cap names triggered broad selling. Magnificent 7 constituents bore the brunt of the decline, and SpaceX shares are now down approximately 25% from their post-IPO peak. The move reflects a growing market consensus that the AI-driven rally from March to May has reached a point of valuation exhaustion.

2️⃣ Defensive Rotation Accelerates into Health Care and Utilities

Health Care (XLV) surged +7.32%, the week's clear sector leader, as investors rotated aggressively into defensives amid the tech selloff and inflation uncertainty. Utilities (XLU) +3.22% and Real Estate (XLRE) +3.15% also posted solid gains, a notable reversal from recent weeks when rate sensitivity had weighed on these sectors. Consumer Staples (XLP) +1.69% rounded out the defensive outperformers, confirming the defensive character of the week's market movement.

3️⃣ PCE Inflation at Multi-Year High; Fed Stays Hawkish

The Bureau of Economic Analysis confirmed May PCE inflation at 4.1% year-over-year — the highest reading since April 2023 — while core PCE held at 3.4%, also a multi-year high. Personal income and consumer spending both rose 0.7% in May, ahead of estimates, signalling continued household resilience. The data kept the Fed's hawkish posture firmly intact, with half the FOMC having pencilled in further rate hikes at their June meeting; falling oil prices provide some offset but are unlikely to shift the committee's near-term stance.

4️⃣ GDP Revised Up; Business Activity Improves

First-quarter real GDP growth was revised up to 2.1% annualised from 1.6%, driven by a downward revision to imports. The S&P Global Flash Composite PMI rose to 52.2 in June — a five-month high — with manufacturing PMI reaching 55.7, its strongest since May 2022. Q2 GDP is tracking at approximately 2.5%, underpinned by robust household and business spending, though employment softened for the second consecutive month as firms focused on cost control amid elevated input prices.

5️⃣ Treasury Yields Slip as Oil Falls; Dollar Hits 2026 High

U.S. Treasuries rallied as the 10-year yield dipped below 4.40% for the first time in over a month, aided by falling oil prices and roughly in-line PCE data. Investment-grade corporate bonds gained alongside Treasuries, though high yield faced pressure from monetary policy uncertainty, heavy new issuance, and risk-off positioning. Meanwhile, the U.S. dollar hit a new 2026 high on the back of the Fed's hawkish June pivot, weighing on commodity prices and international equity returns for U.S.-dollar investors.

6️⃣ Oil Collapse Adds Disinflation Tailwind Heading Into H2

WTI crude fell below $70 per barrel — down nearly $25 from a month ago and over $40 from its 2026 peak — as the U.S.–Iran interim peace agreement held and tanker traffic through the Strait of Hormuz continued to recover. Energy prices, which added 1.5 percentage points to May headline CPI, are expected to contribute materially less through the summer months. Lower energy costs should support household real incomes and consumer spending, providing an economic tailwind even as the Fed remains cautious on the rate path.

 

S&P 500 Sectors in Focus

Health Care (XLV) was the week's standout sector, rising +7.32% in a broad rotation into defensives as technology valuations faced scrutiny, while Utilities (XLU) +3.22% and Real Estate (XLRE) +3.15% also outperformed meaningfully. At the other end of the spectrum, Technology (XLK) fell -5.40% as AI and mega-cap growth names came under heavy selling pressure, with Communication Services (XLC) -2.99% also declining on weakness in internet-related names.

---

Technical Snapshot

The S&P 500 (SPX) closed at 7,354.02, down -1.95% for the week and now at +7.43% year-to-date, with the index pulling back from recent highs as technology sector weakness eroded the broader market's gains.

