Global equities navigated a week of diverging signals, as rising Treasury yields and sticky inflation pressures tested market resilience across asset classes. U.S. stocks extended their winning streak to eight consecutive weeks — the longest run since 2023 — powered by AI optimism from NVIDIA's strong earnings and cautious optimism around U.S.-Iran negotiations, even as record-low consumer sentiment and surging input costs kept the mood measured. Chinese mainland markets edged lower on disappointing April activity data that missed expectations on industrial output and retail sales, while Hong Kong bore sharper declines as technology and export-sensitive sectors faced headwinds from higher global yields and softening foreign risk appetite. Singapore bucked the regional softness, with the Straits Times Index advancing on broad-based constituent gains led by industrials, financials, and select mid-cap names.
πΊπΈ United States
Market Overview
The Dow Jones Industrial Average (DJI) surged to a fresh all-time high, gaining +2.13% and marking the standout move of the week among major U.S. benchmarks, while the S&P 500 (SPX) added +0.88% for its eighth straight weekly advance — the longest winning streak since 2023. The Nasdaq Composite (COMP) rose a more modest +0.45%, with gains underpinned by NVIDIA's stronger-than-expected earnings and sustained AI sector momentum, even as the 10-year Treasury yield climbed toward 4.69% mid-week before partially retreating on U.S.-Iran negotiation optimism. Small-cap and value stocks outperformed large-cap and growth shares, and the equal-weighted S&P 500 outpaced its market cap-weighted counterpart, pointing to broadening participation beneath the headline numbers.
(Refer to the major indices' weekly
performance tables below.)
Index Weekly Performance
- Dow Jones Industrial Average (DJI): +2.13%
- S&P 500 (SPX): +0.88%
- Nasdaq Composite (COMP): +0.45%
Key Highlights and Outlook
1️⃣ Eight-Week Winning Streak, Broadening Participation
The S&P 500 closed higher
for the eighth consecutive week — its longest unbroken advance since 2023 —
with the Dow reaching a fresh all-time high. Notably, small-cap and value
stocks outperformed, and the equal-weighted index outpaced its market-cap-weighted
counterpart, suggesting the rally is becoming less concentrated and more
durable across sectors and market segments.
2️⃣ NVIDIA Earnings Reinforce AI Investment Thesis
NVIDIA's stronger-than-expected
quarterly results provided the key mid-week catalyst, reinforcing the AI-driven
earnings narrative that has underpinned much of the market's recovery since
April. The results helped offset geopolitical uncertainty stemming from the
ongoing U.S.-Iran conflict and kept technology-adjacent names well supported
despite the backdrop of rising rates.
3️⃣ Treasury Yields Test Equities; Fed Signals Hawkish
Patience
The 10-year Treasury yield
climbed to a midweek peak of 4.69% — near the top of its three-year range —
before retreating to around 4.56% as diplomacy headlines provided relief. Fed
minutes from the April meeting showed a majority of policymakers open to further
tightening if inflation remains persistently above the 2% target, reinforcing a
higher-for-longer rate narrative that could test valuations if yields resume
their ascent.
4️⃣ Inflation Metrics Remain Concerning
May flash PMI data showed input
costs rising at the fastest pace since late 2022, with selling price inflation
also accelerating sharply. Headline CPI reached 3.8% in April while producer
prices climbed 6%, raising the question of whether inflation pressures extend
beyond energy alone. The University of Michigan's Consumer Sentiment Index fell
to a record low of 44.8, with one-year inflation expectations rising to 4.8% —
the highest since the Middle East conflict began.
5️⃣ Housing Market Remains Depressed
The NAHB Housing Market Index
edged up to 37 but stayed below the neutral threshold of 50 for the 25th
consecutive month, as 30-year mortgage rates climbed to 6.51% — the highest
since August. Housing starts declined and pending home sales growth decelerated,
underscoring the drag that elevated borrowing costs continue to exert on the
interest-rate-sensitive housing sector.
6️⃣ U.S.-Iran Diplomacy Provides Partial Market Relief
President Trump's comment that
U.S.-Iran talks were in their "final stages" provided a mid-week
sentiment boost, helping Treasuries recover and moderating equity volatility.
No deal was finalised, and the situation remained fluid, but investors
increasingly priced a diplomatic resolution as the more probable scenario, with
oil prices easing slightly — a development that could offer meaningful relief
to headline inflation if a deal materialises.
S&P 500 Sectors in Focus
Defensive and rate-sensitive sectors led the week's advance, with Utilities and Health Care posting the strongest gains, followed closely by Real Estate — the latter likely reflecting positioning around expectations that any Middle East de-escalation could ease inflationary pressures and eventually bring rates lower. Technology continued to outperform on an absolute basis, supported by NVIDIA's earnings beat and the broader AI capex cycle narrative, while Consumer Discretionary also advanced solidly. At the other end of the table, Communication Services was the sole sector to close in negative territory, while Materials ended essentially flat, weighed by uncertainty over the global demand outlook.
