Global equities advanced firmly in the week ended 9 May, as a blowout U.S. earnings season and a stronger-than-expected labor market report shifted investor attention decisively away from geopolitical noise. On Wall Street, technology and AI-linked names led broad gains, with semiconductor stocks powering ahead on record quarterly results while energy and utilities lagged sharply. In China and Hong Kong, markets bounced back after the May Day holiday with optimism building around the upcoming Trump–Xi summit and a resilient April services PMI reading providing a constructive macro backdrop. Singapore stayed broadly flat as gains in a few large caps offset weakness in REITs and shipbuilders.
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United States
Market Overview
U.S. equities extended their rally, with
the S&P 500 up 2.33%, the Nasdaq Composite up 4.51%, and the Dow Jones
Industrial Average up 0.22%. The main driver was strong earnings from
technology and AI-related companies, especially semiconductor names, which
helped push the Nasdaq and S&P 500 to record highs. The April jobs report
also beat expectations, with payrolls rising 115,000 and unemployment holding
at 4.3%, reinforcing the view that the labor market remains firm.
(Refer to the major indices’ weekly
performance tables below.)
Major Indices – Weekly Performance
· Dow Jones Industrial Average (DJI):: +0.22%
· S&P 500 (SPX):: +2.33%
· Nasdaq Composite (COMP): +4.51%
Key Highlights and Outlook
1️⃣ Q1 Earnings Season Delivers
Blowout Results
With approximately 85% of S&P 500 companies having reported, around 85% surpassed analyst earnings-per-share estimates — comfortably ahead of the five-year average beat rate — with the magnitude of the positive surprise averaging approximately 19%. The blended earnings growth rate for the index tracked near 28% year-on-year in Q1, which, if sustained at final count, would represent the strongest quarterly result since 2021. Ten of eleven sectors reported positive year-on-year earnings growth, with seven posting double-digit gains.
2️⃣ Technology and Semiconductors Drive the Week's Rally
Information technology was the standout sector, with the Technology Select Sector ETF (XLK) surging +8.43% — more than three times the S&P 500's weekly gain — as companies exposed to AI infrastructure build-out and data center spending reported strong forward guidance. Semiconductor names led within the sector, consistent with the theme that the ongoing AI investment super-cycle remains intact and is translating into durable revenue growth for hardware and chip designers across the supply chain.
3️⃣ Labor Market Holds Firm Despite Caution in Surveys
April nonfarm payrolls rose 115,000 — nearly double the consensus estimate of 62,000 — marking the second consecutive month of solid job gains and the strongest two-month stretch for payroll growth since 2024. Health care, transportation and warehousing, and retail were key drivers. The unemployment rate held at 4.3%, while initial jobless claims for the week ended May 2 came in below expectations at 200,000 and continuing claims slipped to 1.77 million, the lowest level since 2024.
4️⃣ Consumer
Sentiment Hits Record Low; Divergence Widens
The University of Michigan's consumer sentiment index fell to 48.2 in early May — its lowest reading on record — with roughly one-third of survey participants citing higher gasoline prices and around 30% flagging tariff concerns. The widening divergence between a robust labor market and deeply pessimistic consumers represents a key fault line for the economic outlook: if sentiment weakness translates into a meaningful pullback in household spending, it could challenge the earnings resilience narrative heading into Q2 and Q3.
5️⃣ Fed Stays Sidelined;
10-Year Yields Hold Above 4.3%
With oil prices elevated and the labor market solid, market expectations for Federal Reserve rate cuts remained pared back sharply, with the 10-year U.S. Treasury yield holding above 4.3% — up approximately 40 basis points from its late-February lows. Fed Chair Warsh faces a divided FOMC, with recent dissents over rate-cut guidance making near-term consensus-building difficult. The prevailing view is that the Fed remains on hold for at least the next several meetings, putting the onus firmly on corporate earnings to sustain the equity rally at current valuations.
6️⃣ Factory Orders and
Construction Spending Support the Growth Case
U.S. factory orders rose 1.5% sequentially in March, driven by surging demand for electronic products tied to AI infrastructure investment — providing tangible evidence that the AI build-out is translating into real economic activity beyond equity market sentiment. Construction spending also rebounded 0.6% in March after a prior-month dip, with new single-family housing projects an area of strength. Together, these readings reinforce the picture of a broadly resilient economy navigating higher energy costs without significant deterioration.
