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.

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.