AI Sets the Direction: Hong Kong and Singapore Surge

For the week of Jul 10, markets navigated a week in which renewed U.S.–Iran tensions lifted oil prices, but equities largely looked through the geopolitical noise and stayed focused on AI momentum ahead of the second-quarter earnings season. U.S. indices closed mixed, as a late-week rebound in semiconductor and AI-related shares lifted the Nasdaq and S&P 500 while the Dow lagged. Greater China diverged sharply, with Hong Kong outperforming on strength in internet heavyweights even as mainland benchmarks slipped on late-week profit-taking in semiconductors. Singapore stole the regional spotlight, as record-setting bank stocks powered the Straits Times Index to fresh all-time highs.

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

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🇺🇸 United States

Market Overview

Major U.S. indices closed the week mixed. A late-week rebound in semiconductor and AI-related shares helped the Nasdaq Composite (COMP) gain 1.74% and the S&P 500 (SPX) advance 1.23%, overcoming earlier volatility driven in part by higher oil prices and renewed U.S.–Iran hostilities, while the Dow Jones Industrial Average (DJI) declined 0.50%. Growth stocks solidly outpaced value, and trading volumes stayed light ahead of a busy week of earnings, inflation data and retail sales. 

Index Weekly Performance

- Dow Jones Industrial Average (DJI): -0.50%

- S&P 500 (SPX): +1.23%

- Nasdaq Composite (COMP): +1.74%

 

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Key Highlights and Outlook

1️⃣ Fed Minutes Reveal Divergence Over Policy Path

Minutes from the Federal Reserve's June meeting showed a few policymakers saw a case for raising rates, though all ultimately backed leaving borrowing costs unchanged. Officials were divided over the path for the rest of the year amid elevated uncertainty, and most supported removing language implying an easing bias — a somewhat hawkish signal.

2️⃣ Geopolitics a Wildcard, Not a Game Changer

Iran resumed attacks on shipping in the Strait of Hormuz, the U.S. launched fresh strikes and revoked Iranian oil waivers, and Iran hit bases in Kuwait and Bahrain. Oil briefly rose 5% to about USD 72 per barrel — well below March's USD 120 peak — and equities proved far less sensitive to oil spikes than earlier this year.

3️⃣ Economic Data Steady in a Light Week

The ISM services PMI eased to 54.0 in June, a 24th straight month in expansion, with the employment component returning to growth. Initial jobless claims dipped to 215,000, while existing home sales fell 2.4% to a 4.09 million annual rate as elevated prices and borrowing costs continued to squeeze affordability.

4️⃣ Treasury Yields Climb on Oil and Hawkish Minutes

U.S. Treasuries generated negative returns as rising oil prices and the Fed minutes pushed yields higher across most maturities, with the 10-year yield up to about 4.56% from 4.49%. Investment-grade corporates underperformed, and high yield sentiment weakened midweek on revived inflation concerns before stabilising into the close.

5️⃣ A High Bar Into Q2 Earnings Season

S&P 500 earnings are expected to grow 23% year over year — a second straight quarter above 20% — on 12% revenue growth, with estimates unusually revised higher into the season. Technology and energy are set to drive roughly 80% of total earnings growth, so the focus shifts to whether the pace of improvement is still accelerating.

6️⃣ Second-Half Leadership Set to Broaden

Strategists expect rotations within and beyond technology to define the second half: stay exposed to AI but complement it with mid-caps, industrials and communication services, where valuations are less stretched. Returns are likely to become less momentum-driven and more dependent on earnings delivery, valuation discipline and sector rotation.

 

S&P 500 Sectors in Focus

Information technology led sector performance for the week, with energy and communication services also posting strong gains as AI leadership reasserted itself and higher crude prices supported energy names. Materials and health care were the weakest performers, alongside softness in defensives such as consumer staples and utilities. The pattern mirrored the earnings picture, where technology and energy have driven the bulk of upward estimate revisions heading into reporting season.

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

Technical Snapshot

The Nasdaq and S&P 500 closed the week near record territory after Friday's rebound in semiconductors restored the prevailing uptrend. The Dow lagged, slipping 0.50% as the rise in the 10-year Treasury yield toward 4.56% weighed on rate-sensitive and value pockets. With earnings season starting, the near-term bias stays constructive provided the benchmarks hold their recent breakout zones and yields remain contained.

