For the week of Sep 11, global markets sold off as an escalating Middle East conflict pushed oil briefly above $100 a barrel and a hotter-than-expected August core CPI reading lifted the odds of a September Fed rate hike. U.S. equities retreated broadly, led by small- and mid-caps, as rising Treasury yields and fuel costs weighed on sentiment ahead of the Fed's policy decision. China and Hong Kong shares fell in sympathy, with Hong Kong underperforming the mainland as AI-related tech names swung sharply on dilution concerns. Singapore's Straits Times Index also retreated, tracking the regional risk-off tone as banks and property counters led the decline.
(Refer to the major indices'
weekly performance tables below.)
πΊπΈ United
States
Market Overview
U.S. equities finished the
holiday-shortened week broadly lower as an escalating Middle East conflict sent
oil prices sharply higher and lifted Treasury yields. The Dow Jones Industrial
Average (DJI) fell 1.57%, the S&P 500 (SPX) declined 0.80%, and the Nasdaq
Composite (COMP) held up best with a 0.66% loss, as small- and mid-cap names
underperformed the mega-cap-heavy benchmarks. Markets were closed Monday for
Labor Day, compressing a week dominated by inflation data and rate-hike
repricing.
Index Weekly Performance
- Dow Jones Industrial Average (DJI):
-1.57%
- S&P 500 (SPX): -0.80%
- Nasdaq Composite (COMP): -0.66%
Key Highlights and Outlook
1️⃣ Middle East Conflict Sends Oil Near $110
Attacks on Saudi energy
infrastructure and continued U.S.-Iran hostilities lifted oil sharply, with WTI
briefly topping $100 a barrel and Brent nearing $110 before easing late in the
week. The spike revived inflation concerns just as the Fed prepared to weigh
its next move, adding a fresh supply-side complication to an already delicate
policy backdrop.
2️⃣ Core CPI Reaccelerates, Fed Bets Jump
August core CPI rose 0.3%
month-over-month, the fastest pace since April, while headline inflation held
at 3.4% year-over-year. Wireless, airfare and software costs drove the upside
surprise. The market-implied probability of a September rate hike climbed to
roughly 87-90% by Friday, up sharply from earlier in the week.
3️⃣ Producer Prices Firm Ahead of CPI
Producer prices rose 0.4% in
August, accelerating from July's 0.1% gain and up 5.4% year-over-year, with
energy costs driving much of the increase. Core PPI rose a softer 0.2% on the
month but climbed to 4.6% annually, reinforcing the case that pipeline price
pressures were building even before Friday's CPI print.
4️⃣ Treasury Yields Climb on Inflation, Supply
The 10-year Treasury yield rose
to roughly 4.97% and the two-year climbed above 4.63% as investors priced in
firmer inflation and digested heavy issuance alongside a smaller-than-expected
buyback operation. Rising yields added to the week's headwinds for equities,
particularly rate-sensitive and higher-multiple sectors.
5️⃣ Consumer Sentiment Falls for Second Month
The University of Michigan's
preliminary September sentiment index dropped to 47.8 from 51.7, as resurgent
fuel prices and trade tensions weighed on households' outlook. Year-ahead
inflation expectations jumped to 4.6% from 4.0%, the highest reading since
June, even as labor market data showed little sign of deterioration.
6️⃣ Earnings Strength Offsets Macro Headwinds
Third-quarter S&P 500
earnings are tracking toward 27% year-over-year growth, extending a string of
double-digit gains and helping cushion sentiment against rising yields and oil.
Strategists note the Fed's current gap versus market rates looks narrower than
in 2022, favouring a pairing of mega-cap tech leadership with select cyclical
value exposure.
S&P 500 Sectors in Focus
Energy was the standout performer as the run-up in oil lifted producer names, with Communication Services and Technology also outperforming the broader market. Health Care and Materials lagged badly, while Real Estate, Consumer Staples, Financials, Utilities, Industrials and Consumer Discretionary all finished lower as rising yields pressured rate-sensitive groups. The narrow breadth of gainers against a broad list of decliners underscored how concentrated this week's pockets of strength were.