📊 Weekly charts:

• DJI weekly chart
• SPX weekly chart
• Nasdaq weekly chart

---

🇨🇳 China / Hong Kong

Market Overview

Chinese and Hong Kong equities suffered a sharply negative week, as the global technology sell-off combined with domestic demand concerns and sector-specific pressures drove broad-based declines. The Shanghai Composite (SSE) declined -1.55% to close at 4,027.26, while the Hang Seng Index (HSI) fell -5.24% to 22,671.86 — one of its worst weekly performances in recent months — with the index now down -11.54% year-to-date. Internet platforms, solar names, and consumer discretionary stocks led the HSI lower, with the index's heavy weighting in these sectors amplifying the global technology risk-off move; the divergence from mainland benchmarks continued to reflect the HSI's concentrated exposure to names facing both domestic demand headwinds and global growth repricing.

Index Weekly Performance

·       CSI 300: -1.48%

·       Shanghai Composite Index (SSE): -1.55%

·       Hang Seng Index(HSI): -5.24%

 

Key Highlights and outlook

1️⃣ Hang Seng Plunges; Internet and Solar Names Hardest Hit

The HSI's -5.24% decline was driven by broad-based selling across its largest constituents, with internet platforms suffering particularly severe losses: Alibaba fell -14.68%, Sunny Optical plunged -24.02%, Tencent declined -6.45%, and JD.com dropped -11.85%. Solar names were also deeply negative, with Xinyi Solar -14.89% and Zijin Mining -14.40%. The scale of declines across the index reflects a confluence of global risk-off sentiment, domestic demand disappointment, and sector-specific valuation resets.

2️⃣ PBOC Holds LPRs; New Liquidity Framework Under Watch

The People's Bank of China left the one-year and five-year Loan Prime Rates (LPRs) unchanged at 3.00% and 3.50% respectively — steady for 13 consecutive months — reinforcing its deliberate, targeted approach to easing. Separately, the PBOC announced plans to launch overnight reverse repo operations under a new liquidity management framework, following Governor Pan Gongsheng's Lujiazui Forum remarks. Market participants will closely watch the inaugural operation's rate and take-up for signals on the evolution of monetary policy transmission.

3️⃣ Exports Strong but Domestic Demand Remains the Weak Link

May exports rose 19.4% year-on-year — well ahead of expectations — providing a key cushion to growth, but the domestic demand picture remains challenging. Retail sales fell 0.6% YoY in May after barely positive readings in prior months, while property investment declined 16.2% YoY. Combined with fiscal underspending and sluggish fixed-asset investment momentum, the data reinforces the case for more targeted policy support in the second half of 2026, with the July Politburo meeting a key catalyst to watch.

4️⃣ Politburo Meeting in Focus; Policy Pivot Seen as Incremental

The upcoming July Politburo meeting remains the key near-term catalyst, with the market watching for more supportive rhetoric on consumption, project acceleration, and property stabilisation. Sell-side conviction names — AIA, Alibaba, COLI, and Tencent — retain their positioning as key beneficiaries of any such policy shift, given their leverage to household confidence recovery and broader risk sentiment. However, consensus expectation is for measures to remain targeted and incremental, as resilient export performance reduces urgency for a broad-based stimulus pivot.

 

Technical Snapshot

The Hang Seng Index closed at 22,671.86, down -5.24% for the week and now -11.54% year-to-date, breaking below recent support levels in a move accompanied by broad constituent selling that left few defensive havens within the index.

(Refer to the Hang Seng Index constituents’ weekly performance table below.)

📊 Weekly charts:

• SSE weekly chart
• HSI weekly chart

---

🇸🇬 Singapore

Market Overview

The Straits Times Index (STI) closed the week essentially unchanged at 5,191.73, down just -0.02%, preserving the bulk of the prior week's strong +3.32% advance and holding its year-to-date gain at +11.74%. The near-flat close masked significant dispersion beneath the surface, with aviation names — led by SIA (C6L) +5.08% — and defensive S-REIT and staple names posting solid gains, while offshore marine names, property developers, and select industrials gave back ground. Singapore's relative resilience against sharply negative regional peers underscored the market's defensive characteristics and its reduced direct exposure to the technology and internet sectors that drove losses in the U.S. and Hong Kong.