📊 Weekly charts:

- DJI weekly chart

- SPX weekly chart

- Nasdaq weekly chart

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🇨🇳 China / Hong Kong

Market Overview

China equities diverged during the week. Mainland benchmarks declined despite a sharp but narrow rally in AI, semiconductor and technology self-sufficiency plays, with the CSI 300 falling 1.27% and the Shanghai Composite (SSE) down 1.17%, while the Hang Seng Index (HSI) surged 3.53% on strength in large internet stocks. Divergence within the technology complex widened, as discounted capital raisings and volatility among pure-play AI developers offset the sector's earlier gains. (Refer to the major indices' weekly performance tables above.)

Index Weekly Performance

- CSI 300: -1.27%

- Shanghai Composite (SSE): -1.17%

- Hang Seng Index (HSI): +3.53%

 

Key Highlights and Outlook

1️⃣ Hong Kong Outperforms on Internet Heavyweights

The HSI's advance was powered by the internet complex, with Alibaba jumping 17.11%, Lenovo up 14.93%, Xiaomi gaining 12.54% and Meituan adding 9.92%, while health care and materials shares lent support on Friday. Laggards were concentrated in consumer names, with WH Group down 9.98% and Sunny Optical off 6.91%.

2️⃣ Mainland AI Rally Reverses on Profit-Taking

China-specific AI catalysts — ChangXin Memory Technologies' upcoming IPO and reports of proprietary domestic AI chips — lifted technology sentiment early in the week, but mainland semiconductor stocks reversed sharply on Friday amid reported profit-taking. The pullback dragged the CSI 300 and Shanghai Composite into weekly losses despite the narrow tech rally.

3️⃣ Inflation Split: Firm Upstream, Soft Consumer

June CPI rose 1.0% year over year, slightly below consensus and slowing from May's 1.2%, with core inflation edging down to 1.0% on soft food and travel-related prices. Producer prices jumped 4.1% — the fastest pace since July 2022 — on stronger nonferrous metals, petroleum and coal, underscoring the upstream-versus-consumer divide.

4️⃣ PBOC Stays Supportive but Targeted

The PBOC's second-quarter Monetary Policy Committee pledged an appropriately accommodative stance, reasonably ample liquidity and stronger support for domestic demand, technology innovation and SMEs, alongside lower overall financing costs. It acknowledged insufficient domestic demand and structural imbalances, but stopped short of signalling any broad-based stimulus programme.

5️⃣ Rotation Into Value: Healthcare, Property and Energy

Maybank KE flags fund rotation out of crowded technology into value segments: within healthcare, Jiangsu Hengrui is favoured on China's preliminary NRDL boosting reimbursement coverage; Link REIT is the preferred Hong Kong property name on stabilising rental reversions; and CNOOC screens as a compelling value play on higher crude, low costs and attractive shareholder returns.

Technical Snapshot

The HSI's 3.53% surge carried it back above the 24,000 mark to close at 24,175, though the index remains down 5.68% year to date. The Shanghai Composite slipped back below the 4,000 level after Friday's semiconductor sell-off, ending at 3,996. Near-term direction hinges on the upcoming Q2 GDP release, with 24,000 now the first support for the HSI and 4,000 the pivot for the SSE.

📊 Weekly charts:

- SSE weekly chart

- HSI weekly chart

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

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🇸🇬 Singapore

Market Overview

The Straits Times Index (STI) surged 4.29% to close at a record 5,469.29, its strongest week of the year, extending year-to-date gains to 17.72%. The rally was overwhelmingly bank-led, with strong institutional inflows pushing all three local lenders to fresh peaks — DBS crossed the S$70 mark for the first time — as investors positioned ahead of the second-quarter results season and first-half dividend payouts. (Refer to the major indices' weekly performance tables above.)

Index Weekly Performance

- Straits Times Index (STI): +4.29%

 

Key Highlights and Outlook

1️⃣ Banks Power the STI to Fresh Records

UOB soared 10.29%, OCBC gained 8.38% and DBS added 5.53%, together doing the heavy lifting in the index's 225-point weekly advance. DBS topped S$70 for the first time while OCBC and UOB also hit new highs, driven by institutional inflows ahead of the banks' Q2 reporting season in early August.

2️⃣ Broad Blue-Chip Participation Beyond the Banks

Gains extended well beyond financials: Keppel rose 5.71%, Wilmar advanced 3.49%, CapitaLand Investment added 2.01% and SIA gained 1.18%. Most REITs eked out modest gains, keeping breadth respectable even as the banks dominated headline performance.

