Headwinds Ease: Wall Street Breaks Out to Records

For the week of Aug 07, global equities advanced as easing worries over AI spending, softer oil prices and receding fears of further Fed tightening let fundamentals reassert themselves. In the U.S., major benchmarks broke out of their summer range to fresh record highs, powered by strong big-tech earnings and a softer July jobs report that trimmed rate-hike bets. China's mainland indices advanced on renewed technology and semiconductor strength, while Hong Kong slipped as a new tax on offshore insurance income weighed on financials. Singapore's Straits Times Index edged to new highs, led by industrials and its banks. Singapore market closes on Monday Aug 9 for National Day holiday, wil resume trading on Tuesday.

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

🇺🇸 United States

Market Overview

U.S. equities broke decisively higher, with the Nasdaq Composite (COMP) surging 5.19% for its best week since April, the S&P 500 (SPX) climbing 3.58% and the Dow Jones Industrial Average (DJI) adding 2.96%. All three closed at or near fresh record highs as favourable corporate earnings, renewed AI enthusiasm and hopes for a reopening of the Strait of Hormuz lifted sentiment. Falling oil prices and softer labour data drove Treasury yields lower, reinforcing the risk-on tone.

Index Weekly Performance

-  Dow Jones Industrial Average (DJI): +2.96%

-  S&P 500 (SPX): +3.58%

-  Nasdaq Composite (COMP): +5.19%

Key Highlights and Outlook

1️⃣ Indices Break Out to Fresh Record Highs

After three months rangebound, U.S. stocks broke to new highs as three headwinds — doubts over AI spending, energy-driven inflation risk and Fed-tightening fears — eased in unison. With those overhangs lifting, earnings and economic fundamentals reasserted themselves as the primary drivers of prices, per Edward Jones.

2️⃣ AI Earnings Renew Confidence in the Cycle

Large technology firms reported accelerating cloud growth, rising AI demand and expanding backlogs. Microsoft added roughly USD 450bn in market value after results — the largest single-day market-cap gain on record — while Meta slipped as investors questioned whether heavy capex would translate into returns. The AI story is maturing, not breaking, Edward Jones noted.

3️⃣ Earnings Strength Broadens Beyond Mega-Cap Tech

With over 85% of the S&P 500 reported, Q2 earnings growth is tracking near 48% — roughly 29% excluding investment-related gains at Alphabet and Amazon. Six of the remaining nine sectors delivered double-digit growth, pointing to a healthier, broader foundation for the advance, according to Edward Jones.

4️⃣ July Jobs Miss Recalibrates Fed Expectations

Employers shed 23,000 jobs in July versus expectations for an 80,000 gain, with prior months revised sharply lower and the unemployment rate easing to 4.1% on lower participation. Stocks rallied on the “bad-news-is-good-news” read: odds of a September rate hike fell to about 42% from roughly 55%.

5️⃣ Manufacturing Accelerates as Oil Retreats

The ISM Manufacturing PMI rose to 55.6, its highest since May 2022, as new orders and production strengthened and hiring turned positive. WTI crude retraced much of last month's spike on hopes of Strait of Hormuz de-escalation, easing energy-inflation concerns even as talks remained fluid.

6️⃣ Treasuries Rally, Yields Ease

Softer labour data and lower oil pushed Treasury yields down across maturities, with the 10-year note falling to roughly 4.64% from 4.74% a week earlier. Lower yields provided an additional tailwind for equities, particularly rate-sensitive growth names.

S&P 500 Sectors in Focus

Technology led the tape by a wide margin as the AI-driven rally reasserted itself, with Materials also outperforming on the improving industrial backdrop. Consumer Discretionary, Industrials and Communication Services likewise finished firmly higher. Energy was the clear laggard, dragged by the sharp retreat in oil prices, while Utilities and Real Estate also lagged as the week's risk-on rotation favoured cyclical and growth exposure.

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

Technical Snapshot

The major indices cleared the upper boundary of their multi-month trading range, with the Nasdaq within arm's reach to its all-time high of 27190 and the SPX and DJI both confirming new-high territory. Breadth improved as leadership rotated back toward growth. On the charts, SPX, the Nasdaq Composite and the DJI have all resolved their prior sideways consolidation to the upside, establishing higher trading bands as price discovery extends into fresh-high territory.

📊 Weekly charts: 

DJI weekly chart  

SPXweekly chart  

Nasdaq weekly chart

 

🇨🇳 China / Hong Kong

Market Overview

China's markets diverged sharply. The Shanghai Composite (SSE) rose 2.81% and the CSI 300 gained 2.32% as technology and semiconductor shares rallied, while the Hang Seng Index (HSI) fell 0.84% in local-currency terms, dragged by financials. News that mainland tax authorities would levy taxes on offshore insurance policies weighed on Hong Kong-listed insurers and banks.

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

Index Weekly Performance

-  CSI 300: +2.32%

-  Shanghai Composite (SSE): +2.81%

-  Hang Seng Index (HSI): -0.84%

Key Highlights and Outlook

1️⃣ Mainland–Hong Kong Divergence Widens

Renewed strength in technology and semiconductor names lifted mainland benchmarks to solid weekly gains, even as the Hang Seng slipped. The split reflected diverging drivers: an AI- and tech-led bid onshore versus financials-led weakness in Hong Kong, per T. Rowe Price.