Index Weekly Performance

·       Straits Times Index (STI): -0.02%

 

Key Highlights and Outlook

1️⃣ SIA Leads Gains as Aviation Demand Outlook Holds

Singapore Airlines (C6L) rose +5.08% to close at 7.65, now up +19.53% year-to-date, as continued recovery in air travel demand and the positive margin impact of lower jet fuel costs from falling oil prices drove renewed buying interest. SATS (S58) added +2.75%, extending its run to +17.85% year-to-date, as improving passenger volumes supported the ground handler's recovery trajectory. Aviation-related names provided the week's clearest positive contribution to the STI.

2️⃣ S-REITs Recover as Rate Outlook Stabilises

Several S-REIT names posted positive returns for the week, with Mapletree Pan Asia Commercial Trust (N2IU) +2.36%, Frasers Centrepoint Trust (J69U) +2.23%, and CapLand IntCom Trust (C38U) +2.13% all advancing, while CapitaLand Ascendas REIT (A17U) gained +1.20%. The recovery in rate-sensitive names reflects the modest easing in U.S. Treasury yields during the week, with investors reassessing distribution growth prospects as the inflation and rate outlook stabilised marginally.

3️⃣ Banks Modestly Mixed; DBS Slips on Profit-Taking

Singapore's three banks posted a mixed week, with UOB (U11) gaining +1.40% and OCBC (O39) edging up +0.93%, while DBS (D05) dipped -0.80% — likely reflecting some profit-taking after the prior week's strong advance. All three banks remain comfortably positive on a year-to-date basis, with DBS +16.09% and OCBC +25.81%, supported by healthy NIM levels, robust dividend yields, and solid NPL management. NIM trajectory into year-end remains the key watch variable for the sector.

 

(Refer to the STI weekly performance table below.)

📊 Weekly chart:

• STI weekly chart

 

Source: Some content and data are excerpted from publicly available market reports.

Hawkish Pause: Fed Signals Hikes as Markets Diverge

For the week of Jun 20, Global markets navigated a hawkish pivot from the Federal Reserve this week, with Chair Kevin Warsh's debut press conference flagging potential rate hikes and lifting short-term Treasury yields. U.S. equities managed modest gains as resilient retail sales and easing oil prices — aided by a U.S.-Iran MOU on the Strait of Hormuz — offset the hawkish policy shock. China's onshore markets advanced on solid industrial data, though the Hang Seng Index fell sharply as offshore sentiment soured, compounded by a holiday-shortened week and persistent weakness in domestic consumption. Singapore's Straits Times Index outperformed the region, surging to a fresh high led by broad-based gains in banks, industrials, and transport names.

---

🇺🇸 United States

Market Overview

U.S. equities posted a modest but broad-based advance in a holiday-shortened week — markets were closed Friday for Juneteenth — with sentiment buoyed by softer oil prices following reports of a U.S.-Iran agreement to reopen the Strait of Hormuz. The Nasdaq Composite (COMP) led the major indices with a gain of +2.43%, while the S&P 500 (SPX) added +0.93% and the Dow Jones Industrial Average (DJI) rose +0.71%; however, intraday volatility spiked on Wednesday when the Federal Reserve's updated projections and Chair Warsh's hawkish tone triggered a sharp sell-off in bonds and a temporary retreat in equities.

(Refer to the major indices' weekly performance tables below.)

Major Indices – Weekly Performance

·       Dow Jones Industrial Average (DJI): +0.71%

·       S&P 500 (SPX): +0.93%

·       Nasdaq Composite (COMP): +2.43% 

---

Key Highlights and Outlook

1️⃣ Fed Delivers Hawkish Pause in Warsh's First Meeting

The FOMC held the fed funds rate at 3.50%–3.75% for a fourth consecutive meeting, but the tone turned decisively more hawkish. Updated projections removed the previously expected 2026 rate cut, and roughly half of policymakers now pencil in at least one rate hike this year. Chair Warsh — who did not submit his own projections — reinforced the Fed's price-stability mandate and announced a broad operational review of the central bank's communications and frameworks.

