Global equities climbed in final week of May 2026, with sentiment anchored by rising hopes for a U.S.-Iran ceasefire deal and the reopening of the Strait of Hormuz, which pushed oil prices lower and lifted risk appetite. U.S. benchmarks closed at fresh record highs, with the Nasdaq leading the charge as AI-linked momentum held firm, even as April PCE inflation data printed hotter than expected and reinforced a hawkish Federal Reserve posture. China and Hong Kong markets were mixed — industrial profit growth accelerated sharply but fresh regulatory action against offshore brokerages weighed on Hong Kong sentiment and sent the Hang Seng lower. Singapore bucked the regional trend modestly, with the Straits Times Index slipping on profit-taking in financials and telecoms despite strength in select industrial and property names.
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United States
Market Overview
U.S. equity markets advanced in a
holiday-shortened week, with several major benchmarks closing at all-time highs
as falling oil prices and reported progress on a U.S.-Iran peace deal bolstered
investor sentiment. The SPX closed at an all-time record high of 7,581.65 on
Friday, May 29, 2026, officially clinching its ninth consecutive weekly gain. Markets
were closed Monday in observance of Memorial Day, but the remaining four
sessions were enough to push risk assets higher.
(Refer to the major indices' weekly
performance tables below.)
Major Indices – Weekly Performance
· Dow Jones Industrial Average (DJI):: +0.90%
· S&P 500 (SPX):: +1.43%
· Nasdaq Composite (COMP): +2.39%
Monthly Performance — May 2026
May 2026 delivered a strong month for
U.S. equities, with technology-led momentum driving the Nasdaq Composite to a
+8.36% monthly gain, its best monthly performance year-to-date. The combination
of easing geopolitical risk, resilient corporate earnings, and AI investment
enthusiasm underpinned the broad monthly advance, even as elevated inflation
kept rate-cut expectations firmly off the table.
(Refer to the major indices' monthly
performance table below.)
Key Highlights and Outlook
1️⃣ U.S.-Iran Ceasefire Hopes
Drive Risk Rally
Reports of a 60-day ceasefire extension
and a potential reopening of the Strait of Hormuz dominated the week's
narrative. Oil prices fell sharply, boosting equities and supporting a ninth
consecutive weekly gain in the S&P 500. While investor enthusiasm was
tempered by news of fresh U.S. strikes on Iranian targets, risk appetite held
firm through Friday on reports that a final deal was imminent.
2️⃣ April PCE Inflation
Rises; Fed Stays Hawkish
The BEA's April PCE price index rose 3.8% year-on-year — the hottest reading
since May 2023 — and core PCE accelerated to 3.3% annually. Fed Governor Cook
and Vice Chair Jefferson both flagged upside inflation risks and reinforced the
case for a prolonged hold. Markets continue to price a potential hike over the
next twelve months, limiting the scope for meaningful Treasury yield
compression.
3️⃣ GDP Revised Down, but Underlying
Demand Holds
Q1 2026 GDP was revised lower to a 1.6%
annualised pace, down from an initial 2.0% estimate, with the revision driven
by weaker investment and consumer spending. However, the business investment
and household spending proxy — a cleaner read on underlying activity — averaged
a healthier 2.2% over the past six months, pointing to resilience beneath the
volatile headline figure.
4️⃣ Durable Goods Orders Surge on
Transport Equipment
April durable goods orders jumped 7.9%,
driven by a 21.5% surge in transportation equipment orders. Core capital goods
orders — a proxy for business investment — fell 1.1% after a strong March,
moderating near-term capex expectations. The data reinforced a mixed but
broadly solid investment backdrop, with AI-related infrastructure spending
continuing to contribute meaningfully to aggregate growth.
5️⃣ AI Investment Cycle Continues to
Underpin Tech
Anthropic's valuation approached $1
trillion in a pre-IPO round, underscoring sustained investor confidence in AI
infrastructure. Business investment in informational processing equipment,
software, and R&D surged 6.4% annualised in Q1, contributing a full
percentage point to headline GDP. The scale of this AI investment cycle is now
being compared to the IT boom of the 1990s, with corporate commentary
indicating further spending commitments ahead.