2️⃣ Offshore Insurance Tax Hits HK Financials

Tax authorities in Beijing and Hangzhou began applying a 20% levy on income from mainland residents' overseas insurance policies, including dividend and interest returns. The move — seen as part of tighter scrutiny of cross-border flows — sent Hong Kong-listed insurers and financials sharply lower, with heavyweight AIA among the biggest constituent decliners.

3️⃣ Macro Data Mixed as Trade Frictions Resurface

The RatingDog manufacturing PMI eased to 50.9 and services to 50.4, their softest in months, echoing the official survey's slip into contraction. Yet exports rose 23.9% YoY on resilient AI-electronics demand, even as fresh U.S.–China curbs — new import bans, blacklistings and Beijing's retaliatory controls — clouded the trade outlook.

4️⃣ Policy Support and Southbound Flows

Maybank KE's Dim Sum Weekly flagged the July Politburo's tilt toward targeted support and its “Six Networks” push to strengthen AI, data-centre and digital infrastructure, while Hong Kong signalled an upgrade to its 2026 growth forecast after 1H GDP rose 5.1% YoY. Southbound investors were net buyers of Alibaba, Tencent and Xiaomi, and net sellers of Meituan and China Construction Bank.

5️⃣ Maybank KE House Views

Maybank KE maintains BUY on China Telecom (728 HK, TP HKD 6.00) on next-gen infrastructure and a ~6.4% FY26e yield; Hong Kong Land (HKL SP, TP USD 9.30) on capital recycling and an office-leasing recovery; XPeng (9868 HK, TP HKD 80.00) on overseas expansion and AI optionality; and Yum China (9987 HK, TP HKD 479.00) on store growth and efficiency gains.

Technical Snapshot

The Hang Seng slipped back below recent resistance to around 25,668, underperforming firmer mainland benchmarks as financials led the pullback. Despite the weekly loss, the index held marginally positive year-to-date, keeping its broader base intact. Near-term direction likely hinges on stabilisation in financials and follow-through from the mainland's tech-led bid.

(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) rose 1.24% to 5,698.43, edging to fresh highs and extending a market-leading year-to-date gain of 22.65%. Gains were led by industrials and the local banks, offsetting broad weakness across property trusts and REITs.

Index Weekly Performance

-  Straits Times Index (STI): +1.24%

Key Highlights and Outlook

1️⃣ STI Extends Record-Setting Run

The benchmark notched another fresh high, cementing its standing as one of the region's strongest performers this year. The advance was concentrated at the top of the table even as the tape narrowed lower down, with roughly half the constituents ending the week in the red.

2️⃣ Industrials and Shipyards Lead

Venture Corp topped the index, followed closely by Yangzijiang Shipbuilding, with ST Engineering and SATS also among the leaders. Strength in manufacturing, shipbuilding and defence-linked names underpinned the index's push to new highs.

3️⃣ REITs and Property Trusts Under Pressure

The Mapletree trusts, Frasers vehicles and CapitaLand Ascendas REIT were among the week's heaviest fallers, while Keppel DC REIT and several developers also softened. Rate-sensitive S-REITs lagged the broader tape even as Treasury yields eased late in the week.

4️⃣ Index Heavyweights Mixed

Singtel, the Jardine counters (JMH) and DFI Retail weighed on the index, ranking among the steepest decliners. Their weakness partly offset leadership from the banks and industrials, keeping the STI's weekly advance measured despite the fresh high.

5️⃣ Financials Anchor a Heavy Results Week

Singapore's three lenders reported 2Q/1H FY26 — DBS on 6 Aug, OCBC and UOB on 7 Aug. DBS posted a record quarter (net profit ~S$3.08bn, +9% YoY) on surging wealth fees, prompting Maybank KE to raise its target to S$85.86 (BUY); the stock rose 3.12%. OCBC (+4.02%) beat with profit up 22% YoY, though led by non-interest income, while UOB (-0.23%) lagged on elevated NPAs and a trimmed fee-income outlook. SGX capped the week with strong FY results and higher capital returns (Maybank KE BUY, TP S$28.33).

Technical Snapshot

The STI extended its uptrend to a fresh high at 5,698.43, keeping its year-to-date leadership intact. Momentum stayed constructive at the index level even as breadth thinned, with gains concentrated in banks and industrials against a soft REIT complex. The trend remains higher while the index holds its rising near-term support.

(Refer to the STI constituents' weekly performance table below.)

📊 Weekly charts: 

STI weekly chart

 

📅 Week Ahead (10–14 August 2026)

In the U.S., the July CPI report on Wednesday, 12 Aug is the marquee release, carrying added weight after soft jobs data left markets pricing roughly a 42% chance of a September rate hike. Producer prices and retail sales follow later in the week, alongside the tail end of Q2 earnings season.

In China and Hong Kong, July inflation (CPI and PPI) and new-yuan-loan and aggregate-financing data are due, offering a fresh read on demand after softer PMIs. Investors will also watch for follow-through on U.S.–China trade frictions and continued Hong Kong corporate earnings.

Singapore starts the week shortened by the National Day holiday on Monday, 10 Aug (Japan is also closed on 11 Aug), before results season broadens from the banks to mid-caps and REITs. With the big three lenders now reported, sell-side positioning is split: UOB Kay Hian's Alpha Picks favours staying with the banks, while DBS and Phillip flag a rotation toward laggard tech such as UMS and AEM.