2️⃣ Inflation Forecasts Revised Higher; Rate Cut Base Case Abandoned
The Fed raised its 2026 headline PCE inflation forecast to 3.6% and core PCE to 3.3%, levels well above the 2% target. With services inflation yet to re-accelerate and the unemployment rate anchored near 4.3%, the Fed appears content to hold — but the policy debate has shifted from "when to cut" to "how long to hold, or whether to hike." Markets responded by pricing a higher fed funds path than the Fed's own projections imply.

3️⃣ Retail Sales Beat; Housing Data Remain Challenged

May retail sales rose 0.9% month over month, beating the 0.6% consensus and reflecting resilient household consumption. Control group sales, which feed into GDP calculations, advanced 0.7%. Housing data were more mixed: housing starts fell sharply to an annualised 1.177 million in May versus expectations near 1.445 million, while the NAHB housing market index dipped to 35 amid elevated mortgage rates and rising material costs. Pending home sales offered a partial offset, rising 4.8% year over year.

4️⃣ Treasury Yields Rise Sharply at the Front End

The hawkish Fed read-through pushed short-term Treasury yields notably higher, with the two-year note hitting its highest level in over a year. Investment-grade corporate bonds underperformed Treasuries modestly, while high-yield bonds outperformed on risk-on sentiment and the week's oil-price tailwind. The widening yield advantage of short-term bonds over cash has reinforced arguments for extending duration slightly out of pure cash holdings.

5️⃣ Oil Prices Ease on U.S.-Iran MOU; Energy Sector Lags

Reports that the U.S. and Iran signed a memorandum of understanding clearing the path to reopen the Strait of Hormuz dragged oil prices lower, providing a macro tailwind for inflation sentiment but weighing heavily on energy stocks. The Energy sector (XLE) was the week's worst performer, falling more than 6%, while the Technology sector benefited from the broader risk-on rebound and led all S&P 500 sectors to the upside.

6️⃣ Earnings Resilience Seen as Key Offset to Higher-for-Longer Rates

With monetary policy uncertainty likely to persist into the second half of 2026, the market's ability to sustain recent gains will hinge on continued earnings strength. Analysts see double-digit earnings growth as a viable offset to elevated discount rates, particularly if energy-driven inflation proves transitory. Sector rotation toward cyclicals and broader market participation beyond mega-cap technology remain constructive near-term signals.

S&P 500 Sectors in Focus

Technology was the clear outperformer of the week, rebounding strongly as risk appetite recovered and investors rotated back into growth-oriented names following the oil-price relief. Industrials also performed well, supported by the favourable macro backdrop from easing energy costs. On the downside, Energy was the week's laggard by a wide margin, dragged lower by the sharp fall in crude prices after the U.S.-Iran agreement.

(Refer to the SPX sector ETF weekly performance table below.)

---

Technical Snapshot

The S&P 500 (SPX) reclaimed above the 7,500 level after previous week’s retracement, and reclaiming its 20-week moving average with improving breadth. The index has been consolidating within its three-week price range bound. Weekly uptrend still holding well.

📊 Weekly charts:

• DJI weekly chart
• SPX weekly chart
• Nasdaq weekly chart

---

🇨🇳 China / Hong Kong

Market Overview

Chinese equity markets were mixed in a holiday-shortened week, with mainland China and Hong Kong closed Friday for the Dragon Boat Festival. Onshore markets drew support from better-than-expected industrial production data and easing oil prices, with the CSI 300 Index rising +3.44% and the Shanghai Composite (SSE) gaining +1.46%. By contrast, the Hang Seng Index (HSI) fell -3.21%, reflecting weaker offshore sentiment, persistent concern over domestic consumption, and continued pressure from the property sector.