3️⃣ Sembcorp and Singtel Lag the Rally

Sembcorp Industries fell 5.02%, the index's worst performer, while Singtel slipped 1.57% and Venture eased 0.70%. JMH declined 1.13%, leaving the losers' column short and concentrated — a sign of how one-sided the week's flows into the financial heavyweights were.

4️⃣ Q2 GDP Advance Estimate Due 14 July

MTI releases advance second-quarter GDP estimates on Tuesday, 14 July, the next key checkpoint for the market after Q1's 6.0% year-on-year expansion. The official 2026 growth forecast stands at 2.0–4.0%, though authorities have flagged significantly elevated downside risks from the external environment.

Technical Snapshot

The STI's 4.29% surge to 5,469.29 marks a decisive breakout above its early-July record highs, with the 5,400 level now turning into first support. Momentum is strong but stretched after a 225-point weekly gain, leaving room for consolidation. The path of least resistance stays higher into the GDP release, provided the banks hold their newly established highs.

📊 Weekly charts:

- STI weekly chart

(Refer to the STI weekly performance table below.)

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📅 Week Ahead (13–17 July 2026)

In the U.S., second-quarter earnings season unofficially kicks off with the banks on 14 July, followed by industrials and mega-cap technology later in the month. Inflation data and the June retail sales report are also due, making it the most consequential macro week of the month. With estimates already revised higher, results that merely meet expectations may not be enough to extend the rally.

In China, attention turns to second-quarter GDP and June activity data for a broader assessment of growth momentum after the mixed inflation readings. Investors will also watch whether Friday's sharp reversal in mainland semiconductor stocks extends, given the increasingly divergent performance within the technology sector.

In Singapore, MTI releases advance Q2 GDP estimates on Tuesday morning, with the MAS July policy review also in focus — economists broadly expect monetary policy to be left unchanged. Bank-share momentum will be the key market barometer following the record-setting week.

🗓️ Overarching Watchpoint

The collision of U.S. earnings season kickoff with inflation data is the week's biggest binary risk. With S&P 500 earnings expected to grow 23% and yields already rising on higher oil, a hot inflation print or bank results that merely meet elevated expectations could unwind the market's AI-driven momentum — while upside surprises would validate the second-half broadening thesis.

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

Soft Jobs, Firm Markets: Hong Kong Leads Global Rebound

Global equities pushed higher in a holiday-shortened week as cooling U.S. labor data tempered rate-hike fears and risk appetite returned across Asia. In the U.S., the major indices advanced after June payrolls missed expectations, dragging the odds of a July Fed hike sharply lower. Hong Kong staged a powerful rebound from June's slump, led by healthcare, biotech and platform names, while mainland benchmarks were mixed as a global technology-led sell-off hit semiconductor and AI shares. In Singapore, the STI extended its record run, supported by ST Engineering and the banks ahead of early-August results.

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🇺🇸 United States

Market Overview

U.S. equities finished the holiday-shortened week higher, with the Dow Jones Industrial Average (DJI) gaining +1.97% to 52,900.07, the S&P 500 (SPX) adding +1.76% to 7,483.24, and the Nasdaq Composite (COMP) rising +2.12% to 25,832.67. Small- and mid-cap benchmarks lagged and finished lower, and markets were closed on Friday in observance of Independence Day.

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

Index Weekly Performance

- Dow Jones Industrial Average (DJI): +1.97%

- S&P 500 (SPX): +1.76%

- Nasdaq Composite (COMP): +2.12%

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Monthly Performance — June 2026

June closed on a mixed note for U.S. equities. The Dow Jones Industrial Average rose +2.52% for the month, while the S&P 500 slipped -1.06% and the Nasdaq Composite fell -2.81%, reflecting the defensive rotation out of technology that dominated the back half of the month. Year-to-date, all three benchmarks remain firmly in positive territory.

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

Key Highlights and Outlook

1️⃣ June Payrolls Miss Marks Softest Print Since February

Nonfarm payrolls rose just 57,000 in June against expectations of around 110,000, with April and May both revised lower. The unemployment rate ticked down to 4.2% and wage growth held at 3.5% YoY — a cooling but not cracking labor market that keeps the Goldilocks narrative intact.

2️⃣ July Rate-Hike Odds Slide as Fed Stays Split

The probability of a July hike fell from roughly 29% to 18% after the payrolls miss, per CME FedWatch. The June FOMC held rates unanimously, but the committee remains evenly split between one to two hikes and steady-to-lower rates for 2026, with Chair Kevin Warsh prioritising inflation.

