U.S. Stocks Fall, Services PMI Down to Contraction

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

6.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week of Feb 21, major stock indexes declined as sharp losses in the latter half of the week erased the early gains and led to the major indexes finishing lower. Many of the week’s headlines centered around geopolitics and tariff news amid Trump’s efforts to end the Russia-Ukraine conflict as well as Trump’s announcement of his intent to impose additional tariffs on automobiles, pharmaceuticals, and lumber products, although details of the planned tariffs remained limited.

S&P Global reported its latest services PMI reading at 49.7- lowest over two years. Michigan Consumer Sentiment for Feb dropped nearly 10% MoM to 64.7 while inflation expectations for the year ahead also jumped to 4.3% from 3.3% in January. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    Tariff fears and cost pressures drive worsening sentiment. January housing starts declined nearly 10% from December. The report cited uncertainty around tariffs, elevated mortgage rates, and high housing costs as factors driving the overall decline in sentiment. 

2.    S&P Global reported that U.S. Business PMI came in at a 17-month low of 50.4, Services PMI reading dropped to its lowest in over two years (49.7), which partially offset growth in the manufacturing sector. 

3.    Consumer sentiment hit new low. University of Michigan reported its Index of Consumer Sentiment for February dropped nearly 10% month over month to 64.7, “in large part due to fears that tariff-induced price increases are imminent,” Inflation expectations for the year ahead also jumped to 4.3%, up from 3.3% in January. 

4.    Sentiment turned to sour after Walmart(WMT) issued lower guidance for the year ahead, which seemed to drive broader investor concerns regarding consumer spending and the health of the overall economy. 

5.    Important Event to watch coming week: Personal consumption expenditures (PCE) inflation data on Friday Feb 28, which is often considered the Fed's preferred inflation gauge, and the expectation is for the headline inflation rate to moderate from 2.6% to 2.5%. 

SPX sectors in play

Five of the 11 SPX sectors recorded weekly gain. Defensive sectors outperformed Consumer Staples( XLP) and Utilities(XLU) were among the top gainers, while Technology(XLK), Communication Services(XLC) and Consumer Discretionary(XLY) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Both SPX and COMP indexes declined to their two-week lows while DJI dropped to its five-week low. All three indexes weekly uptrend still intact. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stock markets rose, lifted by strength in technology shares following better-than-expected earnings from some of the country’s leading tech companies. The Shanghai Composite Index(SSE) added 0.97% while the blue chip CSI 300 gained 1.0%. In Hong Kong, the benchmark Hang Seng Index advanced 3.79%, driven by a rally in Alibaba shares after China’s leading e-commerce and cloud computing company reported faster-than-projected sales growth in the December quarter. (refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.    The surprisingly strong results from Alibaba and other Chinese tech companies came after local artificial intelligence startup DeepSeek showed off its technological capabilities in January, which renewed investor interest in the country’s internet sector. Sentiment was also buoyed after a high-profile meeting between President Xi Jinping and several Chinese tech entrepreneurs signaled that the government was adopting a more supportive stance toward private sector companies. Photos from the February 17 meeting—which were widely disseminated in state media—showed Xi meeting with Alibaba founder Jack Ma and the heads of other leading tech companies. 

2.    The appearance of Ma, once seen as the poster boy for China’s booming tech industry, was significant after Beijing abruptly canceled the initial public offering for Alibaba affiliate Ant Group in 2020, an incident that marked the start of a yearslong crackdown on China’s tech sector and other industries. However, a looming trade war with the U.S. has underscored the importance of the private sector as a growth engine for China, whose economy is already under strain amid a persistent property slump and weak domestic demand.

Refer to below .HSI stocks top 40 performance of the week.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) gained 1.35% to close at 3929.94 for the week, after hitting record high of 3949.65 points on Wednesday. Sembcorp Ind was the top gainer of the week with 6.28% up. MAS released new set of measures to strength Singapore’s equities market after Friday market close- Analyst viewed as a “shot in the arm” new family offices may contribute $15 billion to local bourse this year and SGX Group a key beneficiary. 

Refer to below STI stocks weekly performance table.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.