Index Weekly Performance

·       CSI 300: +3.44%

·       Shanghai Composite Index (SSE): +1.46%

·       Hang Seng Index(HSI): -3.21%

 

Key Highlights and outlook

1️⃣ May Activity Data: Export Strength, Domestic Drag

China's May activity data underscored a widening split between export-facing and domestic sectors. Industrial production rose 4.5% year over year — up from 4.1% in April — supported by AI-driven manufacturing demand and robust external orders. In contrast, retail sales fell 0.6% year over year, the first annual decline since late 2022, while fixed asset investment contracted 4.1% in the first five months of the year. The surveyed urban unemployment rate eased slightly to 5.1%.

2️⃣ Property Sector Weighs Despite First-Tier City Green Shoots

Property investment fell 16.2% year over year in the first five months of 2026, and national home prices remained under pressure in May. However, new-home prices in first-tier cities rose for a third consecutive month, suggesting policy support measures are gaining traction in the largest markets. The recovery nonetheless remains geographically narrow and has yet to translate into broader private sector investment or consumer confidence.

3️⃣ PBOC Unveils Financial Market Initiatives; Short on Stimulus

PBOC Governor Pan Gongsheng announced measures to expand overnight reverse repo operations, narrow the short-term interest rate corridor, and promote offshore renminbi usage, alongside initiatives to position Shanghai as a yuan-denominated asset hub. While the announcements signal continued commitment to financial market infrastructure development, they did not constitute broad-based monetary stimulus, and markets appeared to interpret them as incrementally supportive rather than a major policy shift.

4️⃣ Maybank Favours Capex and Export-Linked Names; Top Picks Highlighted

Maybank Kim Eng's Dim Sum Weekly maintained a preference for capex-leveraged and export-oriented names over domestic consumption plays, citing the AI infrastructure and industrial upgrading tailwinds. CATL and SMIC were highlighted as well-positioned semiconductor and advanced manufacturing beneficiaries. MiniMax was flagged as a tactical catch-up opportunity versus Knowledge Atlas ahead of an upcoming model update, while CK Hutchison was cited for its asset monetisation story and defensive cash flow from its global infrastructure, ports, and telecom portfolio. (MSSG Research)

 

Technical Snapshot

The HSI's -3.21% decline this week pushed the index back below the 24,000 level, with the weekly candle printing a notable bearish reversal after the prior week's recovery attempt. The SSE Composite held above 4,050 support and remains in a gradual uptrend despite the modest weekly gain, suggesting mainland sentiment is more resilient than offshore flows imply. Near-term direction for the HSI will likely hinge on whether domestic data prints — particularly retail and property — begin to stabilise in June.

(Refer to the Hang Seng Index constituents’ weekly performance table below.)

📊 Weekly charts:

• SSE weekly chart
• HSI weekly chart

---

🇸🇬 Singapore

Market Overview

Singapore equities were the standout regional performer this week, with the Straits Times Index (STI) surging +3.32% to close at 5,192.70 — a fresh multi-year high and one of the index's strongest weekly performances year to date. The advance was broad-based, with SATS topping the constituent table at +10.91% and YZJ Shipbuilding, SGX, Keppel, and the three local banks all posting meaningful gains. The STI's year-to-date return now stands at +11.76%, underpinned by consistent inflows into financials and selected industrials.

Index Weekly Performance

·       Straits Times Index (STI): +3.32%

 

Key Highlights and Outlook

1️⃣ STI Surges to Fresh Multi-Year High on Broad Participation

The STI's +3.32% weekly gain was supported by broad constituent participation, with 22 of 30 index members closing in positive territory. The move confirmed a breakout above the prior resistance zone near 5,050. Sustained buying in defensively positioned banks and high-quality industrials suggests institutional accumulation rather than short-covering, a constructive structural signal.

2️⃣ Banks Lead Gains; OCBC and DBS Among Top Contributors

All three local banks posted solid weekly gains, with OCBC (O39) advancing +4.81%, DBS (D05) rising +4.30%, and UOB (U11) adding +2.86%. The banking sector continues to benefit from a higher-for-longer global rate backdrop that underpins net interest margins, alongside resilient loan demand and improving fee income. With the Fed explicitly ruling out near-term cuts, the favourable rate environment for Singapore banks remains intact into the second half of 2026.

