For the week of Jun 13, global equity markets navigated a volatile but ultimately constructive week, as easing Middle East tensions and broadening market leadership offset mixed inflation data and turbulence in large-cap technology names. In the United States, all three major indices edged higher as the historic SpaceX IPO captured investor attention and rotation into cyclicals, financials, and small-caps gathered momentum even as semiconductor stocks pulled back sharply. Chinese equities delivered a split verdict — strong export data and resilient PPI growth underpinned the Shanghai Composite, while the Hang Seng slipped as weaker offshore sentiment and Pentagon scrutiny of Chinese technology firms weighed on Hong Kong-listed names. Singapore's Straits Times Index dipped modestly, dragged by profit-taking in the local banks and select industrials, even as S-REITs and logistics trusts provided partial support.
πΊπΈ
United States
Market Overview
U.S. equities extended their recovery
for a second consecutive week, with the Dow Jones Industrial Average (DJI)
gaining +0.66%, the S&P 500 (SPX) adding +0.65%, and the Nasdaq Composite
(COMP) advancing +0.70%, as improving geopolitical sentiment around a possible
U.S.–Iran agreement offset a sharp mid-week selloff in semiconductor stocks.
Beneath the surface, the week was defined by rotation rather than breadth, with
small-caps, financials, and defensives outperforming while the concentrated AI
trade took a breather. The Russell 1000 Value Index outpaced its growth
counterpart for the second consecutive week, reinforcing the broadening theme.
(Refer to the major indices' weekly
performance tables below.)
Major Indices – Weekly Performance
· Dow Jones Industrial Average (DJI):: +0.66%
· S&P 500 (SPX):: +0.65%
· Nasdaq Composite (COMP): +0.70%
Key Highlights and Outlook
1️⃣ Semiconductor Pullback
Interrupts AI Rally
The Philadelphia Semiconductor Index,
which had nearly doubled year-to-date, fell approximately 12% before partially
recovering, as profit-taking after a parabolic rally — rather than any
fundamental deterioration — drove the move. Large cloud providers continue to
ramp AI infrastructure spending, reinforcing the longer-term structural demand
thesis even as near-term positioning resets.
2️⃣ SpaceX Completes
Record-Breaking IPO
SpaceX raised approximately USD 75 billion in the largest public offering in
history, priced at USD 135 per share and implying a valuation near USD 1.8
trillion. With a free float of under 5%, index inclusion will be gradual — the
S&P 500 has declined to fast-track eligibility, requiring a standard
12-month seasoning period — limiting near-term passive demand but preserving
scarcity premium.
3️⃣ CPI Rises to 4.2% YoY as Energy
Drives Headline Inflation
May CPI rose 4.2% year over year, the
highest reading since April 2023, driven by a 10.7% month-over-month surge in
energy prices within the PPI. Core CPI, however, moderated to +0.2% month on
month (from +0.4% in April), with goods deflation reappearing for the first
time in a year, providing the Fed with room to remain patient rather than pivot
to tightening.
4️⃣ Fed Holds,
Likely to Remove Easing Bias at June Meeting
With headline inflation energy-driven
and core pressures contained, the Fed is expected to keep rates on hold while
removing its explicit easing bias at the upcoming meeting. A prolonged pause —
rather than a renewed tightening cycle — remains the base case, a backdrop that
continues to support equity valuations as long as economic growth stays
resilient and earnings momentum persists.
5️⃣ Market Breadth Improves;
Equal-Weight SPX Outperforms
The equal-weight S&P 500 is now
outperforming its cap-weighted counterpart by approximately 2 percentage points
year-to-date (11% vs. 9%), with financials, healthcare, consumer staples, and
small-caps gaining relative traction. This shift away from narrow mega-cap
leadership toward broader participation is viewed as a constructive development
for the sustainability of the bull market cycle.
6️⃣ Geopolitics: U.S.–Iran De-escalation
Supports Risk Sentiment
President Trump's cancellation of
planned U.S. strikes on Iran and reports of progress toward a bilateral
agreement helped compress oil prices and Treasury yields through the latter
part of the week. A sustained reopening of the Strait of Hormuz would provide
meaningful relief to both energy prices and headline inflation — representing
the key upside catalyst for a further broadening of equity market leadership.
S&P 500 Sectors in Focus
Sector performance diverged sharply in
Week 24, with defensive and cyclical names leading while energy and
communications services lagged.
(Refer to the SPX sector ETF weekly
performance table below.)
Technical Snapshot
The S&P 500 (SPX) at 7,431.46,
posting a modest weekly gain that kept the index in a narrow consolidation
range. The Index had fantastic nine-week up streak before 2.6% down by profit-taking
and stabilising this week. Weekly uptrend still holding well.
π Weekly charts:
π¨π³
China / Hong Kong
Market Overview
Chinese equity markets delivered a split
result in Week 24, with divergent performance between onshore and offshore
markets reflecting differing risk appetites and thematic drivers. The CSI 300
fell -0.82% while the Shanghai Composite (SSE) eked out a marginal +0.09% gain,
as strong trade data and accelerating PPI provided some support to onshore
sentiment. The Hang Seng Index (HSI) underperformed with a -0.98% decline,
weighed by weaker offshore risk appetite, the Pentagon's expanded
military-entity list targeting several blue-chip Chinese technology names, and
renewed regulatory action in the e-commerce sector.
