Stocks Fell on Hawkish Fed on Interest Rate Cut

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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 Sep 26, major U.S. stock indexes finished the week lower, driven in part by some hawkish commentary from Fed that seemed to dampen investor optimism around the pace of further interest rate cuts. The Nasdaq Composite(COMP) fared worst, falling 0.65%, followed by the Russell 2000 Index(RUT), which registered its first weekly loss since early August. The S&P 500 Index(SPX) also fell, while the Dow Jones Industrial Average(DJI) was little changed. Refer to below major indexes weekly performance.

Key highlights for the week and next:

1.    U.S. economic growth exceeding expectations, driven by solid consumer spending. Final estimate of Q2 GDP was revised higher to 3.8% annualized, beating forecast of 3.3%. August Personal income rose by 0.4%, above forecasts of 0.3%. Data continues to point to Q3 GDP may grow above 3.0%. 

2.    Inflation in line with forecasts, latest PCE(personal consumption expenditure) inflation data released for August was 2.7%(headline inflation) and 2.9%(core inflation) both below estimation. 

3.    Negative sentiment during the week was partially attributed to comments from several Fed officials that appeared to signal a more tempered approach to further monetary policy easing than investors were hoping for. Speaking Tuesday, Fed Chair Jerome Powell noted that the economy is in a “challenging situation” due to near-term upside inflation risks and downside labor market risks while also acknowledging that “equity prices are fairly highly valued.” 

4.    Risk to note. Market has run up pretty far, pretty fast. Since April lows, the SPX is up over 30%, without a 2% or more pullback. U.S. government shutdown likely beginning on Oct 1. 

5.    U.S. Manufacturing PMI reading for Sep was 52.0, down from Aug’s reading of 53.0 but slightly better than estimates of 51.9. The services PMI registered reading of 53.9 in line with expectations. 

SPX sectors in play

Three out of the 11 SPX sectors recorded weekly gains. Energy(XLE) rallied, advancing alongside oil prices in response to President Donald Trump’s call for European Union nations to end purchases of Russian oil and gas. Most other sectors declined. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes had pullback this week.  Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets recorded a weekly gain. The Shanghai Composite Index(SSE) added 0.21% and the blue-chip CSI 300 advanced 1.07%. In Hong Kong, the benchmark Hang Seng Index fell 1.57%. (refer to the above weekly performance table).  

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

No major economic indicators or corporate earnings were released during the week, giving traders little news to act on. Rather, a high level of domestic liquidity has fueled strong gains in China’s stock markets since April as cash-rich households seek higher returns amid low interest rates and a lack of better investing options. Recent breakthroughs in homegrown artificial intelligence startups and Beijing’s “anti-involution” campaign to curb excessive price competition in several industries have also bolstered risk appetite, despite recent data pointing to a growth slowdown and persistent deflation.

Refer to below Hang Seng Index stocks’ weekly performance table.

Click below for SSE and .HSI weekly chart.

SSE weekly chart

.HSI weekly chart

 

Singapore

The Straits Times Index (STI) fell 0.85% to close at 4265.98, recorded 2^nd consecutive weekly loss. There were only seven stocks recorded positive weekly gains, out of all the 30 STI index stocks.

Refer to below 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 Hit New Record as Fed Cuts Rates

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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 Sep 19, major U.S. stock indexes rose to record highs, as the Federal Reserve lowered short-term interest rates for the first time in nine months. Small-cap stocks dominant Russell 2000 Index(RUT) gaining 2.16%. The Nasdaq Composite(COMP) advanced 2.21% for the week, while the S&P 500 Index(SPX) and Dow Jones Industrial Average(DJI) added 1.22% and 1.05%, respectively. Refer to below major indexes weekly performance.

Key highlights for the week and next:

1.    Trade developments were in the headlines following a Friday morning call between U.S. President Donald Trump and Chinese President Xi Jinping. In a social media post following the call, Trump announced that they had reached an agreement regarding U.S. ownership of the short-form video platform TikTok and had made progress on several other issues, including further trade negotiations between the countries. 

2.    Fed announced a 25-basis point(0.25% point) cut following FOMC meeting, as expected. The Fed’s Summary of Economic Projections indicated that most policymakers expect to lower the central bank’s policy rate by an additional 50 basis points by the end of the year, representing more easing than their last projections made in June. Expectations for rate cuts in 2026 and 2027 also increased. 

3.    August retail sales increased by 0.6% MoM in August, beat forecast of 0.2%. Housing market-related data surprised to the downside. Housing starts declined by 8.5% in August from the prior month, hitting a seasonally adjusted annual rate of 1.31 million versus estimates for around 1.37 million. 

SPX sectors in play

Six out of the 11 SPX sectors recorded weekly gains. Growth stock outperformed, Tech(XLK), Communication Services(XLC) and Consumer Discretionary(XLY) were among the top gainers, while Consumer Staples (XLP) and Materials(XLB) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes hit new record highs this week.  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 investors pocketed gains after a recent rally and a trio of indicators pointed to an economic slowdown. The Shanghai Composite Index(SSE) lost 1.3% and the blue-chip CSI 300 fell 0.44%. In Hong Kong, the benchmark Hang Seng Index added 0.59%. (refer to the above weekly performance table).  