🗓️ Overarching Watchpoint

The single biggest binary risk is Wednesday's U.S. July CPI. A hotter-than-expected print would revive fears of further Fed tightening and could quickly unwind the AI-led breakout, whereas a benign reading would reinforce the “bad-news-is-good-news” dynamic and validate fresh record highs.

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

Fed Stands Pat: Tech Earnings Take the Wheel

For the week of Jul 31, global equities finished mostly higher as the Federal Reserve’s hawkish hold and a heavy slate of mega-cap technology earnings dominated sentiment. In the U.S., major indexes advanced despite three FOMC dissents and a sharp steepening in long-dated Treasury yields, with investors scrutinising whether AI capital spending is converting into durable returns. China diverged as a mainland semiconductor sell-off dragged the CSI 300 lower, while Hong Kong rallied on strength in large internet platforms. Singapore’s Straits Times Index edged higher, extending its year-to-date leadership among the markets tracked.

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

 

🇺🇸 United States

Market Overview

U.S. equities closed the week higher but with sharp intraweek swings tied to the Fed meeting, the ongoing U.S.–Iran conflict, and volatility in AI-related shares. The Dow Jones Industrial Average (DJI) gained 1.04%, the S&P 500 (SPX) rose 1.05%, and the Nasdaq Composite (COMP) added 1.59%, with a Thursday rebound in technology stocks helping steady the tape after early-week pressure on AI names.

Index Weekly Performance

– Dow Jones Industrial Average (DJI): +1.04%

– S&P 500 (SPX): +1.05%

– Nasdaq Composite (COMP): +1.59%

Monthly Performance – July 2026

For the month of July, U.S. large caps were broadly flat while tech-heavy segments lagged. The Dow Jones Industrial Average eked out a 0.32% monthly gain and the S&P 500 slipped 0.13%, while the Nasdaq Composite fell 3.20% as the AI-spending debate and the Fed’s hawkish shift weighed on higher-multiple growth names.

(Refer to the major indices’ monthly performance table below.)

Key Highlights and Outlook

1️⃣ Fed Holds Rates, But Three Dissenters Push for a Hike

The FOMC held the funds target range at 3.50%–3.75% for a fifth straight meeting in a 9–3 vote, with three regional presidents favouring a quarter-point hike on concerns about sticky inflation. Chair Warsh reiterated the commitment to price stability but offered limited guidance, leaving the timing of the next move unclear.

2️⃣ Long-End Yields Surge to Post-2007 Highs

Treasury yields rose after the meeting, with the largest moves at the long end steepening the curve. The 30-year yield climbed above 5.2% for the first time since 2007, reaching roughly 5.26% by Friday, as investors reassessed the higher-for-longer path and, in some cases, questioned the Fed’s inflation-fighting resolve.

3️⃣ Mega-Cap Tech Earnings Split the Market

Four of the Magnificent 7 reported. Microsoft and Amazon rallied on stronger cloud growth, while Meta fell on an earnings miss and soft guidance and Apple declined on cost concerns and a cautious outlook. The reaction signalled a shift from rewarding AI spending toward scrutinising the revenue and earnings it generates.

4️⃣ Inflation Cools, But Stays Above Target

Headline PCE eased to 3.7% year over year in June and core PCE edged down to 3.3%, both below expectations but still well above the 2% goal. GDP growth slowed to a 1.5% annualised pace in the second quarter, while consumer confidence dipped to 90.8 as views of current conditions deteriorated.

5️⃣ A Strong, Broad-Based Earnings Season

With over half of the S&P 500 reported, 86% have beaten estimates at an average 31% upside surprise, lifting second-quarter growth forecasts to 37% from 22%. Gains have been broad, with 10 of 11 sectors posting year-over-year increases – breadth that could make the market’s advance more durable.

S&P 500 Sectors in Focus

Consumer discretionary led the S&P 500 sectors, buoyed by a late-week rally in Amazon after its better-than-expected results, with communication services and financials also finishing higher. Defensive and rate-sensitive corners lagged, with utilities the weakest performer and real estate also under pressure as long-end yields climbed. Technology finished modestly lower on the week despite Thursday’s rebound, reflecting the ongoing tug-of-war over AI capital spending.

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

Technical Snapshot

The SPX and COMP both rebounded after two-week consecutive decline and DJI also recorded 1^st weekly gain after three weeks down. Momentum remains constructive but is increasingly sensitive to rate moves and AI-earnings headlines. Structurally, all three indexes have been in consolidating sideways beneath their recent highs as they digest the mega-cap divergence.

📊 Weekly charts:

– DJI weekly chart

– SPX weekly chart

– Nasdaq weeklychart

 

🇨🇳 China / Hong Kong

Market Overview

Chinese equities diverged sharply as a global AI-shares sell-off pressured mainland technology and growth stocks while Hong Kong advanced. The CSI 300 Index fell 1.31% and the Shanghai Composite (SSE) edged up 0.47%, while the Hang Seng Index (HSI) surged 3.69% in local-currency terms, powered by large internet platforms including Tencent and Alibaba.

(Refer to the major indices’ weekly performance tables above.)

Index Weekly Performance

– CSI 300: -1.31%

– Shanghai Composite (SSE): +0.47%

– Hang Seng Index (HSI): +3.69%

Key Highlights and Outlook

1️⃣ Hong Kong Outperforms on Internet-Platform Rotation

The Hang Seng surged as investors rotated into large internet names, with Tencent and Alibaba leading. Gains in more defensive areas, including banks and consumer staples, helped offset technology weakness spilling over from the mainland, leaving Hong Kong the standout among the markets tracked this week.