3️⃣ S-REITs and Property Stocks Lag as Rate Sensitivity Weighs

Against the week's broadly positive backdrop, S-REITs and property-linked names underperformed. HK Land (H78) was the weakest STI constituent at -3.68%. The hawkish Fed read-through reinforced concerns that rate relief for yield-sensitive sectors remains distant, keeping cap rate pressure elevated and limiting near-term re-rating potential for the S-REIT sub-segment.

(Refer to the STI weekly performance table below.)

📊 Weekly chart:

• STI weekly chart

 

📅 Week Ahead (22-26 June 2026)

U.S.

- Fed operational review announcements

- May PCE price index

 

🗓️ Overarching Watchpoint

The May U.S. PCE print is the week's binary risk event. A reading above the Fed's revised 3.6% forecast would materially increase the probability of a 2026 rate hike and could trigger a broader risk-off move across equities and credit; a print in line or below would ease the hawkish pressure and support the case for a prolonged but stable hold, keeping equity markets on firmer footing heading into mid-year.

Source: Some content and data are excerpted from publicly available market reports.

Breadth Builds: Tech Wobbles as Markets Rotate and SpaceX Debuts

For the week of Jun 13, global equity markets navigated a volatile but ultimately constructive week, as easing Middle East tensions and broadening market leadership offset mixed inflation data and turbulence in large-cap technology names. In the United States, all three major indices edged higher as the historic SpaceX IPO captured investor attention and rotation into cyclicals, financials, and small-caps gathered momentum even as semiconductor stocks pulled back sharply. Chinese equities delivered a split verdict — strong export data and resilient PPI growth underpinned the Shanghai Composite, while the Hang Seng slipped as weaker offshore sentiment and Pentagon scrutiny of Chinese technology firms weighed on Hong Kong-listed names. Singapore's Straits Times Index dipped modestly, dragged by profit-taking in the local banks and select industrials, even as S-REITs and logistics trusts provided partial support.

---

🇺🇸 United States

Market Overview

U.S. equities extended their recovery for a second consecutive week, with the Dow Jones Industrial Average (DJI) gaining +0.66%, the S&P 500 (SPX) adding +0.65%, and the Nasdaq Composite (COMP) advancing +0.70%, as improving geopolitical sentiment around a possible U.S.–Iran agreement offset a sharp mid-week selloff in semiconductor stocks. Beneath the surface, the week was defined by rotation rather than breadth, with small-caps, financials, and defensives outperforming while the concentrated AI trade took a breather. The Russell 1000 Value Index outpaced its growth counterpart for the second consecutive week, reinforcing the broadening theme.

(Refer to the major indices' weekly performance tables below.)

Major Indices – Weekly Performance

·       Dow Jones Industrial Average (DJI):: +0.66%

·       S&P 500 (SPX):: +0.65%

·       Nasdaq Composite (COMP): +0.70%

 

---

Key Highlights and Outlook

1️⃣ Semiconductor Pullback Interrupts AI Rally

The Philadelphia Semiconductor Index, which had nearly doubled year-to-date, fell approximately 12% before partially recovering, as profit-taking after a parabolic rally — rather than any fundamental deterioration — drove the move. Large cloud providers continue to ramp AI infrastructure spending, reinforcing the longer-term structural demand thesis even as near-term positioning resets. 

2️⃣ SpaceX Completes Record-Breaking IPO
SpaceX raised approximately USD 75 billion in the largest public offering in history, priced at USD 135 per share and implying a valuation near USD 1.8 trillion. With a free float of under 5%, index inclusion will be gradual — the S&P 500 has declined to fast-track eligibility, requiring a standard 12-month seasoning period — limiting near-term passive demand but preserving scarcity premium.

3️⃣ CPI Rises to 4.2% YoY as Energy Drives Headline Inflation

May CPI rose 4.2% year over year, the highest reading since April 2023, driven by a 10.7% month-over-month surge in energy prices within the PPI. Core CPI, however, moderated to +0.2% month on month (from +0.4% in April), with goods deflation reappearing for the first time in a year, providing the Fed with room to remain patient rather than pivot to tightening.