6️⃣ Corporate Profits Remain Strong
Heading into Summer
GDP-derived corporate profits rose 12%
year-on-year in Q1 2026, the strongest reading since the post-pandemic rebound
in 2021. Domestic non-financial corporate margins stood at approximately 18%,
near post-Covid highs. The breadth and durability of profit growth supports an
overweight view on large- and mid-cap U.S. equities as market leadership
continues to broaden.
S&P 500 Sectors in Focus
Technology was the week's standout
performer, extending its year-to-date lead as AI enthusiasm and a more
favourable rate backdrop lifted large-cap names. Materials and Consumer
Discretionary also posted gains, benefitting from improved risk sentiment and
lower energy input costs. On the lagging side, Energy was the weakest sector by
a wide margin as falling oil prices eroded the sector's earnings outlook, while
Consumer Staples and Utilities retreated as defensive positioning unwound
alongside the broader risk-on tone.
(Refer to the SPX sector ETF weekly
performance table below.)
Technical Snapshot
The S&P 500 (SPX) closed at fresh
record highs, with price action holding comfortably above its 20-week and
50-week moving averages on continued volume. The Nasdaq Composite (COMP)
confirmed technical breakout momentum, with the AI-driven mega-cap complex
providing consistent breadth leadership through the week. The Dow Jones
Industrial Average (DJI) lagged relatively but remained in a constructive
trend; the near-term risk is a pullback should the Iran deal unravel or PCE
data continue to surprise to the upside.
π Weekly charts:
π¨π³
China / Hong Kong
Market Overview
China and Hong Kong markets were mixed
during a shortened trading week, with Hong Kong closed on 25 May for Buddha's
Birthday. The blue chip benchmark CSI 300 Index edged up 0.97%, the Shanghai
Composite Index(SSE) fell 1.08%, reversing the prior week's modest gains
as regulatory news flow weighed on sentiment. The Hang Seng Index (HSI)
declined -1.65%, dragged by brokerage sector sell-offs following the CSRC
crackdown on offshore online trading platforms. Southbound flows remained
broadly negative on net, with Alibaba and Tencent among the top net sells for
the week.
Index Weekly Performance
· CSI 300: +0.97%
· Shanghai Composite Index (SSE): -1.08%
· Hang Seng Index(HSI): -1.65%
Key Highlights and outlook
1️⃣ CSRC Crackdown on Offshore
Brokerages Rattles HK
China's securities regulator imposed
fines and rectification measures on Tiger Brokers, Futu Holdings, and
Longbridge Securities for operating without the required mainland licences. The
action triggered sharp declines in offshore-listed brokerage shares and
contributed materially to Hong Kong's weekly decline. Regulators appear focused
on channelling retail flows through formal, regulated platforms such as Stock
Connect.
2️⃣ Industrial Profits Surge but
Recovery Remains Patchy
April industrial profits jumped 24.7%
year-on-year, accelerating from 15.8% in March, supported by stronger earnings
in energy, raw materials, and technology-related exports. However,
consumer-facing industries including furniture and autos reported weaker
profitability, highlighting the uneven nature of China's recovery. Policy
support and external demand remain the key props for industrial earnings
momentum.
3️⃣ AI Infrastructure Stocks Attract
Southbound Interest
SMIC and Hua Hong Semiconductor led
southbound net buys for the week, reflecting continued investor appetite for
domestic AI infrastructure and semiconductor names. Baidu's AI cloud revenue
surged 79% year-on-year in Q1 2026, with AI-powered services now accounting for
more than half of group revenue for the first time. GDS Holdings also reported
strong Q1 results, with adjusted EBITDA rising 47.2% year-on-year on hyperscale
data centre demand.