S&P 500 Sectors in Focus
Technology was the clear leader, while
consumer discretionary and materials posted smaller gains. Real estate and
communication services were modestly positive, but health care and financials
slipped slightly. Utilities and energy were the weakest sectors, with energy
pressured by softer oil sentiment and utilities hit by rising yield
sensitivity.
(Refer to the SPX sector ETF weekly
performance table below.)
Technical Snapshot
Both SPX and Nasdaq The S&P 500 extended their remarkable six-week up streak, hitting new records. While Dow still consolidating within its three-week range near previous peak around 50,500 level. Near-term direction will likely depend on whether earnings momentum continues and whether upcoming macro data changes the rate-cut outlook.
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China / Hong Kong
Market Overview
Chinese and Hong Kong equities rallied over the holiday-shortened week as mainland markets reopened from the May 1–5 break with renewed appetite for risk assets. The blue chip benchmark CSI 300 Index rose 1.34%, the Shanghai Composite Index(SSE) added 1.65%, and the Hang Seng Index advanced 2.39% for the week led by technology and internet names alongside select consumer-related shares. Sentiment was supported by a better-than-expected April services PMI reading, sustained southbound inflows into Tencent and Alibaba, and building anticipation ahead of the Trump–Xi summit on 14–15 May.
· CSI 300: +1.34%
· Shanghai Composite Index (SSE): +1.65%
· Hang Seng Index(HSI): +2.39%
Key Highlights and outlook
1️⃣ Trump–Xi Summit Dominates Regional Narrative
The planned 14–15 May summit between U.S. President Trump and Chinese President Xi Jinping dominated the regional investment narrative, with officials on both sides reported to have intensified discussions on extending the current trade truce. Potential areas of agreement cited — including agricultural purchases, AI safeguards, and supply chain resilience — were interpreted by markets as constructive signals. However, officials cautioned against expectations of a major breakthrough, with unresolved tensions over Taiwan, technology controls, and rare earth export restrictions remaining live risks heading into the meeting.
2️⃣ April Services PMI Points to Resilient Domestic Demand
China's April services PMI rose to 52.6 from 52.1 in March, while the composite PMI output index improved to 53.1 from 51.5 — both firmly in expansionary territory and ahead of consensus. The improvement was driven by stronger domestic demand and faster new business formation, though export orders contracted for a second consecutive month, highlighting the continued bifurcation between resilient domestic activity and softening external demand amid ongoing tariff uncertainty. The data provided reassurance that the consumption base remains broadly intact.
3️⃣ Hong Kong Posts Strongest
Quarterly GDP Growth in Nearly Five Years
Hong Kong's Q1 2026 GDP expanded 5.9% year-on-year — its strongest quarterly growth in nearly five years — fuelled by booming AI-related electronics exports, stronger tourist arrivals, and improved consumer spending, with falling interest rates providing an additional tailwind to investment activity. Shenzhen's retail sales, however, told a more cautious story, rising just 0.5% in Q1 despite 5.8% export-driven GDP growth, highlighting the uneven transmission of the export boom to domestic household consumption amid persistent housing cost pressures.
4️⃣ China Banks Deliver
Resilient Q1 Results; ICBC and CCB Stand Out
China Construction Bank (939 HK) posted operating income growth of 11.0% YoY to RMB 206.4 billion, with non-interest income up 20.2% YoY and NPL ratio stable at 1.3%; FY26E dividend yield above 5.0% (BUY; TP HKD 10.15). ICBC (1398 HK) delivered operating income of RMB 222.0 billion, up 8.5% YoY on robust trading and investment gains, with NIM stable at 1.3% and FY26E dividend yield also above 5.0% (BUY; TP HKD 8.01). Both banks trade at meaningful discounts to book, offering defensive income appeal with steady upside potential. - MSSG Research
5️⃣ Alibaba Positioned as Domestic AI
Gateway Ahead of 13 May Earnings
Mainland investors continued buying Hong Kong-listed technology as a cheaper AI proxy, with Alibaba (9988 HK) and Tencent topping southbound net buy flows for the week. DeepSeek's V4 launch — touting top-tier reasoning and coding capabilities rivalling leading closed-source models — bolstered Alibaba's positioning, with its Cloud AI Gateway now integrating DeepSeek V4 APIs alongside its own Qwen models. Alibaba's earnings disclosure on 13 May will serve as the key near-term catalyst, with cloud AI revenue trajectory and DeepSeek integration progress the primary focus (BUY; TP HKD 166.0) - MSSG Research
Technical Snapshot
The Hang Seng rebounded after recent consolidation, with
technology and internet shares doing most of the heavy lifting. Broader price
action remains range-bound, suggesting the market still needs a stronger
catalyst for a clean breakout. The Trump–Xi summit will likely determine
whether the current recovery can extend further or slips back into a holding
pattern.