(Refer to the SPX sector ETF weekly performance table below.)
Technical Snapshot
The S&P 500 and Nasdaq
Composite pulled back toward near-term support after several weeks of gains,
while the Dow's steeper decline reflected weaker breadth beneath the surface.
Rising yields and oil prices added to short-term volatility ahead of the Fed's
policy decision. All three benchmarks remain in sideways consolidation just
below their recent highs, with a decisive break needed to confirm the next
directional move.
π Weekly charts:
π¨π³ China /
Hong Kong
Market Overview
China and Hong Kong equities
fell for the week, with Hong Kong underperforming the mainland. The CSI 300
declined 0.83%, the Shanghai Composite (SSE) fell 1.07%, and the Hang Seng
Index (HSI) dropped 3.30% in local-currency terms, as elevated oil prices and
rising U.S. Treasury yields weighed on regional risk appetite. Trading in
China's AI-related tech names was especially volatile amid dilution concerns
and intensifying price competition. (Refer to the major indices' weekly
performance tables above.)
Index Weekly Performance
- CSI 300: -0.83%
- Shanghai Composite (SSE): -1.07%
- Hang Seng Index (HSI): -3.30%
Key Highlights and Outlook
1️⃣ Beijing Broadens Bank Recapitalisation
China announced RMB 360 billion
(USD 54 billion) in fresh capital for eight state-owned banks, policy
institutions and insurers, funded mainly through special Treasury bonds.
Agricultural Bank of China and ICBC also announced A-share placements. Several large
banks and insurers weakened as markets absorbed the dilution implications, even
as the move aims to strengthen core capital buffers.
2️⃣ Exports Stay Resilient, Domestic Demand Uneven
China's exports rose 25.0%
year-over-year in August, accelerating from July, supported by strong tech
shipments tied to the global AI build-out. Imports grew 28.2%, widening the
trade surplus to USD 119.1 billion. Passenger-car retail sales fell 24% year-over-year,
however, highlighting a still-uneven domestic recovery.
3️⃣ Inflation Picks Up on Energy, Upstream Costs
Consumer price inflation rose to
0.8% year-over-year from 0.5%, while producer prices increased 3.8%, up from
3.5%, as energy and raw material costs climbed. Core inflation, excluding food
and energy, held at a modest 1.0%, suggesting the pickup was driven more by
input costs than a broad strengthening in domestic demand.
4️⃣ AI Names Swing on Dilution, Competition
Several Hong Kong-listed AI
model developers fell sharply this week on dilution concerns and intensifying
price competition following a lower-cost model release from a domestic rival,
even as Tencent-backed Enflame Technology surged roughly 179% on its STAR
Market debut. The divergence underscored how selective sentiment toward China
tech has become.
5️⃣ Maybank Flags Bank and Energy Picks
Maybank favours China
Merchants Bank for its strengthening wealth-management franchise and Ping An
Insurance for improving business quality, both offering dividend yields of
roughly 4-6%. It also likes CICC on robust capital-markets activity and CNOOC
for its low-cost production base amid elevated oil prices, while flagging a
possible near-term rotation toward dividend payers and defensives.
Technical Snapshot
The Hang Seng Index broke below
its recent trading range as the 3.30% weekly decline extended a multi-week
pullback from prior highs. Breadth was overwhelmingly negative, with decliners
outnumbering gainers by a wide margin across the index. The index remains in a
near-term downtrend, with a stabilisation in oil prices and Treasury yields
likely needed before sentiment improves.
HSI Constituents — Weekly Gainers
Gains were far more limited and concentrated in utilities and telecoms. China Unicom led advancers, followed by CK Infrastructure, CLP Holdings and Power Assets, as investors rotated into defensive, dividend-paying names.
(Refer to the Hang Seng Index constituents' weekly gainers table below.)