4️⃣ Hong Kong Positions as Global Wealth
Hub Rival
Hong Kong overtook Switzerland as the
world's largest cross-border offshore wealth centre, with assets under
management reaching USD 2.95 trillion according to BCG data. HKEX CEO Bonnie
Chan separately pitched the city to Central Asian sovereign issuers as a
secondary listing venue, citing average daily turnover of HKD 270 billion. The
dual messaging underscores Hong Kong's ongoing effort to broaden its capital
markets positioning despite lingering geopolitical sensitivities.
5️⃣ Consumer Platform Stocks Offer
Selective Opportunities
NetEase (9999.HK) continued to
demonstrate resilient earnings momentum with Q1 2026 revenue up 6.1%
year-on-year and gross profit rising 14.8%, driven by strong gaming titles and
expanding overseas operations. Tongcheng Travel (780.HK) posted 14.4% revenue
growth and 19.4% adjusted profit growth in Q1, underpinned by resilient
domestic travel demand and deepening penetration into lower-tier cities. Both
names trade at undemanding valuations relative to peers. (MSSG Reports)
Technical Snapshot
The Hang Seng Index (HSI) closed at 25,182, retreating below
near-term support amid brokerage sector headwinds and net southbound outflows.
The SSE Composite remains in a corrective phase near the 4,050–4,150 range
following the prior month's sharp advance, with the index down -1.08% for the
week but still holding a modest year-to-date gain. Sentiment stabilisation will
likely require a combination of cleaner regulatory news flow and confirmation
that AI infrastructure demand is translating into broader earnings upgrades
across the tech complex.
(Refer to the Hang Seng Index
constituents’ weekly performance table below.)
πΈπ¬
Singapore
Market Overview
The Straits Times Index (STI) dipped -0.60% for the final week of May. Despite the modest weekly pullback, the STI held a solid year-to-date advance of +8.43%, supported by a strong performance in May. SATS led all STI constituents with a gain of +17.38%, while City Development and Sembcorp Industries also posted meaningful weekly gains. At the other end, Jardine Matheson, Singtel, and Seatrium were the week's laggards.
Index Weekly Performance
· Straits Times Index (STI): +0.19%
Key Highlights and Outlook
1️⃣ SATS Surges on Aviation Demand
Recovery
SATS (S58) shot up +17.38% for the week,
easily the best performer among STI constituents. The move likely reflects a
combination of recovering air travel volumes, supported by FY26 revenue growth
to a record S$6.35bn and higher cargo and flight volumes. The stock's
year-to-date gain remains modest at +1.05%, suggesting the week's move may
reflect catch-up with the broader recovery theme.
2️⃣ REITs Under Pressure from Rate and
Macro Headwinds
Singapore's REIT sub-sector remained
under pressure, with CapAscendas REIT (-0.79%), CapLand IntCom Trust (-0.87%),
and Mapletree Industrial Trust (-0.51%) all in the red for the week. The
persistently elevated rate environment continues to weigh on distribution
yields relative to risk-free alternatives, keeping sentiment cautious. Keppel
DC REIT bucked the trend with a +0.87% gain, supported by data centre demand
tailwinds.
Technical Snapshot
The STI closed at 5,037.86,
consolidating near the 5,000–5,100 support zone after last week's modest
pullback. The index remains above its 20-week moving average, preserving the
medium-term uptrend that has been in place since early 2026. A sustained hold
above 5,000 would be required to maintain the constructive technical setup; a
break below that level could signal a deeper retracement toward the 4,900 area.
(Refer to the STI stocks weekly performance table below.)
π Weekly chart:
π
Week Ahead (1-5 June 2026)
U.S. May nonfarm payrolls report (Friday) as the key data
event, with consensus expecting a moderation in job gains following April's
stronger-than-expected print. ISM manufacturing PMI is due on Monday, with
services PMI following mid-week.
π️ Overarching
Watchpoint
The durability of the U.S.-Iran ceasefire narrative is the
single biggest binary risk for the week ahead. A confirmed, durable deal with
Strait of Hormuz reopening would further compress oil prices, ease inflation
expectations, and extend the equity rally; a breakdown or fresh military
escalation would quickly reverse the week's risk-on gains and reprice rate
expectations higher.
Source:
Some content and data are excerpted from publicly available market reports.
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