Stocks Decline Amid Renewed Tariff Threats on EU

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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 May 23, U.S. equities, bonds and the dollar all retreated amid renewed focus on the U.S. budget deficit and rising debt. Fresh tariff threats were also a reminder that trade developments remain in the driver's seat.

The S&P 500 Index(SPX) and Dow Jones Industrial Average(DJI) both fell back into negative territory for the year after ending the prior week slightly positive. The technology-heavy Nasdaq Composite(COMP) held up best but still shed 2.47%. After a near 20% rally in the SPX since the April 7 low, rising bond yields together with fresh tariff threats are now tapping the brakes on investor optimism. U.S. markets will be closed Monday for a public holiday. Refer to below major indexes performance table for the week.

Key highlights for the week and next: 

1.    Moody's became the last of the "Big Three" rating agencies to downgrade U.S. debt. The one-notch downgrade means that the U.S. lost its last triple-A credit rating after Standard & Poor's (S&P) took similar action in 2011 and Fitch in 2023. Meanwhile, Congress is in the process of passing a bill that is expected to push deficits higher for the remainder of the decade. 

2.    The 10-year Treasury yield exceeded 4.5% last week and the 30-year crossed the 5% mark, nearing the highest since 2007. The dollar weakened against major currencies, rising borrowing needs may affect long-term Treasuries more than short-term bonds, steepening the yield curve, as investors require additional yield (a risk premium) to hold long-term debt. 

3.    High deficits. 10 years ago, the federal deficit was $472 billion, or about 3% of GDP. By 2019, the deficit had jumped to $984 billion, or 4.6% of GDP. And last year, the deficit was $2 trillion, or 6.7% of GDP. During this timeframe the S&P 500 has returned 230%, including dividends. The debt-to-GDP ratio could reach a record high of 150% of GDP within the next 10 years. With interest rates still high, interest costs to service the existing debt are becoming a larger burden to the budget. At 3% currently, interest payments on federal debt as a percent of U.S. GDP are matching the highs of the late-1980s and early-1990s. 

4.    Business activity rebounds in May after a pause on additional tariffs. S&P Global’s Flash PMI survey data shows services sector PMI reading jumped to 52.3 in May from 50.8 in April. The Manufacturing PMI also improved, increasing from 50.2 in April to a 3-month high of 52.3 in May. Both readings were better than consensus estimates. 

SPX sectors in play

All 11 SPX sectors recorded weekly losses, Technology (XLK) and Energy(XLE) among the laggards. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The indexes fell back into negative territory for the year after ending the prior week slightly positive. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets declined as attention turned back to the economy after Beijing and Washington struck a temporary trade truce. The Shanghai Composite Index(SSE) gave up 0.57% while the blue-chip CSI 300 shed 0.18%. In Hong Kong, the benchmark Hang Seng Index added 1.1%. (refer to the above weekly performance table).

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

1.    A trio of indicators offered the first glimpse of China’s economy following the rapid escalation of trade tensions with the U.S. Industrial output rose a better-than-expected 6.1% in April from a year ago. But retail sales growth, a key consumption barometer, weakened to 5.1% from March’s 5.9% increase, lagging economists’ forecasts. Fixed asset investment—which includes property and infrastructure investment—rose 4% from January to April, trailing estimates, weighed by a steep contraction in property investment. 

2.    The surprising uptick in industrial production suggested that China was able to avert a significant slowdown at the start of the U.S.-sparked trade war in April. However, the decline in retail sales growth supported the view of many economists that Beijing needs to roll out more spending incentives to bolster consumer confidence.

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) ledged lower 0.4% to close at 3882.42 point this week, marked its first weekly loss after five consecutive weekly gains. Stock momentum remained relatively muted this week.

Top weekly gainers including SIA, SingTel and ST Enginering, DBS and OCBC were among top gainers as well. Refer to below table for STI index stocks weekly performance.

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.