2️⃣ CXMT Debut Euphoria Gives Way to Chip Sell-Off

Memory-chip maker ChangXin Memory Technologies closed roughly 466% above its IPO price on its Monday debut – Asia’s largest listing of 2026 – briefly the most valuable A-share at a market cap near RMB 3.3 trillion. Euphoria faded as selling spread across semiconductor and AI-infrastructure names on valuation concerns, though a Friday rebound trimmed the CSI 300’s weekly loss.

3️⃣ Politburo Signals Targeted, Not Sweeping, Support

The Politburo reaffirmed a proactive fiscal stance and moderately loose monetary policy, pledging stronger countercyclical adjustments, faster fiscal spending, and support for AI and computing infrastructure. Crucially, the readout stopped short of a broad new stimulus program, signalling that policy support will remain targeted and incremental.

4️⃣ Manufacturing Slips Back Into Contraction

The official manufacturing PMI fell to 49.2 in July from 50.3, its first contraction since February, as production, new orders, and export orders all weakened. The non-manufacturing index dropped to 49.0 – its lowest since December 2022 – underscoring persistent softness in domestic demand, investment, and construction.

5️⃣ Maybank KE: Rotate to Financials, Buy Quality AI on Dips

Maybank KE views this week’s tech volatility and rotation into financials as consistent with its preference for the sector, reading the AI pullback as a healthy correction rather than a fundamental deterioration. It would accumulate quality beneficiaries such as ASMPT and SMIC on weakness – the latter the HSI’s weakest constituent this week – and also flags CATL (power-infrastructure and energy-storage growth) and Trip.com (a lifted antitrust overhang plus resilient travel demand) as constructive ideas.

Technical Snapshot

The Hang Seng broke decisively higher, clearing prior resistance on strong breadth as internet heavyweights led the advance. The mainland CSI 300, by contrast, remains capped by its semiconductor-heavy composition and slipped despite the Friday bounce. Near-term, the HSI’s momentum looks constructive, though follow-through will hinge on the durability of the global AI-earnings recovery and the pace of southbound flows.

(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) rose 0.72% on the week to close at fresh highs, extending its strong year-to-date run and remaining the top performer among the markets tracked. Gains were broad but shallow across constituents, led by consumer and property-linked names, while a small group of industrial and technology-exposed stocks weighed.

(Refer to the major indices’ weekly performance tables above.)

Index Weekly Performance

– Straits Times Index (STI): +0.72%

Key Highlights and Outlook

1️⃣ STI Extends Year-to-Date Leadership

The STI added 0.72% for the week and now sits up more than 21% year to date, comfortably the strongest performer among the indices tracked. Weekly gains were broad but shallow, with most constituents posting small positive moves rather than a single sector driving the advance.

2️⃣ DFI Retail Leads Constituents Sharply Higher

DFI Retail (D01) was the standout, jumping 15.16% on the week, well ahead of the next-best movers CapitaLand Investment (9CI), up 6.83%, and UOL (U14), up 5.32%. Property-linked and consumer names featured prominently at the top of the weekly leaderboard.

3️⃣ ST Engineering and Yangzijiang Lag

ST Engineering (S63) was the weakest constituent, falling 4.91%, followed by Yangzijiang Shipbuilding (BS6), down 2.00%, and Venture (V03), down 1.30%. The declines were concentrated in a handful of industrial and technology-exposed names against an otherwise firm tape.

4️⃣ Local Banks Little Changed on the Week

The three local banks were near-flat, with UOB (U11) up 0.18%, OCBC (O39) up 0.14%, and DBS (D05) up 0.11%. Despite muted weekly moves, OCBC and DBS continue to lead the trio year to date, up 47.42% and 31.33% respectively.

Technical Snapshot

The STI continued to grind to fresh highs, holding a well-established uptrend with support building on pullbacks. Breadth remains healthy, though the pace of gains has moderated as the index trades at elevated levels. Near-term, the STI’s structure stays constructive, but stretched year-to-date returns leave it more vulnerable to consolidation on any external risk-off shift.

(Refer to the STI weekly performance table below.)

📊 Weekly charts:

– STI weekly chart

 

📅 Week Ahead (03–07 August 2026)

The U.S. calendar features the July employment report, the marquee release after a hawkish Fed hold, alongside ISM services and further second-quarter earnings. With three FOMC members already dissenting toward a hike, wage and payroll data will shape expectations for a potentially live September meeting. Any upside surprise in inflation-sensitive prints or energy prices could reinforce the higher-for-longer narrative.

In China, markets will digest the weak July PMIs and watch for follow-through on the Politburo’s targeted-support pledges, including the pace of fiscal spending and bond issuance. Caixin private surveys and trade data are due, offering a cross-check on the official activity readings. Sentiment in Hong Kong will remain closely tied to global AI-share direction and southbound flows.

In Singapore, attention turns to the local banks as the second-quarter results season approaches, with DBS, OCBC, and UOB due to report in the coming weeks; NIM trajectory, fee income, and dividend guidance will be in focus. Regional PMIs and the broader ASEAN earnings flow will also guide sentiment.

🗓️ Overarching Watchpoint

The July U.S. jobs report is the week’s key binary risk: a hot print would harden the case for a September rate hike and could extend the long-end yield surge, pressuring rate-sensitive equities globally, while a soft reading would ease tightening fears and support the broad risk rally.