(Refer to the SPX sector ETF weekly performance
table below.)
Technical Snapshot
The S&P 500 (SPX) extended its eight-week winning streak,
consolidating near recent highs with momentum indicators remaining
constructive, though mildly overbought conditions warrant attention should
Treasury yields resume their advance. The Dow Jones Industrial Average (DJI)
confirmed its breakout to a fresh all-time high, a technically significant
development that reinforces the underlying strength in blue-chip equities. The
Nasdaq Composite (COMP) lagged on a relative basis but remains well above its
key moving averages; a shallow pullback toward recent breakout levels would
likely represent a constructive entry opportunity rather than a trend reversal.
π Weekly charts:
SPX weekly chart
Nasdaq weekly chart
π¨π³ China / Hong Kong
Market Overview
Chinese equities retreated over the week as disappointing April activity data renewed concerns about the durability of the domestic recovery. The CSI 300 Index declined -0.30% and the Shanghai Composite (SSE) fell -0.54%, with mainland markets proving relatively resilient compared to Hong Kong, where the Hang Seng Index (HSI) dropped -1.37% as technology and export-sensitive sectors faced compounded pressure from higher global yields and softer foreign risk appetite. Bright spots were limited — notable weekly gainers within the HSI included Lenovo and Sunny Optical, while the bulk of the index gave ground.
Index Weekly Performance
- CSI 300 (CSI 300): -0.30%
- Shanghai Composite (SSE): -0.54%
- Hang Seng Index (HSI): -1.37%
Key Highlights and Outlook
1️⃣ April Activity Data Miss Revives Stimulus Expectations
China's April activity data
missed consensus on all key metrics: industrial output grew 4.1% year over year
versus 5.7% in March, while retail sales expanded just 0.2% YoY — the weakest
reading since late 2022. Fixed asset investment contracted in the January-to-April
period. The persistent weakness in property-related activity and soft
consumption data raised market expectations for additional targeted fiscal or
sector-specific support measures heading into the second quarter.
2️⃣ PBOC Holds Rates; Targeted Stimulus Seen as Preferred
Tool
The People's Bank of China left
the one-year Loan Prime Rate at 3.00% and the five-year LPR at 3.50% for the
12th consecutive month, matching market expectations but reinforcing a posture
of deliberate restraint. The steady-rate decision suggested Beijing's near-term
preference for targeted fiscal measures and accelerated infrastructure project
rollouts — some approved in 1Q26 — over broad-based monetary easing, with
selective support for priority sectors the more likely lever to prop up
domestic demand.
3️⃣ Putin-Xi Summit Reinforces Sino-Russian Ties Amid
Washington Pivot
Russian President Vladimir Putin
visited Beijing on May 19–20, with China and Russia signing over 40 bilateral
agreements spanning trade, energy, technology, and media cooperation.
Discussions around the proposed Power of Siberia 2 gas pipeline attracted
attention, though no final agreement was announced. The summit underscored
Beijing's dual-track foreign policy — maintaining deep strategic alignment with
Moscow while simultaneously stabilising the relationship with Washington
following the Xi-Trump bilateral meeting earlier in May.
4️⃣ Copper and Semiconductors Emerge as Structural Plays
Elevated global oil prices and
the ongoing U.S.-Iran stalemate continued to support the case for inflation
hedges. Copper producers — including Jiangxi Copper (358 HK), rated BUY with a
12M target price of HKD 46.63 — attracted interest as structural demand drivers
from AI data centres, renewable energy infrastructure, and grid upgrades
converge with a tightening global supply picture. Meanwhile, SMIC (981 HK),
rated BUY with a 12M target price of HKD 88.00, reported 1Q26 revenue up 11.5%
YoY with gross margin ahead of expectations at 20%, and guided for revenue
growth of 14–16% QoQ in 2Q26 — reinforcing its position as a key beneficiary of
China's semiconductor localisation drive.
5️⃣ World Cup Catalyst Approaching for Consumer and
Streaming Names
With the 2026 FIFA World Cup
kicking off on 11 June, event-driven positioning began building around
streaming and consumer-facing equities. China Mobile (941 HK), rated BUY with a
12M target of HKD 95.00, could benefit via its Migu streaming platform, while
Budweiser APAC (1876 HK), rated BUY with a 12M target of HKD 9.16 and a forward
dividend yield of 6.2%, returned to volume growth in China in 1Q26 and is
positioned to capture peak summer season and World Cup consumption momentum
across key Asian markets.