4️⃣ Fed Holds, Likely to Remove Easing Bias at June Meeting

With headline inflation energy-driven and core pressures contained, the Fed is expected to keep rates on hold while removing its explicit easing bias at the upcoming meeting. A prolonged pause — rather than a renewed tightening cycle — remains the base case, a backdrop that continues to support equity valuations as long as economic growth stays resilient and earnings momentum persists.

5️⃣ Market Breadth Improves; Equal-Weight SPX Outperforms

The equal-weight S&P 500 is now outperforming its cap-weighted counterpart by approximately 2 percentage points year-to-date (11% vs. 9%), with financials, healthcare, consumer staples, and small-caps gaining relative traction. This shift away from narrow mega-cap leadership toward broader participation is viewed as a constructive development for the sustainability of the bull market cycle.

6️⃣ Geopolitics: U.S.–Iran De-escalation Supports Risk Sentiment

President Trump's cancellation of planned U.S. strikes on Iran and reports of progress toward a bilateral agreement helped compress oil prices and Treasury yields through the latter part of the week. A sustained reopening of the Strait of Hormuz would provide meaningful relief to both energy prices and headline inflation — representing the key upside catalyst for a further broadening of equity market leadership.

 

S&P 500 Sectors in Focus

Sector performance diverged sharply in Week 24, with defensive and cyclical names leading while energy and communications services lagged.

(Refer to the SPX sector ETF weekly performance table below.)

---

Technical Snapshot

The S&P 500 (SPX) at 7,431.46, posting a modest weekly gain that kept the index in a narrow consolidation range. The Index had fantastic nine-week up streak before 2.6% down by profit-taking and stabilising this week. Weekly uptrend still holding well.

📊 Weekly charts:

• DJI weekly chart
• SPX weekly chart
• Nasdaq weekly chart

---

🇨🇳 China / Hong Kong

Market Overview

Chinese equity markets delivered a split result in Week 24, with divergent performance between onshore and offshore markets reflecting differing risk appetites and thematic drivers. The CSI 300 fell -0.82% while the Shanghai Composite (SSE) eked out a marginal +0.09% gain, as strong trade data and accelerating PPI provided some support to onshore sentiment. The Hang Seng Index (HSI) underperformed with a -0.98% decline, weighed by weaker offshore risk appetite, the Pentagon's expanded military-entity list targeting several blue-chip Chinese technology names, and renewed regulatory action in the e-commerce sector.

Index Weekly Performance

·       CSI 300: -0.82%

·       Shanghai Composite Index (SSE): +0.09%

·       Hang Seng Index(HSI): -0.98%

 

Key Highlights and outlook

1️⃣ Exports Surge 19.4% YoY, AI Hardware Drives Outperformance

China's May exports rose 19.4% year over year, accelerating from 14.1% in April and materially exceeding market expectations. Semiconductor exports more than doubled from a year earlier, with AI-related goods — electric vehicles, computing equipment, and advanced manufacturing — remaining the key engine of external demand. The trade surplus widened to USD 105.4 billion, reinforcing the structural role of exports as a buffer for the still-fragile domestic recovery.

2️⃣ CPI-PPI Divergence Widens; Margin Pressure Builds

China's PPI rose 3.9% year over year in May, accelerating for a third consecutive month and reaching its highest level since July 2022, driven by rising commodity and energy costs. CPI remained anchored at 1.2%, unchanged from April, highlighting the absence of meaningful cost pass-through to consumers. The widening CPI-PPI gap points to mounting pressure on corporate profit margins, particularly for domestic-facing industries with limited pricing power.

3️⃣ Pentagon Blacklist Expands to Alibaba, Baidu, BYD, WuXi AppTec

The U.S. Department of Defense expanded its list of alleged Chinese military-linked companies to include Alibaba, Baidu, BYD, WuXi AppTec, Yangtze Memory Technologies, and Unitree Robotics. The designation stops short of broad sanctions but restricts U.S. defence procurement and heightens regulatory and reputational risk. Several named companies have disputed the designation; investors should monitor for secondary effects on institutional ownership and index eligibility reviews.