3️⃣ Private Hiring and Job Openings Send Mixed Signals

ADP reported a weaker-than-expected 98,000 private payroll gain in June, concentrated in services and small firms. JOLTS openings, however, rose to 7.594 million in May — the highest since May 2024 — with hiring and quits rates steady, pointing to gradual cooling rather than deterioration.

4️⃣ Manufacturing Expands a Sixth Month; Confidence Subdued

ISM manufacturing PMI eased to 53.3 in June, missing estimates but marking a sixth straight month of expansion, with prices paid falling sharply to 73.0. Consumer confidence printed 91.2, improving slightly, though respondents' assessment of job availability hit its weakest level in over five years.

5️⃣ Treasury Yields Back Up Despite Soft Jobs

The 10-year Treasury yield rose from 4.37% to about 4.49% by Thursday, pressuring bonds and rate-sensitive equities. Investment-grade credit modestly outperformed Treasuries with oversubscribed new issues, while high yield sentiment was mixed — cautious secondary tone offset by resilient primary issuance.

6️⃣ WTI Slips Below $70 as Hormuz Traffic Recovers

Crude retreated to pre-conflict levels as U.S.–Iran negotiations progressed and Strait of Hormuz traffic picked up. Pump prices typically lag crude by four to eight weeks, so easing gasoline costs into autumn would offer consumers — and the Fed — welcome relief on headline inflation.

S&P 500 Sectors in Focus

Rotation into cyclicals and rate-relief plays defined the week. Financials led the S&P 500 sector table, followed by communication services and consumer discretionary, with health care not far behind. On the losing side, real estate, energy and utilities finished lower, while technology slipped modestly as investors trimmed the year's biggest winners.

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

Technical Snapshot

The DJI printed fresh record highs above 52,900, confirming the leadership rotation toward value and cyclicals. The SPX is consolidating just below its late-June peak near 7,500, while the Nasdaq is rebuilding after June's pullback and holding above 25,500. The path of least resistance remains higher while payroll-driven rate relief holds, though rising long-end yields are the key technical headwind.

📊 Weekly charts:

DJI weeklychart

SPX weeklychart

Nasdaqweekly chart

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🇨🇳 China / Hong Kong

Market Overview

Chinese equities were mixed as a sharp global technology-led sell-off weighed on mainland semiconductor and AI-related shares, offsetting support from better-than-expected manufacturing data and improved short-term liquidity. The CSI 300 fell -0.54%, while the Shanghai Composite (SSE) edged up +0.41% to 4,043.64. Hong Kong outperformed on rotation into non-tech areas, with the Hang Seng Index (HSI) surging +2.99% to 23,350.03. 

Index Weekly Performance

- CSI 300: -0.54%

- Shanghai Composite (SSE): +0.41%

- Hang Seng Index (HSI): +2.99%

Key Highlights and Outlook

1️⃣ June PMIs Point to Resilient Manufacturing Activity

The official manufacturing PMI rose to 50.3 from 50.0, back in expansion on stronger production, new orders and continued high-tech strength, while the non-manufacturing gauge edged up to 50.2. The private RatingDog manufacturing PMI eased slightly to 51.7, underscoring an uneven recovery skewed toward high-tech and downstream segments.

2️⃣ PBOC Debuts Overnight Reverse Repos to Smooth Liquidity

The PBOC launched a new overnight reverse repo tool, injecting CNY 300 billion on Monday and CNY 600 billion on Tuesday at 1.25%, while the seven-day rate held at 1.4%. The move supports liquidity-sensitive sentiment but reads as a monetary framework refinement rather than the start of broad easing.

3️⃣ Healthcare, Biotech and Platforms Power the HSI Rebound

CSPC Pharma (+19.58%), Hansoh (+17.59%), Innovent Bio (+16.83%) and WuXi Bio (+13.68%) topped the constituent table, while BYD (+15.76%), Baidu (+12.30%) and Meituan (+11.44%) led a broad bounce in beaten-down platforms. Heavyweights Alibaba (+5.14%) and Tencent (+4.71%) posted more measured gains.

4️⃣ Tech Hardware Sell-Off Hits Mainland; Banks Lag in HK

The global technology-led sell-off dragged mainland semiconductor and AI names lower, pulling the CSI 300 down even as the broader tape rotated into non-tech areas. In Hong Kong, SMIC (-3.00%), Lenovo (-9.13%) and CITIC (-8.57%) fell, alongside mainland banks CCB (-5.81%), Bank of China (-4.94%) and ICBC (-2.87%).