(Refer to the Hang Seng Index
constituents’ weekly performance table below.)
π Weekly charts:
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Singapore
Market Overview
Singapore’s Straits Times Index edged up
only slightly, but the headline move masked a clear split beneath the surface.
A few large-cap gainers offset weakness in REITs, shipbuilders, and
commodity-linked names. With a light domestic data calendar, the STI mostly
tracked global risk sentiment and remained in consolidation mode.
· Straits Times Index (STI): +0.19%
Key Highlights and Outlook
1️⃣ Venture Corp Surges on AI Hardware
Read-Through
Venture Corp was the top STI performer,
rising sharply on optimism tied to U.S. technology strength and electronics
demand. The move reflected improving sentiment toward AI-adjacent hardware and
manufacturing exposure. With its strong year-to-date gain, Venture remains one
of the index’s key growth-linked names.
2️⃣ Jardine Matheson, Hongkong Land, and
Wilmar Add Positive Contribution
Jardine Matheson and Hongkong Land both rose on improving sentiment toward Hong Kong and China-linked assets. Wilmar also advanced as agricultural commodity sentiment remained supportive. These names helped offset losses elsewhere and were among the main positive contributors to the STI.
3️⃣ REITs
Under Pressure as Rates Stay Elevated
REITs remained under pressure as U.S. yields stayed elevated and the outlook for rate cuts remained limited. That kept pressure on yield-sensitive names across the sector. The move was consistent with a broader global rotation away from defensives and toward growth. With the U.S. 10-year Treasury yield holding above 4.3% and the Fed firmly sidelined, rate-sensitive names continued to struggle to attract fresh capital despite broadly stable distribution trajectories, as the opportunity cost of holding yield plays remains elevated.
4️⃣ Shipbuilders and
Industrials Drag; Profit-Taking in Prior Outperformers
Yangzijiang Shipbuilding was the week’s biggest laggard, but the move should be read together with its ex-dividend trading. That makes the decline look more technical than fundamentally driven. Sembcorp Industries, CapitaLand Invest, and SGX also softened, reflecting broader profit-taking across cyclicals and prior outperformers.
Technical Snapshot
The STI’s small weekly gain masked weak
breadth and mixed sector performance. The index held above near-term support
but failed to build strong upside momentum. Near-term direction will likely
depend on how global tech sentiment and the Trump–Xi summit shape regional risk
appetite.
(Refer to the STI weekly performance
table below.)
π Weekly chart:
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Week Ahead (11-15 May 2026)
The coming week is packed with macro and geopolitical
catalysts that could reset near-term market direction. In the U.S., April CPI
will be the key domestic release, with any upside surprise likely to keep
pressure on rate-sensitive sectors and reinforce the Fed’s on-hold stance.
In China and Hong Kong, the Trump–Xi summit will be the
dominant event. Markets are looking for signs of trade-truce extension, tech
dialogue, or supply-chain cooperation, but the risk of disappointment remains
high. Alibaba’s earnings on 13 May will add another near-term test for the
China AI and cloud growth story.
π️ Overarching
Watchpoint
The Trump–Xi summit on 14–15 May is the single most
important binary event for global markets this week. A constructive tone could
extend the rally in Hong Kong and broader Asia, while a tense outcome could
quickly unwind recent gains. The summit outcome is likely to set the market
tone well beyond the immediate week.
Source: Some content and data are
excerpted from publicly available market reports.