 

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

AI Doubts and Oil: Wall Street Slips, Asia Climbs

For the week of Jul 24, global markets diverged sharply as renewed scrutiny of AI-related spending and a fresh surge in oil prices drove a risk-off tone across Western equities, even as state-backed buying lifted Chinese shares. In the U.S., disappointing big-tech cash-flow guidance and a jump in Treasury yields sent major indexes lower, led by technology. In China and Hong Kong, coordinated state support and record ETF inflows powered a rebound in semiconductor and technology names despite a Friday pullback. In Singapore, gains in shipbuilders and firm bank shares carried the Straits Times Index higher even as REITs and property counters lagged.

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

 

🇺🇸 United States

Most major U.S. indexes finished lower as concerns over the returns on heavy AI investment and a sharp rise in oil prices weighed on sentiment. The technology-heavy Nasdaq Composite (COMP) fell 2.13% to lead declines, while the S&P 500 (SPX) eased 0.61% and the Dow Jones Industrial Average (DJI) slipped 0.38%. Declines in Alphabet and Tesla after their results amplified broader worries over big tech's elevated capital spending and weaker cash flow.

Major Indices – Weekly Performance

- Dow Jones Industrial Average (DJI): -0.38%

- S&P 500 (SPX): -0.61%

- Nasdaq Composite (COMP): -2.13%

Key Highlights and Outlook

1️⃣ AI Spending Scrutiny Rattles Big Tech

Investor focus shifted from AI capital expenditure toward monetization and returns. Alphabet beat expectations with cloud revenue up 82% year over year, but its raised 2026 capex guidance of USD 195–205 billion overshadowed the print. Weak cash flow at Alphabet and Tesla fuelled broader concern over whether heavy AI investment will translate into profits.

2️⃣ Oil Surge Reignites Inflation Fears

A re-escalation in the U.S.–Iran conflict pushed crude back toward USD 100, reversing much of the post-ceasefire relief. Houthi attacks on Red Sea shipping threatened a key alternative to the Strait of Hormuz. The move lifted energy shares but pressured travel- and consumer-related industries and renewed inflation concerns.

3️⃣ Treasury Yields Break Higher

The 10-year Treasury yield climbed above 4.70% for the first time since January 2025 before dipping to about 4.68% on Friday. Rising oil and sticky inflation stoked expectations that the Fed could raise rates in the near term. Higher yields pressured bond prices and weighed on richly valued equities.

4️⃣ Jobless Claims Hit 1969 Low

Initial jobless claims fell to 187,000 for the week ended July 18, the lowest since 1969 and well below the roughly 215,000 consensus. Continuing claims edged down to 1.796 million. The stable labour market gives hawkish Fed members more room to prioritise the inflation mandate ahead of Wednesday's decision.

5️⃣ Services Lead PMI to Eight-Month High

The S&P Global Flash U.S. Composite PMI rose to 53.6 in July from 51.9, an eight-month high, as services activity accelerated to 53.6 and offset softer manufacturing at 53.8. The report flagged intensifying pressures, with input-cost inflation at a 14-month high and the most severe supplier delays in nearly four years.

6️⃣ Fed Seen on Hold, September Live

Edward Jones expects the Fed to hold at 3.50%–3.75% on Wednesday, though a dissent is possible. September looks like a live meeting, with markets fully pricing one quarter-point hike by then should oil pressures persist. The firm raised its 10-year yield range to 4.5%–5.0%, citing a higher-for-longer backdrop.

S&P 500 Sectors in Focus

Energy was the standout sector, buoyed by the sharp rise in oil prices amid Middle East tensions, with defensive and cyclical corners such as Utilities, Industrials and Materials also advancing. In contrast, Consumer Discretionary was the weakest sector, followed by Communication Services, as AI-spending concerns and weakness in growth-oriented, technology-adjacent names dragged those areas lower. Technology and Financials finished only marginally higher, underscoring the rotation away from crowded growth trades.

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

Technical Snapshot

The SPX and COMP both closed the week lower, pressured by heavy selling in mega-cap technology, while the DJI proved more resilient on strength in energy and defensives. Rising yields and oil remain the key overhangs as the market awaits Wednesday's Fed decision. On the charts, SPX, Nasdaq and DJI are drifting into a sideways consolidation after recent highs, with momentum cooling as breadth narrows.

📊 Weekly charts:

- DJI weeklychart

- SPX weeklychart

- Nasdaq weekly chart

 

🇨🇳 China / Hong Kong

China equities advanced despite a broad regional sell-off on Friday, when renewed AI-valuation concerns and higher oil prices weighed on sentiment. The CSI 300 rose 2.65%, the Shanghai Composite (SSE) gained 1.33% and the Hang Seng Index (HSI) added 1.63% in local-currency terms, with state-backed purchases driving a sharp early-week rebound in semiconductor and technology shares. Some gains were pared as valuation concerns resurfaced and crude traded around USD 100. (Refer to the major indices' weekly performance tables above.)

Major Indices – Weekly Performance

- CSI 300: +2.65%

- Shanghai Composite (SSE): +1.33%

- Hang Seng Index (HSI): +1.63%

Key Highlights and Outlook

1️⃣ State Support Extends to Tech Shares

State-owned platforms China Reform Holdings and China Chengtong Holdings disclosed combined equity purchases of nearly RMB 60 billion. The ChinaAMC STAR 50 ETF drew a record RMB 13.8 billion of inflows, and major insurers pledged more long-term equity investment. The STAR 50 Index surged 10.7% on Tuesday before paring gains, underscoring continued volatility in AI-related shares.