Index Weekly Performance
· CSI 300: -0.82%
· Shanghai Composite Index (SSE): +0.09%
· Hang Seng Index(HSI): -0.98%
Key Highlights and outlook
1️⃣ Exports Surge 19.4% YoY, AI
Hardware Drives Outperformance
China's May exports rose 19.4% year over
year, accelerating from 14.1% in April and materially exceeding market
expectations. Semiconductor exports more than doubled from a year earlier, with
AI-related goods — electric vehicles, computing equipment, and advanced
manufacturing — remaining the key engine of external demand. The trade surplus
widened to USD 105.4 billion, reinforcing the structural role of exports as a
buffer for the still-fragile domestic recovery.
2️⃣ CPI-PPI Divergence Widens; Margin
Pressure Builds
China's PPI rose 3.9% year over year in
May, accelerating for a third consecutive month and reaching its highest level
since July 2022, driven by rising commodity and energy costs. CPI remained
anchored at 1.2%, unchanged from April, highlighting the absence of meaningful
cost pass-through to consumers. The widening CPI-PPI gap points to mounting
pressure on corporate profit margins, particularly for domestic-facing
industries with limited pricing power.
3️⃣ Pentagon Blacklist Expands to
Alibaba, Baidu, BYD, WuXi AppTec
The U.S. Department of Defense expanded
its list of alleged Chinese military-linked companies to include Alibaba,
Baidu, BYD, WuXi AppTec, Yangtze Memory Technologies, and Unitree Robotics. The
designation stops short of broad sanctions but restricts U.S. defence
procurement and heightens regulatory and reputational risk. Several named
companies have disputed the designation; investors should monitor for secondary
effects on institutional ownership and index eligibility reviews.
4️⃣ 618 Festival Regulatory Action
Creates Tactical Entry Opportunity
Regulatory action against e-commerce
platforms over misleading advertising practices during the mid-year 618
shopping festival triggered a late-week pullback in the sector. While the
immediate impact is sentiment-driven rather than structural, the dip presents a
tactical entry for investors with medium-term conviction, particularly in names
with diversified revenue streams and export-market exposure. Midea (00300.HK)
and JD.com (09618.HK) are highlighted as well-positioned beneficiaries given
their capacity to capture incremental AI-linked and cross-border demand.
(MSSG
Research)
Technical Snapshot
The Hang Seng Index closed at 24,718, extending its negative
year-to-date trend (-3.56%) with a weekly loss of -0.98%, as the index
struggled to sustain a recovery above the psychologically important 25,000
level. Near-term support is seen around 24,400–24,500, with a break below
risking a retest of the April lows. The HSI's underperformance relative to the
onshore CSI 300 reflects lingering offshore risk aversion tied to geopolitical
developments and tech-sector regulatory noise; a resolution of U.S.–China
technology tensions or a sustained rally in AI-linked names could be the
catalyst needed to close the gap.
(Refer to the Hang Seng Index
constituents’ weekly performance table below.)
πΈπ¬
Singapore
Market Overview
The Straits Times Index (STI) slipped
-0.48% to close at 5,025.80 in Week 24, paring back some of its year-to-date
outperformance (+8.17%) as the local banking trio came under selling pressure
and selected industrial names corrected. The retreat was orderly rather than
alarming, with S-REITs and logistics trusts providing a partial cushion.
Index Weekly Performance
· Straits Times Index (STI): -0.48%
Key Highlights and Outlook
1️⃣ Banks Retreat on Profit-Taking;
Sector Remains Well-Supported
DBS (D05) fell -0.85%, UOB (U11) -1.01%,
and OCBC (O39) -1.84% on the week, as investors took profits in the sector's
strongest year-to-date performers after a sustained run. The pullback is likely
technical in nature rather than fundamentals-driven — Singapore bank NIMs
remain resilient in a high-for-longer interest rate environment, and capital
return visibility is strong.
2️⃣ S-REITs Stage Selective Recovery;
Rate Sensitivity in Focus
S-REIT performance diverged along
quality and sub-sector lines, with logistics and industrial names outperforming
while retail and commercial trusts lagged. Mapletree
Logistics Trust (M44U, +3.39%), CapLand IntCom Trust (C38U, +3.08%), and
CapLand Ascendas REIT (A17U, +2.43%) led the advance as market participants
positioned for a potential moderation in U.S. Treasury yields following signs
of cooling core inflation. A sustained decline in the 10-year UST yield toward
4.30–4.40% would be a meaningful tailwind for S-REIT valuations.
3️⃣ STI Consolidates Near
5,000; Support Holds Amid Global Choppiness
The STI's ability to hold above the 5,000 psychological
support level in the face of global volatility and domestic bank profit-taking
underscores the resilience of the local market's earnings foundation.
(Refer to the STI weekly performance
table below.)
π Weekly chart:
π
Week Ahead (15-19 June 2026)
In the United States, markets will focus on the Federal
Reserve's June FOMC meeting and accompanying press conference on Jun 16-17( US EST)
π️ Overarching
Watchpoint
The single biggest binary risk for the week is the Federal
Reserve's June policy statement and Powell's press conference. While no rate
change is expected, the tone around the removal of the easing bias — and
whether policymakers signal any concern about energy-driven headline inflation
becoming entrenched — could move both Treasury yields and risk assets
meaningfully in either direction, setting the trajectory for equity and credit
markets into the second half of 2026.
Source:
Some content and data are excerpted from publicly available market reports.
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