5️⃣ Sell-Side Turns Constructive on Internet Names

Maybank's Dim Sum Weekly flags improving risk-reward in internet names on light positioning and a better earnings outlook after a weak 1H26, preferring NetEase (+9.55%) and Trip.com (+6.23%), and stays constructive on HKEX as a capital-connect beneficiary. It views the HK IPO lock-up overhang as manageable (~2% of annual turnover) but recommends profit-taking in Knowledge Atlas ahead of its lock-up expiry.

Technical Snapshot

The HSI reclaimed the 23,000 handle with a strong weekly candle after June's -9.14% slump, though it remains down -8.90% year-to-date; near-term resistance sits toward 23,800–24,000, with 23,000 now initial support. Mainland action is diverging, with the SSE holding above 4,000 while the CSI 300 slipped on the tech unwind. A decisive mainland break higher is needed to confirm the Hong Kong recovery has legs.

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

📊 Weekly charts:

SSE weekly chart

HSI weekly chart

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🇸🇬 Singapore

Market Overview

The Straits Times Index (STI) rose +1.01% to close at 5,244.29, extending its record-setting run and lifting year-to-date gains to +12.87%. Advances were led by ST Engineering and the three banks, offsetting weakness in Sembcorp Industries and the REITs. (Refer to the major indices' weekly performance tables below.)

Index Weekly Performance

- Straits Times Index (STI): +1.01%

Key Highlights and Outlook

1️⃣ ST Engineering Extends Its Defence-Led Advance

ST Engineering (S63) gained +4.23% to $10.85, taking year-to-date gains to +28.86% and cementing its place among the STI's top performers of 2026. Elevated global defence spending and a robust order book continue to underpin the re-rating.

2️⃣ Banks Firm Ahead of Early-August H1 Results

DBS (D05) rose +2.03%, OCBC (O39) +1.81% and UOB (U11) +1.11% as the trio drifted higher ahead of H1 results — DBS on 6 Aug and OCBC on 7 Aug, with UOB in the same window. Focus will turn to NIM resilience, fee momentum and dividend guidance.

3️⃣ Sembcorp Slumps to the Bottom of the Table

Sembcorp Industries (U96) tumbled -7.43%, by far the STI's worst performer, dragging its year-to-date return into negative territory. Keppel (BN4, -1.81%) also weakened, leaving the industrials-utilities pair as the week's clear laggards.

4️⃣ REITs Soften as U.S. Yields Back Up

CapitaLand Ascendas REIT (A17U) fell -1.97% and Frasers Centrepoint Trust (J69U) -1.75%, with most Mapletree vehicles flat to lower. The backup in the 10-year Treasury yield weighed on the rate-sensitive S-REIT complex, capping the STI's overall advance.

(Refer to the STI weekly performance table below.)

Technical Snapshot

The STI closed at a fresh record 5,244, holding comfortably above the 5,200 breakout level. Initial support sits at 5,150, then the 5,000 psychological zone, with momentum elevated but not yet at extremes. The uptrend remains intact while the index holds above 5,150.

📊 Weekly charts:

STI weeklychart

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📅 Week Ahead (6–10 Jul 2026)

In the U.S., minutes of the June FOMC meeting headline the calendar, with markets parsing the committee's even split for the balance of hike risk into the July decision. Jobless claims and Fed speakers will refine the post-payrolls rate path, while positioning builds ahead of the Q2 earnings season that kicks off with the big banks the following week.

In China and Hong Kong, June CPI and PPI plus the Caixin services PMI will test whether the mainland economy is stabilising. Follow-through in the healthcare and platform rally, alongside southbound flows via Stock Connect, will indicate whether the HSI rebound has legs.

In Singapore, attention turns to the advance Q2 GDP estimate due mid-month and regional trade data. With the STI at records and bank results approaching, watch whether S-REIT weakness deepens if U.S. yields continue to climb.

🗓️ Overarching Watchpoint

The June FOMC minutes are the week's key binary risk. A hawkish read on the committee's even split could reprice July hike odds sharply higher, lifting yields and pressuring the rate-relief rally — particularly rate-sensitive S-REITs and the fragile Hong Kong rebound.

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

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%

 

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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.

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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

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🇨🇳 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

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🇸🇬 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.

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🇺🇸 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% 

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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.)

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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

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🇨🇳 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

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🇸🇬 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.