2️⃣ State Council Urges Faster Fiscal Execution

Beijing called for stronger budget management and more effective fiscal spending to meet annual growth targets. First-half general public budget expenditure rose just 1.5% year over year, while government-fund spending fell 16.4%. The PBOC made a net RMB 100 billion MLF injection, its largest in five months, ahead of the Politburo meeting — signalling targeted support rather than sweeping stimulus.

3️⃣ LPR Held for 14th Straight Month

The PBOC left its one-year and five-year Loan Prime Rates unchanged, the 14th consecutive month on hold. Maybank KE notes the steady stance supports stabilising net interest margins, a positive backdrop for China Construction Bank. The measured tone reinforces expectations of targeted easing over broad rate cuts.

4️⃣ Copper Strength and Consumer Rotation

Maybank KE highlights that China's copper prices hit a more-than-one-year high after tax reforms tightened scrap supply, benefiting Jiangxi Copper. On the growth side, Xiaomi raised its full-year smartphone shipment target on easing memory-chip costs, while Anta Sports stands to gain share after Nike ended its Topsports partnership.

5️⃣ July Rotation Into Internet Names

Maybank KE observes that China equities rallied in July as investors rotated from crowded AI-hardware plays into China internet stocks. The move may extend, though volatility could stay elevated amid an uncertain macro backdrop. The house favours a barbell of high-yield defensives and selective growth opportunities.

Technical Snapshot

The HSI extended its recovery on state buying and strength in financials and select cyclicals, though breadth was uneven as large internet platforms lagged — NetEase and Tencent were the heaviest constituent decliners. Onshore benchmarks outperformed, led by the CSI 300 as semiconductor and technology names rebounded. Near term, the index looks to consolidate recent gains, with oil prices and AI-valuation swings the key factors.

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

📊 Weekly charts:

- SSE weekly chart

- HSI weeklychart

 

🇸🇬 Singapore

The Straits Times Index (STI) rose 1.43% over the week to 5,588.34, extending its year-to-date advance to above 20% — among the strongest in the region. Gains were led by shipbuilders, with YZJ Shipbuilding and Seatrium the top performers, while the local banks firmed. Property counters and several S-REITs lagged, capping the index's advance.

Major Indices – Weekly Performance

- Straits Times Index (STI): +1.43%

Key Highlights and Outlook

1️⃣ Shipbuilders Lead the Index Higher

YZJ Shipbuilding (BS6) rose 10.19% and Seatrium (5E2) gained 7.04% to top the STI this week, extending a strong run for the marine and offshore names. The two shipbuilders were the standout performers and helped offset weakness among property and REIT counters.

2️⃣ Banks Firm Ahead of Results Season

The three local lenders advanced, with DBS (D05) up 2.75%, UOB (U11) up 2.00% and OCBC (O39) up 1.86%. The gains came ahead of the second-quarter earnings season, with all three banks due to report over the coming weeks.

3️⃣ REITs and Property Counters Lag

S-REITs were mixed to weaker, with Keppel DC REIT (AJBU) down 3.02% and CapitaLand Ascendas REIT (A17U) and the Mapletree trusts also lower — a soft patch consistent with the week's rise in global bond yields. Among developers, City Developments (C09) fell 2.86% and UOL (U14) slipped 2.08%.

4️⃣ Breadth Mixed as Index Grinds Higher

Advancers and decliners were fairly balanced across the STI, with strength in shipbuilders, banks and ST Engineering (S63, +1.63%) offset by weakness in REITs, developers and DFI Retail (D01), the worst performer at −4.72%. The index's steady climb left its year-to-date gain well ahead of regional peers.

Technical Snapshot

The STI closed the week near 5,590, sustaining its uptrend and a year-to-date gain above 20%. Momentum remains constructive, led by banks and shipbuilders, though a heavy REIT and property complex could cap further upside if yields stay elevated. The index looks to consolidate its gains, with global risk sentiment and the Fed decision the near-term guides.

(Refer to the STI weekly performance table below.)

📊 Weekly charts:

- STI weekly chart

 

📅 Week Ahead (27–31 Jul 2026)

In the U.S., the Federal Reserve's policy decision on Wednesday headlines the week; Edward Jones expects a hold at 3.50%–3.75%, though the statement and any dissents will be scrutinised for a September tilt. A heavy slate of mega-cap technology earnings follows Alphabet, with Amazon, Meta and Microsoft due to report, keeping the AI-monetization debate in focus. June PCE inflation and the first read on second-quarter GDP round out a data-rich week.

In China and Hong Kong, the late-July Politburo meeting takes centre stage as investors look for the economic-policy tone for the second half. Official July PMIs are due at month-end and will test the durability of recent momentum. Continued state-support signals and any follow-through in AI and semiconductor names will guide sentiment.

In Singapore, attention turns to the approaching second-quarter results season, with the three local banks set to report over the following weeks and REITs likely to stay sensitive to the yield backdrop. Regionally, the path of oil prices and Middle East headlines will remain a key swing factor for energy-importing markets.

🗓️ Overarching Watchpoint

The Fed's Wednesday decision is the week's biggest binary risk: a straightforward hold would likely steady sentiment, but any hawkish signal that validates September rate-hike bets — especially if oil holds near USD 100 — could pressure richly valued equities and push yields higher still.