Stocks rally on U.S.-China 90-day Tariff Pause

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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 May 16, U.S. equities posted strong gains, with positive sentiment largely driven by news that the U.S. and China had agreed to a substantial de-escalation of trade tensions following talks in Switzerland over the weekend. The Nasdaq Composite(COMP) led the way for major indexes, advancing 7.15%, while the S&P 500 Index(SPX) and Dow Jones Industrial Average(DJI) gained 5.27% and 3.41%, respectively. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    SPX back into positive territory in 2025 this week, mainly driven by news on trade policies in the week, with U.S. and China had announced in last weekend to significantly reduce tariffs for a period of 90 days while both working towards a longer-term deal. 

During the 90-day period, the U.S. agreed to reduce its tariff on most Chinese goods down from 145% to 30%, while China’s levies on U.S. imports will drop from 125% to 10%. Stock markets rallied sharply, and interest rates rose on the news. 

2.    Several other trade-related headlines—including news of an agreement that will allow Saudi Arabia to purchase large amounts of advanced artificial intelligence chips from U.S. companies—appeared to help fuel the positive move in stocks during the week, putting most indexes firmly back above their April 2 levels by Friday’s close. 

3.    Inflation cools in April as reported. April’s consumer price index (CPI) rose 2.3% year-over-year, a tick below consensus estimates for a 2.4% increase and the slowest annual pace since early 2021, before inflation began to surge and the Federal Reserve started its rate-hiking cycle. On a month-over-month basis, both the headline and core (excluding food and energy) CPI rose 0.2%, below estimates for 0.3% increases. 

SPX sectors in play

All 11 SPX sectors recorded weekly gains, Technology (XLK) and Consumer Discretionary (XLY) led the gains. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The SPX index was back into positive territory in 2025 by Friday, added 1.3% year-to-date (YTD), while the COMP index still needs 0.52% to back into par. Next major resistance level for SPX to watch is at around 6130 level. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets advanced for the week after news of the de-escalation in U.S. trade tensions. The Shanghai Composite Index(SSE) edged up 0.76% while the blue-chip CSI 300 rose 1.12%. In Hong Kong, the benchmark Hang Seng Index added 2.09%. (refer to the above weekly performance table).

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

1.    Chinese stocks rallied early in the week after the outcome of tariff negotiations with the U.S. last weekend. The deal with the U.S., which called for both sides to temporarily lower tariffs on each other’s imports, exceeded expectations in China and ended up meeting nearly all of Beijing’s core demands. However, stocks pared their gains starting on Wednesday as a more favorable tariff outlook dimmed hopes for a substantial stimulus package from Beijing. 

2.    Expectations that a spiraling trade war with the U.S. would spur the government to ramp up measures to bolster the economy have supported Chinese stocks in recent weeks. Earlier in May, the People’s Bank of China unexpectedly cut its reserve requirement ratio—the amount of cash that banks must keep in reserve—by half a percentage point and trimmed the seven-day reverse repurchase rate by 10 basis points to 1.4%. However, hopes for further government support have been tempered in the near term as the U.S. and China work toward a broader agreement over the next three months. 

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) edged up 0.56% to close at 3897.87 point this week, marking its 5^th consecutive weekly gains. Stock momentum remained relatively muted this week.

Top weekly gainers including YZJ Ship, HKLand, DBS and UOB were among top gainers as well. DBS total return including 75c dividend is 3.76%, the bank went ex-dividend on 16 May. Refer to below table for STI index stocks weekly performance.

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.

U.S. Stocks Stalled amid Hopes for Tariff De-escalation

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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 May 9, U.S. stocks finished modestly lower, with the S&P 500 Index(SPX) and Nasdaq Composite(COMP) declined 0.47% and 0.27%, respectively, while the Dow Jones Industrial Average fell modestly. U.S. and UK announced first new trade deal since the Trump administration’s reciprocal tariffs were unveiled on April 2, which helped fuel investors’ hopes of more deals to come. U.S. and Chinese officials are holding meeting in Switzerland over the weekend for trade discussions, potentially paving the way for broader negotiations and tariff de-escalation. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    The U.S. has reached a trade deal with the U.K. and agreed to trade talks with China, to be held this weekend. The economic benefit of this deal is likely limited, in our view, as the U.K. represented about 4% of U.S. exports and roughly 2% of U.S. imports in 2024, resulting in a U.S. trade surplus. Importantly, the agreement demonstrates that trade talks are progressing, and it could serve as a framework for further negotiations with other trading partners. 

