Eight Weeks and Counting: Yields Rise as Equities Hold Firm

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. 

🇺🇸 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.

📊 Weekly charts:

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

 

🇨🇳 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.)

📊 Weekly charts:

SSE weekly chart

HSI weekly chart

 

🇸🇬 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.)

📊 Weekly charts:

STI weekly chart

 

📅 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.

 

🗓️ 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.