 

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

Inflation Cools, Tech Cracks: Rotation Sweeps Global Markets

For the week ended Jul 17, global equities delivered a week of sharp contrasts as a broad rotation out of AI and semiconductor names collided with the most encouraging U.S. inflation data in over six years. U.S. stocks retreated as heavy selling in large-cap technology overshadowed cooler-than-expected inflation and strong bank earnings. Mainland Chinese markets fell steeply on AI valuation concerns and a second-quarter GDP miss, even as Hong Kong outperformed on resilient Southbound buying. Singapore quietly extended its year-to-date leadership, with the Straits Times Index grinding higher despite the global tech turbulence.

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

 

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🇺🇸 United States

Market Overview

Major U.S. indexes closed lower in a reversal of the prior week's large-cap tech outperformance, with the Nasdaq Composite (COMP) sliding -2.90% and the S&P 500 (SPX) losing -1.55%, while the Dow Jones Industrial Average (DJI) fell a more modest -0.93%. Information technology and communication services posted the steepest losses on selling in semiconductor, memory and AI infrastructure shares, while energy advanced alongside oil prices amid escalating U.S.–Iran tensions.

Index Weekly Performance

- Dow Jones Industrial Average (DJI): -0.93%

- S&P 500 (SPX): -1.55%

- Nasdaq Composite (COMP): -2.90%

 

Key Highlights and Outlook

1️⃣ CPI Posts Largest Monthly Decline Since April 2020

Headline CPI fell 0.4% month-over-month in June, well below the 0.1% decline expected, driven by a 5.7% drop in energy prices. Year-over-year inflation slowed to 3.5% from 4.2%, with core easing to 2.6%. PPI also surprised lower, falling 0.3% for the month.

2️⃣ Rate-Hike Odds Collapse; Fed Seen on Hold

The market-implied probability of a July rate hike dropped from roughly 40% to about 14% after the inflation reports. The Fed held rates at 3.5%–3.75% in June with a divided FOMC; rate cuts look off the table this year, but the bar for hikes remains high heading into the July 29 meeting.

3️⃣ Banks Kick Off Q2 Earnings With Broad Beats

JPMorgan Chase, Goldman Sachs and Citi topped consensus estimates, pointing to resilient loan growth, credit quality and consumer spending. Expectations for the season are lofty: S&P 500 Q2 earnings growth forecasts have been revised up from about 14% to around 25%, led by energy and technology.

4️⃣ Semiconductor and AI Infrastructure Selloff Deepens

Chip, memory and AI infrastructure shares sold off despite encouraging results from Taiwan Semiconductor and ASML. The SOX Semiconductor index is now down about 20% from its June highs but still up roughly 64% year-to-date, while software and cloud names like Microsoft and Salesforce showed signs of recovery.

5️⃣ AI Capex Guidance Is the Key Earnings Test

AI capex is expected to grow about 75% this year to USD 700–800 billion, before slowing to 25% in 2027 and 6% in 2028. Investors will watch whether hyperscalers reaffirm or exceed this guidance, and whether the spending is translating into revenue returns.

6️⃣ Consumer Resilient, Housing Still Soft

Retail sales rose 0.2% in June (+0.7% ex-gas stations) and initial jobless claims fell to 208,000, the lowest since early May. Housing lagged: pending home sales dropped 5.4%, homebuilder confidence declined, and the 30-year mortgage rate climbed to 6.55%, the highest since August 2025.

 

S&P 500 Sectors in Focus

Sector performance split cleanly along the rotation. Energy was the week's clear leader, advancing alongside oil prices amid U.S.–Iran tensions, with real estate and consumer staples also firmly higher as defensives held up. Technology was by far the weakest sector, dragged down by the semiconductor and AI infrastructure selloff, with communication services, consumer discretionary and industrials also in the red.

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

Technical Snapshot

The SPX pulled back -1.55% to 7,457, while the Nasdaq's -2.90% decline confirmed that leadership has rotated away from the AI complex for now. The DJI held up best, and all three benchmarks remain up 8.5%–9.8% year-to-date, keeping the broader uptrend intact. Near-term direction hinges on whether Q2 tech earnings and AI capex guidance can arrest the semiconductor slide. Technically, both SPX and Nasdaq have been in sideway consolidation over the past two months, while DJI has been in sideway consolidation over the past three weeks.

📊 Weekly charts:

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

 

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🇨🇳 China / Hong Kong

Market Overview

China equities diverged sharply in a volatile week. A renewed sell-off in AI, memory-chip and semiconductor shares drove steep mainland losses, with the CSI 300 falling -5.26% and the Shanghai Composite (SSE) sliding -5.81%, while the Hang Seng Index (HSI) gained +1.60% on mainland buying through Stock Connect. A strong Tuesday rebound on better-than-expected trade data was more than reversed by Friday's rout on AI valuation concerns.

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

Index Weekly Performance

- CSI 300: -5.26%

- Shanghai Composite (SSE): -5.81%

- Hang Seng Index (HSI): +1.60%

Key Highlights and Outlook

1️⃣ Q2 GDP Misses at 4.3%, Underscoring Uneven Growth

GDP grew 4.3% year-over-year, below the 4.5% consensus and down from 5.0% in Q1, though first-half growth of 4.7% stayed within the 4.5%–5.0% target range. Industrial production rose a firm 5.3%, but fixed asset investment fell 5.7% in the first half, including an 18% slump in property.