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

1.    August retail sales rose 3.4% and industrial output gained 5.2% year on year, China’s statistics bureau reported, marking the worst monthly performance for both gauges this year. Fixed asset investment growth slowed to 0.5% in the year’s first eight months, the lowest reading for the period on record except for 2020, a pandemic year, according to Bloomberg. 

2.    All three readings trailed expectations and pointed to a broad slowdown in China’s economy after it grew a surprisingly strong 5.3% in the year’s first half. The weak data supported the view that Beijing will likely roll out additional stimulus measures to hit its official 5% growth target as deflation continues to stalk the economy. 

3.    New and existing home prices fell in August month on month in 70 cities, according to the statistics bureau, while new home sales in Beijing plunged 19% in August from a year ago, according to the China Real Estate Information Corp. The latest data raised speculation that officials may implement targeted stimulus measures to help bolster the housing market, which has persisted for more than four years with little evidence of a potential turnaround.

Refer to below Hang Seng Index stocks’ weekly performance table.

Click below for SSE and .HSI weekly chart.

SSE weekly chart

.HSI weekly chart

 

Singapore

The Straits Times Index (STI) fell 0.96% to close at 4,302.71, snapping a four-week winning streak. The three local banks were among the top decliners, with DBS leading the losses, likely due to profit-taking and expectations of an upcoming Fed rate cut.

Refer to below 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 Climb Higher on Rate Cut Expectations and AI Boom

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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 Sep 12, most major U.S. stock indexes closed higher ahead of the Federal Reserve’s September 16–17 monetary policy meeting, at which the central bank is widely expected to lower short-term interest rates. Enthusiasm surrounding the ongoing artificial intelligence (AI) boom—supported by Oracle’s announcement of a substantial guidance increase amid several large new AI deals—also helped lift major indexes.

The Dow Jones Industrial Average(DJI), S&P 500 Index(SPX), and Nasdaq Composite(COMP) all notched new record highs during the week, although DJI and SPX both pulled back modestly in a relatively quiet trading session on Friday. Refer to below major indexes weekly performance.

Key highlights for the week and next:

1.    August inflation remains elevated but is seen as unlikely to derail rate cuts. Consumer price growth accelerated in August, with headline CPI rose to 2.9% YoY from July’s reading of 2.7%. Core CPI rose 3.1% over the same period. Meanwhile, producer price inflation resumed its trend lower, falling to 2.6%. 

2.    Downward revisions to job gains and higher initial jobless claims added to the recent trend of data pointing to a softening labor market. Latest reports showed 911k fewer jobs for the 12-month period through March 2025 than previously reported, compared with forecasts for 800k fewer jobs, also the Initial jobless claims rising to 263k in the past week, well above expected reading of 231k. Despite inflation remaining above the Fed's 2% target, investors are largely expecting the Fed to cut short-term interest rates at its upcoming meeting in support of its maximum-employment mandate. 

3.    Bond yields dropped on expectations of Fed easing, with the 10-year Treasury yield briefly touching 4.0%, matching the lows for the year reached in April. Lower rates should reduce borrowing costs for individuals and businesses, which would be supportive of the economy and corporate profits. Lower discount rates should help benefit equity markets near record highs with elevated valuations. 

SPX sectors in play

Nine out of the 11 SPX sectors recorded weekly gains. Tech(XLK) and Communication Services(XLC) were among the top gainers, while Consumer Staples (XLP) and Materials(XLB) lagged.

From a sector perspective, we recommend overweight positions in consumer discretionary, financials and health care. The consumer discretionary sector could continue to recover, supported by reduced tariff uncertainty and lower tax rates. Financial companies could benefit from less exposure to tariffs and the potential for a steeper yield curve as the Fed eases. Health care stocks trade at a discount to the broader market, likely reflecting the sector's challenges, but also offering the opportunity for valuation expansion. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes closed at record highs this week.  Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets rose as bullish sentiment among retail investors persisted. The Shanghai Composite Index(SSE) rose 1.52% and the blue-chip CSI 300 added 1.38%. In Hong Kong, the benchmark Hang Seng Index advanced 3.82%. (refer to the above weekly performance table).  

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

1.    Ample domestic liquidity—as opposed to improving corporate earnings or economic data—has fueled a rally in China’s stock markets since April as cash-rich households seek higher returns amid low interest rates and a lack of better investing options. Recent advances in artificial intelligence and an official “anti-involution” campaign to cut overcapacity and discourage price wars in various industries have also boosted sentiment. On Thursday, the CSI 300 Index recorded its biggest one-day advance since March, Bloomberg reported, driven by domestic tech companies that are perceived to be major beneficiaries of Beijing’s push for homegrown technology. 