2.    The Federal Reserve left the fed funds rate unchanged at 4.25% - 4.5% this week, as expected, and flagged risks of higher inflation and unemployment. 

3.    Services sector readings were mixed in April but remain in expansion. The S&P U.S. Services Purchasing Managers' Index (PMI) fell to 50.8 in April but remained above the key 50.0 mark reflecting expansion. The services sector, accounting for roughly 72% of the economy, has been slowing but remains in expansion territory. 

SPX sectors in play

Six out of the 11 SPX sectors recorded weekly gains, Industrials(XLI) and Energy(XLE) led the gains, Tech(XLK) and Consumer Discretionary(XLY) were also among the gainers. Health Care(XLV) lagged. The financial sector could benefit from less exposure to tariffs due to its domestic orientation and service focus. Health care is also less affected by tariffs, and valuations are not extended relative to history. Both sectors could also be beneficiaries of tax reform and deregulation. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The SPX index has stalled and trading sideways for the whole week, there is no clear direction this market might be going at this junction. Click below three indexes for their weekly charts and SPX monthly chart.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets advanced in an abbreviated trading week ahead of U.S. trade talks. The Shanghai Composite Index(SSE) rose 1.92% while the blue-chip CSI 300 added 2.0%. In Hong Kong, the benchmark Hang Seng Index added 1.61%. (refer to the above weekly performance table). Markets in mainland China are closed on Monday, May 5 for the Labor Day holiday.

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

1.    Chinese stocks rallied early in the week on news that U.S. and Chinese officials would travel to Switzerland for trade talks over the weekend. An unexpected policy boost by the central bank also added to positive sentiment. On Wednesday, the People’s Bank of China (PBOC) reduced its seven-day reverse repurchase rate to 1.4% from 1.5% and cut its reserve requirement ratio by half a percentage point, a move that will release roughly RMB 1 trillion in long-term liquidity in the economy, the central bank governor said. The PBOC announced other loosening measures, including rate cuts on a range of relending tools and loans for policy banks. 

2.    The measures reflected China’s increased efforts to protect the economy after the Trump administration said it would hike tariffs on most Chinese goods to 145%. On Friday, China reported that exports to other countries rose a higher-than-expected 8.1% in April but were down from March’s 12% gain. U.S.-bound shipments sank 21% from a year ago after Washington imposed the tariff hike in early April. But exports to India, Southeast Asian countries, and the European Union soared as Chinese companies offset the U.S. sales drop with sales to other markets. 

3.    Chinese Vice Premier He Lifeng and U.S. Treasury Secretary Scott Bessent are leading the trade talks, which are set to start on Saturday in Geneva and last for two days. Economists believe that U.S. tariffs in their current state would likely deliver a shock to Chinese exports and economic confidence. However, they also believe that Beijing should have the financial capacity to reduce their impact through fiscal stimulus, which the central government could roll out in stages as it assesses the economic toll of the tariffs. 

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) added 0.81% to close at 3876.16 point this week, making its 4^th consecutive weekly gains. Top weekly gainers including DFI, ST Engineering, SingTel and DBS. Refer to below table for STI index stocks weekly performance. Singapore market will be closed on Monday, May 12 for Vesak Day public holiday and will resume trading on Tuesday.

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.

U.S. Stocks Erased 100% Tariff Loss on Easing Trade Concerns

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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 May 2, U.S. stocks finished higher, with the S&P 500 Index(SPX) logging its second consecutive week of gains for the first time since January and closing Friday with its ninth straight session in positive territory. The technology-heavy Nasdaq Composite(COMP) rose 3.42%, supported by better-than-expected earnings reports from several large-cap tech companies.

Positive sentiment early in the week appeared to be driven by a continuation of the prior week’s optimism around de-escalating trade tensions, with President Donald Trump rolling back some of his initial tariffs on cars and auto parts and Commerce Secretary Howard Lutnick announcing that a major trade deal was nearing the finish line. Later in the week, the focus largely shifted to earnings as companies representing nearly 40% of the S&P 500 Index’s market cap reported first-quarter results, including four of the so-called Magnificent Seven names. Refer to below major indexes performance table for the week.