4️⃣ 618 Festival Regulatory Action Creates Tactical Entry Opportunity

Regulatory action against e-commerce platforms over misleading advertising practices during the mid-year 618 shopping festival triggered a late-week pullback in the sector. While the immediate impact is sentiment-driven rather than structural, the dip presents a tactical entry for investors with medium-term conviction, particularly in names with diversified revenue streams and export-market exposure. Midea (00300.HK) and JD.com (09618.HK) are highlighted as well-positioned beneficiaries given their capacity to capture incremental AI-linked and cross-border demand. (MSSG Research)

 

Technical Snapshot

The Hang Seng Index closed at 24,718, extending its negative year-to-date trend (-3.56%) with a weekly loss of -0.98%, as the index struggled to sustain a recovery above the psychologically important 25,000 level. Near-term support is seen around 24,400–24,500, with a break below risking a retest of the April lows. The HSI's underperformance relative to the onshore CSI 300 reflects lingering offshore risk aversion tied to geopolitical developments and tech-sector regulatory noise; a resolution of U.S.–China technology tensions or a sustained rally in AI-linked names could be the catalyst needed to close the gap.

(Refer to the Hang Seng Index constituents’ weekly performance table below.)

📊 Weekly charts:

• SSE weekly chart
• HSI weekly chart

---

🇸🇬 Singapore

Market Overview

The Straits Times Index (STI) slipped -0.48% to close at 5,025.80 in Week 24, paring back some of its year-to-date outperformance (+8.17%) as the local banking trio came under selling pressure and selected industrial names corrected. The retreat was orderly rather than alarming, with S-REITs and logistics trusts providing a partial cushion.

Index Weekly Performance

·       Straits Times Index (STI): -0.48%

 

Key Highlights and Outlook

1️⃣ Banks Retreat on Profit-Taking; Sector Remains Well-Supported

DBS (D05) fell -0.85%, UOB (U11) -1.01%, and OCBC (O39) -1.84% on the week, as investors took profits in the sector's strongest year-to-date performers after a sustained run. The pullback is likely technical in nature rather than fundamentals-driven — Singapore bank NIMs remain resilient in a high-for-longer interest rate environment, and capital return visibility is strong.

2️⃣ S-REITs Stage Selective Recovery; Rate Sensitivity in Focus

S-REIT performance diverged along quality and sub-sector lines, with logistics and industrial names outperforming while retail and commercial trusts lagged. Mapletree Logistics Trust (M44U, +3.39%), CapLand IntCom Trust (C38U, +3.08%), and CapLand Ascendas REIT (A17U, +2.43%) led the advance as market participants positioned for a potential moderation in U.S. Treasury yields following signs of cooling core inflation. A sustained decline in the 10-year UST yield toward 4.30–4.40% would be a meaningful tailwind for S-REIT valuations.

3️⃣ STI Consolidates Near 5,000; Support Holds Amid Global Choppiness

The STI's ability to hold above the 5,000 psychological support level in the face of global volatility and domestic bank profit-taking underscores the resilience of the local market's earnings foundation.

(Refer to the STI weekly performance table below.)

📊 Weekly chart:

• STI weekly chart

 

📅 Week Ahead (15-19 June 2026)

In the United States, markets will focus on the Federal Reserve's June FOMC meeting and accompanying press conference on Jun 16-17( US EST)

 

🗓️ Overarching Watchpoint

The single biggest binary risk for the week is the Federal Reserve's June policy statement and Powell's press conference. While no rate change is expected, the tone around the removal of the easing bias — and whether policymakers signal any concern about energy-driven headline inflation becoming entrenched — could move both Treasury yields and risk assets meaningfully in either direction, setting the trajectory for equity and credit markets into the second half of 2026.

Source: Some content and data are excerpted from publicly available market reports.