Technical Snapshot
The Hang Seng Index (HSI) extended its pullback from April
highs, closing the week lower and testing near-term support around the 25,600
level with momentum indicators turning neutral-to-negative. The Shanghai
Composite (SSE) displayed relative resilience, declining modestly and stuck between its 20-50 day moving average, reflecting the market's awareness of
potential policy support as a floor. A sustained hold of the HSI above the
25,000–25,200 support band is essential to preserve the broader uptrend; failure
to do so would likely invite further selling and shift the technical picture to
cautious.
(Refer to the Hang Seng Index constituents’ weekly performance table below.)
π Weekly charts:
πΈπ¬ Singapore
Market Overview
The Straits Times Index (STI) rose +1.58% over the week,
closing at 5,068.15 and outperforming both Hong Kong and mainland Chinese
benchmarks, as Singapore equities benefited from a constructive global backdrop
and broad-based constituent participation. Gains were well distributed across
industrials, financials, and select property and REIT names, with only a
handful of index constituents closing lower on the week.
Index Weekly Performance
- Straits Times Index (STI): +1.58%
Key Highlights and Outlook
1️⃣ STI Outperforms Region on Broad Participation
The STI's +1.58% advance —
bringing its YTD gain to +9.08% — stood in contrast to the declines recorded in
Hong Kong and mainland China, reflecting Singapore's positioning as a relative
safe harbour in the region. All three local banks contributed positively to the
advance, with DBS, OCBC, and UOB all ending the week higher as investors
continued to favour dividend-yielding blue-chips in a higher-for-longer rate
environment.
2️⃣ ST Engineering and SGX Lead the Week's Gainers
ST Engineering (S63) surged
+8.68%, the strongest single-stock performance in the index, likely driven by
earnings momentum and sustained demand for its defence and aerospace
businesses. SGX (S68) added +6.01%, supported by elevated regional trading volumes
and its structural position as a beneficiary of cross-border market activity;
ThaiBev (Y92) rounded out the top performers at +6.98%, rebounding from prior
weakness.
3️⃣ S-REITs Stabilise; CapAscendas and Mapletree PACT
Recover
Select S-REITs within the STI
staged a partial recovery, with CapitaLand Ascendas REIT (A17U) and Mapletree
PACT (N2IU) both advancing after recent underperformance. While both names
remain in negative YTD territory, the week's price action suggested some
stabilisation as rate expectations plateaued and yield-seeking buyers returned
to retest support levels in the sector.
4️⃣ Wilmar, Singtel, and YZJ Shipbuilding Lagged
Wilmar (F34) declined -5.53%,
extending recent weakness as commodity price headwinds and margin concerns
continued to overhang the stock. Singtel (Z74) slipped -4.77% amid sector
rotation out of telcos, while YZJ Shipbuilding (BS6) fell -4.79% in what appeared
to be profit-taking after its solid YTD run. These laggards were more than
offset by broad gains elsewhere in the index, keeping the overall tone firmly
positive for the week.
Technical Snapshot
The STI maintained its positive trajectory, advancing to
5,068.15 and approaching the upper boundary of its recent trading range with
momentum indicators remaining constructive. The index's +9.08% YTD gain
reflects sustained institutional interest in Singapore-listed blue-chips, and
the week's advance was accompanied by reasonably broad participation — a
healthy signal for trend continuation. A hold above the 5,000 level would
reinforce the near-term uptrend, with the next meaningful resistance zone around
5,100–5,150; near-term pullbacks toward 5,000 should be viewed as support
rather than signal.
(Refer to the STI weekly performance table below.)
π Weekly charts:
π
Week Ahead (26–30 May 2026)
U.S. markets will focus on the April core PCE deflator — the
Fed's preferred inflation gauge — alongside the second estimate of Q1 GDP, both
of which carry significant implications for the rate outlook. Any fresh
commentary from Fed officials on the pace of policy adjustment and the
trajectory of U.S.-Iran negotiations will remain closely watched; a diplomatic
breakthrough could materially alter the inflation and yield picture heading
into June.
In China and Hong Kong, May official PMI data will offer an
early read on whether the momentum loss seen in April's activity numbers has
extended into the second quarter. Any signalled fiscal support measures or
accelerated infrastructure approvals from Beijing would be monitored as
potential catalysts for a stabilisation in both mainland and Hong Kong equities
heading into the World Cup period.
π️ Overarching Watchpoint
The April U.S. core PCE print is the single most consequential
data point of the week: a reading that confirms inflation remains stubbornly
above the Fed's comfort zone would push markets to price a higher-for-longer
rate path more aggressively, applying fresh pressure to equity valuations and
potentially snapping the S&P 500's eight-week winning streak. Conversely, a
softer-than-expected print — or concurrent progress on U.S.-Iran talks — could
provide the conditions for the rally to extend further into June.
Source:
Some content and data are excerpted from publicly available market reports.