Major indexes monthly performance for April as below. It’s worth noting that the SPX has formed a large long-legged hammer candlestick formation in April on its monthly chart, which is a very bullish technical signal.

Key highlights for the week and next:

1.    Earnings growth: Positive for Q1, but outlook is unclear. Q1 earning season is underway, with about 70% of S&P 500 companies having reported earnings. Thus far, about 76% of companies have reported positive earnings surprises, above the 10-year average beat rate of 75%. Earnings growth for Q1 remains on track for 12.5% year over year, above the 11.5% expected at the end of last year. However, guidance for Q2 of earnings growth has weakened, as companies point to uncertainty around the consumer and the tariff and trade backdrop. 

2.    U.S. GDP growth turns negative, Q1 growth fell by -0.3% versus an expectation of -0.2%. This was driven largely by a surge in imports — the biggest in nearly five years — as companies purchased goods in anticipation of higher tariff rates. 

3.    Jobs market still healthy but could slow from here. The April nonfarm jobs reported released on May 2 indicated 177k jobs added, above the expected 138k. While March were revised lower by 43k. Unemployment remained steady at 4.2%, in line with expectation. 

4.    Fed rate cut has come down after solid jobs report for April. Markets are pricing in three Fed interest rate cuts instead of four, and the probability of a June rate cut has declined from 55% to about 33%, according to the CME FedWatch Tool. The FOMC meeting is scheduled on next Tuesday and Wednesday(May 6-7), expected the Fed rate to remain unchanged at 4.5%. 

SPX sectors in play

All but one of the 11 SPX sectors recorded weekly gains, with the Tech(XLK) and Financials(XLF) sectors led the gains. The energy sector(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The SPX index has continued upward move after its bullish breakout from a major downtrend line as highlighted in my last post. It’s worth highlighting SPX has formed a huge long-legged bullish hammer candlestick on its April monthly chart, which is a very bullish sign especially on the large time frame chart. Click below three indexes for their weekly charts and SPX monthly chart.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

SPX monthly chart

China/HK

Mainland China stock markets declined in a holiday-shortened week. The Shanghai Composite Index(SSE) retreated 0.49% while the blue chip CSI 300 was down 0.43%. In Hong Kong, the benchmark Hang Seng Index rose 2.38%. (refer to the above weekly performance table). Markets in mainland China are closed from May 1 until May 5 for the Labor Day holiday and will resume trading Tuesday, May 6.

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

1.   On Friday, China said it was considering the possibility of holding trade talks with Washington, indicating a potential thaw in the U.S.-sparked trade war. “The U.S. has recently sent messages to China through relevant parties, hoping to start talks with China,” the Commerce Ministry said in a statement. “China is currently evaluating this.” The ministry’s comments followed reports that China has started to exempt some U.S. goods from tariffs covering roughly USD 40 billion worth of imports, Bloomberg reported. The list of exempted products, which include products such as drugs and industrial chemicals, has been circulating among traders and businesses over the past week but has not been officially confirmed, Bloomberg reported, citing unnamed individuals. 

2.    A pair of indicators gave the first official snapshot of China’s economy after the Trump administration raised total tariffs on most Chinese goods to 145% in April. The manufacturing PMI fell more than expected to 49 from 50.5 in March, according to the country’s statistics bureau, marking the worst contraction since December 2023. The nonmanufacturing measure of construction and services activity also missed expectations, declining to 50.4 in April from March’s three-month high of 50.8. 

3.   China set an economic growth target of around 5% this year, a goal that many analysts think will be hard to meet given the trade war. While a trade war with the U.S. would likely deliver a shock to Chinese exports and economic confidence, Beijing should have the financial capacity to reduce their impact and could roll out fiscal stimulus in stages as it assesses the economic costs of tariffs.

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) added 0.56% to close at 3845.14 point this week, making its 3^rd consecutive weekly gains. Top weekly gainers including the Jardine family of stocks such as DFI, HKland and JMH, gained from 4.1% to 6.2%, continued their strong momentum after HKland’s recent announcement of asset sales and share buyback programme. Index heavyweights DBS and OCBC were also among top gainers. Refer to below table for STI index stocks weekly performance.

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.