2.    Data showed that deflationary pressures continue to weigh on China’s economy. The producer price index fell 2.9% in August year on year, marking the 35th straight month that the gauge has remained in negative territory, but narrowed its decline from July’s 3.5% drop. The consumer price index turned negative for the first time in three months, falling a larger-than-expected 0.4% in August from a year ago, as food prices dropped. Unlike most Western countries, China is in its third straight year of deflation, and the government has been struggling to reverse price declines. But weak domestic demand due to a multiyear housing market downturn has made it difficult to engineer a long-term rebound in prices.

Refer to below Hang Seng Index stocks’ weekly performance table.

Click below for SSE and .HSI weekly chart.

SSE weekly chart

.HSI weekly chart

 

Singapore

The Straits Times Index (STI) rose 0.86% to close at 4,344.24, marking its fourth consecutive week of gains. S-REITs continued to outperform as the downtrend in interest rates boosted their relative appeal. With bond yields easing, REIT distributions are increasingly attractive compared with government securities such as T-bills, which had previously been a popular choice for risk-averse investors.

Refer to below 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.

A 100% Chance to Cut Rate for Fed’s Sep FOMC

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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 Sep 5, U.S. equity indexes finished the holiday-shortened week higher. The latest August job’s data showed weaker-than-expected labor market, which fueled hopes that the Fed would lower short-term interest rates at its next meeting(Sep 16-17). However, sentiment shifted later in the day and stocks gave back their early gains, due in part to fears that rate cuts may not be enough to boost economic growth. 

The Nasdaq Composite(COMP) finished the week 1.14% higher, supported by shares of Apple and Google parent Alphabet, which both rose in the wake of an antitrust ruling that some investors viewed as less severe than expected. The S&P 500 Index(SPX) added 0.33%, while the Dow Jones Industrial Average(DJI) lost 0.32%. Refer to below major indexes weekly performance.

Major indexes monthly performance for the month of August.

Key highlights for the week and next:

1.    Weaker-than-expected labor market data. As reported on Friday morning, the closely watched nonfarm payrolls report revealed there were just 22k jobs added in August, a sharp decline from Jul’s revised figure of 79k and well below estimates for around 77k.  The CME FedWatch tool were pricing in a 100% chance of at least a 25-basis-point (0.25 percentage point) rate cut at the Fed’s next meeting(Sep 16-17), while the probability of a 50-basis-point cut rose from 0% to about 10% following Friday’s jobs report. 

2.    Manufacturing activity shrinks for sixth straight month; services sector expands. The ISM manufacturing PMI came in at 48.7% for August, up from July’s reading of 48% but below estimates for around 49.1%. Meanwhile, the ISM’s services PMI in August climbing to 52% from 50.1% in prior month. 

3.    Inflation data next week will be under spotlight. The Federal Reserve has two mandates – maximum employment and stable prices. The second mandate of inflation will come to the forefront once again next week. Investors will get both consumer price index (CPI) and producer price index (PPI) inflation figures for the month of August on Wednesday and Thursday next week, the last reading ahead of the September 17 FOMC meeting. 

SPX sectors in play

Six out of the 11 SPX sectors recorded weekly gains. Communication Services(XLC), Consumer Discretionary(XLY) and Health Care(XLV) sectors led the gains, while Financials(XLF) and Energy(XLE) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

All the three major indexes were largely trading within their prior week’s range again, though both SPX and Nasdaq(COMP) edged up slightly and DJI recorded modest weekly loss. All three indexes weekly uptrend are still well intact. 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 investors pocketed gains after a recent rally. The Shanghai Composite Index(SSE) fell 1.18% and the blue-chip CSI 300 lost 0.81%. In Hong Kong, the benchmark Hang Seng Index added 1.36%. (refer to the above weekly performance table).  

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

1.    China’s stock markets have surged since April, largely due to domestic liquidity rather than strong corporate earnings or an improving economy. The CSI 300 surged 10% in August, its best performance since a policy-driven rally last September, and it has climbed more than 20% from this year’s low. Average turnover volume rose to a record high in August, while the outstanding amount of margin trades rose to a record last week, Bloomberg reported, suggesting a strong appetite for risk-taking among retail investors. 

2.    Optimism about China’s advances in artificial intelligence and a government-led “anti-involution” campaign to cut overcapacity and discourage price wars in various industries have fueled sentiment. Analysts have also attributed recent gains to cash-rich households seeking higher returns amid low interest rates and a lack of compelling investment options. However, economic indicators have pointed to a broad slowdown in China’s economy, which is struggling with the threat of higher U.S. tariffs, a yearslong property downturn, and persistent deflation. Many economists believe that data in the coming months will confirm China’s growth slowdown and lead officials to roll out more stimulus to protect the economy amid the U.S.-sparked trade war. 

Refer to below Hang Seng Index stocks’ weekly performance table.

Click below for SSE and .HSI weekly chart.

SSE weekly chart

.HSI weekly chart

 

Singapore

The Straits Times Index (STI) added 0.88% to close at 4307.08 for the week- its first time cross 4300 level. It has been consolidated for the past six weeks and finally had bullish breakout to hit new record high.

YZJ ship, Genting SP and ST Engineering were among the top gainers of the week. Refer to below 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.