2️⃣ Exports Surge 27% as External Demand Carries the Economy

June exports jumped 27.0% year-over-year, well above expectations, with imports up 36.0% and the trade surplus widening to USD 125.6 billion. Higher semiconductor prices and strong overseas demand for data-processing equipment and automobiles drove the gains, contrasting sharply with weak household consumption and property activity.

3️⃣ AI Valuation Concerns Trigger Friday Rout on the Mainland

Friday's sell-off was fuelled by concerns over elevated AI valuations and intensifying competition among Chinese large language model developers. Mainland losses narrowed late in the session as trading picked up in large index ETFs often favoured by state-backed investors, hinting at official support.

4️⃣ Hong Kong Outperforms on Southbound Flows

The HSI's +1.60% gain was supported by Stock Connect buying and strength in large internet platforms, automakers, healthcare and selected property names. OOIL (+12.58%), BYD Electronic (+10.20%) and Longfor (+9.34%) led constituents, while SMIC (-15.00%) and Lenovo (-12.50%) bore the brunt of the chip selloff.

5️⃣ Targeted Policy Over Broad Stimulus (Maybank KE)

Maybank KE expects Beijing to maintain a targeted policy stance prioritising AI, energy infrastructure and strategic industries rather than broad-based stimulus, favouring beneficiaries of industrial upgrading such as CATL, Lenovo, CITIC Securities and Henderson Land. June credit data stayed subdued, with new yuan loans of CNY 1.61 trillion missing the CNY 2.0 trillion consensus.

Technical Snapshot

The HSI added +1.60% to close at 24,562, extending its divergence from the mainland even as its year-to-date return remains modestly negative at -4.17%. The SSE's -5.81% weekly plunge to 3,764 marked a decisive break lower, dragging the index into negative territory for the year. Whether state-linked ETF buying and Southbound flows can stabilise mainland sentiment is the key near-term question.

📊 Weekly charts:

SSE weekly chart

HSI weekly chart

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🇸🇬 Singapore

Market Overview

The Straits Times Index (STI) rose +0.73% to close at 5,509.43, quietly outperforming both Wall Street and mainland China for the week and extending its year-to-date gain to +18.58%. Breadth was mixed beneath the surface, with property, defensive and REIT names leading while industrials and tech-linked counters lagged.

(Refer to the STI weekly performance table below.)

Index Weekly Performance

- Straits Times Index (STI): +0.73%

 

Key Highlights and Outlook

1️⃣ STI Extends Year-to-Date Leadership

The STI's +0.73% advance to 5,509.43 came despite the global tech shakeout, underlining Singapore's relative-safety appeal. At +18.58% year-to-date, the index continues to outpace the S&P 500 (+8.94%) and the Hang Seng (-4.17%) by a wide margin.

2️⃣ Property and Defensive Names Lead the Advance

HK Land (+4.51%) topped the constituent table, followed by Keppel DC REIT (+3.57%), SATS (+3.12%) and Mapletree PACT (+2.29%). ThaiBev (+2.25%) and JMH (+1.98%) added to the defensive tilt as investors rotated away from cyclical and tech-exposed counters.

3️⃣ Banks Diverge Sharply

OCBC surged +4.12%, extending its standout +44.53% year-to-date run, and DBS added +2.14%. UOB was the outlier, sliding -4.30% for the week, though it remains up +21.14% for the year. The three banks' dispersion was the widest among the index heavyweights.

4️⃣ Industrials and Tech-Linked Counters Lag

Sembcorp Industries (-5.63%), Venture (-5.19%) and ST Engineering (-4.84%) were the week's biggest decliners, echoing the global rotation out of industrial and tech-adjacent names. SGX eased -1.49% but retains a strong +40.80% year-to-date gain.

Technical Snapshot

The STI closed at 5,509, holding comfortably above the 5,500 mark after a steady +0.73% weekly gain. The index's resilience amid heavy global tech selling reinforces the strength of its 2026 uptrend, now +18.58% year-to-date. A sustained hold above 5,500 would keep the path of least resistance pointing higher.

📊 Weekly charts:

STI weekly chart

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📅 Week Ahead (20–24 Jul 2026)

In the U.S., Q2 earnings season broadens out beyond the banks, with investors focused on whether technology companies reaffirm lofty AI capex guidance and demonstrate revenue returns on that spending. With Q2 S&P 500 earnings growth forecasts revised up to around 25%, the bar for delivery is high. The July 29 FOMC meeting looms the following week, with hike odds sharply reduced after the soft CPI print.

In China and Hong Kong, markets will watch for policy signals following the Q2 GDP miss, with Beijing expected to lean on targeted support for AI, energy infrastructure and strategic industries rather than broad stimulus. Whether state-linked ETF buying and Southbound flows can steady mainland sentiment after Friday's AI-driven rout will set the near-term tone.

In Singapore, the STI's ability to hold above 5,500 amid global tech volatility will be in focus, alongside continued rotation into defensive, property and REIT names. Dispersion among the three banks bears watching after a week of unusually wide divergence.

🗓️ Overarching Watchpoint

The single biggest binary risk of the week is whether technology earnings — and AI capex guidance in particular — can arrest the global semiconductor selloff. Delivery on lofty forecasts could see tech resume leadership; a disappointment risks extending the rotation and deepening the drawdown across U.S. and mainland Chinese markets.

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