HSI Constituents — Weekly Decliners
Weekly decliners were led by consumer, tech and property counters as risk sentiment soured. Haidilao, WH Group and Zhongsheng each fell more than 10%, while heavyweights Alibaba, Tencent and BYD also declined sharply amid the broader tech-led sell-off.
(Refer to the Hang Seng Index constituents' weekly decliners table below.)
π Weekly charts:
πΈπ¬ Singapore
Market Overview
Singapore's Straits Times Index
(STI) fell 1.83% for the week, tracking the broader regional sell-off as global
risk appetite soured on rising oil prices and Treasury yields. Banking counters
led the decline, with UOB, OCBC and DBS all down more than 1.7%, while property
names and industrial REITs also came under pressure. A handful of defensive and
shipping-related names bucked the trend.
Index Weekly Performance
- Straits Times Index (STI): -1.83%
Key Highlights and Outlook
1️⃣ Banking Trio Leads Index Lower
Singapore's three local banks
were among the week's biggest drags on the STI, with DBS down 2.10%, OCBC off
2.08% and UOB down 1.79%, as rising U.S. Treasury yields and risk-off sentiment
weighed on financials broadly. The declines mirrored weakness across regional
bank stocks amid the global rate repricing.
2️⃣ Property and REITs Under Pressure
Real estate names were among the
week's steepest fallers, with City Developments down 5.12% and UOL Group off
4.00%, while several REITs including Mapletree Logistics Trust and CapitaLand
Ascendas REIT also declined. Higher-for-longer rate expectations continued to
weigh on the sector's valuations.
3️⃣ SGX, Consumer Names Extend Losses
Singapore Exchange fell 3.95%
and DFI Retail Group dropped 3.31%, extending recent weakness as
trading-sensitive and consumer-facing counters lagged the broader market.
Wilmar International also declined nearly 3% amid soft sentiment across
agri-commodity plays.
4️⃣ Shipbuilding, Logistics Names Buck the Trend
A handful of counters bucked the
broader sell-off, with Yangzijiang Shipbuilding up 0.81% and SATS gaining
0.77%, supported by resilient order books and travel-related demand. The pocket
of strength offered a modest counterweight to an otherwise broadly negative
week.
Technical Snapshot
The STI slipped below its recent
trading range this week, with the 1.83% decline marking one of its steeper
weekly losses of the year. Breadth was firmly negative, with the majority of
constituents finishing lower, led by banks and property names. The index
remains in a near-term pullback, though its solid year-to-date gain leaves it
well above where it started 2026. (Refer to the STI weekly performance table
below.)
π Weekly charts:
π
Week Ahead (14–18
Sep 2026)
All eyes turn to the Fed's
two-day policy meeting, concluding Wednesday, 16 Sep, with markets pricing a
high probability of a rate hike alongside updated economic projections and the
dot plot. Retail sales, industrial production and housing data round out a
data-heavy week, while any further escalation or de-escalation in Middle East
tensions will remain a key swing factor for oil and risk sentiment.
In China and Hong Kong,
investors will watch for any follow-through on Beijing's bank recapitalisation
programme and further A-share placement details from state lenders. Trading in
AI-related tech names is likely to stay volatile as the market digests competitive
and dilution pressures, while any fresh property or stimulus measures would be
closely scrutinised for signs of durable domestic demand support.
Singapore markets will continue
to take cues from the regional rate and oil narrative, with banks and REITs
likely to stay sensitive to any shift in Fed expectations. Regional trade and
manufacturing data releases are also on watch, alongside continued monitoring
of shipping and logistics names for signs of relative resilience.
π️ Overarching Watchpoint
The single biggest binary risk
of the week is the Fed's rate decision itself: a hike delivered alongside
hawkish guidance could extend the recent rise in yields and pressure risk
assets further, while any softer tone on the pace of future tightening could
offer relief across equities and reverse some of this week's losses.
Source: Some content
and data are excerpted from publicly available market reports.
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