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.)
πΊπΈ 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.
π Weekly
charts:
π¨π³ 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.
π Weekly
charts:
πΈπ¬ 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.
π Weekly
charts:
π
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.
π️ 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.
