For the week of Jul 10, markets navigated a week in which renewed U.S.–Iran tensions lifted oil prices, but equities largely looked through the geopolitical noise and stayed focused on AI momentum ahead of the second-quarter earnings season. U.S. indices closed mixed, as a late-week rebound in semiconductor and AI-related shares lifted the Nasdaq and S&P 500 while the Dow lagged. Greater China diverged sharply, with Hong Kong outperforming on strength in internet heavyweights even as mainland benchmarks slipped on late-week profit-taking in semiconductors. Singapore stole the regional spotlight, as record-setting bank stocks powered the Straits Times Index to fresh all-time highs.
(Refer to the major indices' weekly performance tables below.)
πΊπΈ
United States
Market Overview
Major U.S. indices closed the week mixed. A late-week rebound in semiconductor and AI-related shares helped the Nasdaq Composite (COMP) gain 1.74% and the S&P 500 (SPX) advance 1.23%, overcoming earlier volatility driven in part by higher oil prices and renewed U.S.–Iran hostilities, while the Dow Jones Industrial Average (DJI) declined 0.50%. Growth stocks solidly outpaced value, and trading volumes stayed light ahead of a busy week of earnings, inflation data and retail sales.
Index Weekly Performance
- Dow Jones Industrial
Average (DJI): -0.50%
- S&P 500 (SPX): +1.23%
- Nasdaq Composite (COMP): +1.74%
Key Highlights and Outlook
1️⃣ Fed Minutes Reveal Divergence Over Policy Path
Minutes from the Federal
Reserve's June meeting showed a few policymakers saw a case for raising rates,
though all ultimately backed leaving borrowing costs unchanged. Officials were
divided over the path for the rest of the year amid elevated uncertainty, and
most supported removing language implying an easing bias — a somewhat hawkish
signal.
2️⃣ Geopolitics a Wildcard, Not a Game Changer
Iran resumed attacks on shipping
in the Strait of Hormuz, the U.S. launched fresh strikes and revoked Iranian
oil waivers, and Iran hit bases in Kuwait and Bahrain. Oil briefly rose 5% to
about USD 72 per barrel — well below March's USD 120 peak — and equities proved
far less sensitive to oil spikes than earlier this year.
3️⃣ Economic Data Steady in a Light Week
The ISM services PMI eased to
54.0 in June, a 24th straight month in expansion, with the employment component
returning to growth. Initial jobless claims dipped to 215,000, while existing
home sales fell 2.4% to a 4.09 million annual rate as elevated prices and
borrowing costs continued to squeeze affordability.
4️⃣ Treasury Yields Climb on Oil and Hawkish Minutes
U.S. Treasuries generated
negative returns as rising oil prices and the Fed minutes pushed yields higher
across most maturities, with the 10-year yield up to about 4.56% from 4.49%.
Investment-grade corporates underperformed, and high yield sentiment weakened
midweek on revived inflation concerns before stabilising into the close.
5️⃣ A High Bar Into Q2 Earnings Season
S&P 500 earnings are
expected to grow 23% year over year — a second straight quarter above 20% — on
12% revenue growth, with estimates unusually revised higher into the season.
Technology and energy are set to drive roughly 80% of total earnings growth, so
the focus shifts to whether the pace of improvement is still accelerating.
6️⃣ Second-Half Leadership Set to Broaden
Strategists expect rotations
within and beyond technology to define the second half: stay exposed to AI but
complement it with mid-caps, industrials and communication services, where
valuations are less stretched. Returns are likely to become less momentum-driven
and more dependent on earnings delivery, valuation discipline and sector
rotation.
S&P 500 Sectors in Focus
Information technology led
sector performance for the week, with energy and communication services also
posting strong gains as AI leadership reasserted itself and higher crude prices
supported energy names. Materials and health care were the weakest performers,
alongside softness in defensives such as consumer staples and utilities. The
pattern mirrored the earnings picture, where technology and energy have driven
the bulk of upward estimate revisions heading into reporting season.
(Refer to the SPX sector ETF
weekly performance table below.)
Technical Snapshot
The Nasdaq and S&P 500
closed the week near record territory after Friday's rebound in semiconductors
restored the prevailing uptrend. The Dow lagged, slipping 0.50% as the rise in
the 10-year Treasury yield toward 4.56% weighed on rate-sensitive and value
pockets. With earnings season starting, the near-term bias stays constructive
provided the benchmarks hold their recent breakout zones and yields remain
contained.
π Weekly charts:
π¨π³
China / Hong Kong
Market Overview
China equities diverged during
the week. Mainland benchmarks declined despite a sharp but narrow rally in AI,
semiconductor and technology self-sufficiency plays, with the CSI 300 falling
1.27% and the Shanghai Composite (SSE) down 1.17%, while the Hang Seng Index
(HSI) surged 3.53% on strength in large internet stocks. Divergence within the
technology complex widened, as discounted capital raisings and volatility among
pure-play AI developers offset the sector's earlier gains. (Refer to the major
indices' weekly performance tables above.)
Index Weekly Performance
- CSI 300: -1.27%
- Shanghai Composite (SSE): -1.17%
- Hang Seng Index (HSI): +3.53%
Key Highlights and Outlook
1️⃣ Hong Kong Outperforms on Internet Heavyweights
The HSI's advance was powered by
the internet complex, with Alibaba jumping 17.11%, Lenovo up 14.93%, Xiaomi
gaining 12.54% and Meituan adding 9.92%, while health care and materials shares
lent support on Friday. Laggards were concentrated in consumer names, with WH
Group down 9.98% and Sunny Optical off 6.91%.
2️⃣ Mainland AI Rally Reverses on Profit-Taking
China-specific AI catalysts —
ChangXin Memory Technologies' upcoming IPO and reports of proprietary domestic
AI chips — lifted technology sentiment early in the week, but mainland
semiconductor stocks reversed sharply on Friday amid reported profit-taking.
The pullback dragged the CSI 300 and Shanghai Composite into weekly losses
despite the narrow tech rally.
3️⃣ Inflation Split: Firm Upstream, Soft Consumer
June CPI rose 1.0% year over
year, slightly below consensus and slowing from May's 1.2%, with core inflation
edging down to 1.0% on soft food and travel-related prices. Producer prices
jumped 4.1% — the fastest pace since July 2022 — on stronger nonferrous metals,
petroleum and coal, underscoring the upstream-versus-consumer divide.
4️⃣ PBOC Stays Supportive but Targeted
The PBOC's second-quarter
Monetary Policy Committee pledged an appropriately accommodative stance,
reasonably ample liquidity and stronger support for domestic demand, technology
innovation and SMEs, alongside lower overall financing costs. It acknowledged
insufficient domestic demand and structural imbalances, but stopped short of
signalling any broad-based stimulus programme.
5️⃣ Rotation Into Value: Healthcare, Property and Energy
Maybank KE flags fund rotation
out of crowded technology into value segments: within healthcare, Jiangsu
Hengrui is favoured on China's preliminary NRDL boosting reimbursement
coverage; Link REIT is the preferred Hong Kong property name on stabilising rental
reversions; and CNOOC screens as a compelling value play on higher crude, low
costs and attractive shareholder returns.
Technical Snapshot
The HSI's 3.53% surge carried it
back above the 24,000 mark to close at 24,175, though the index remains down
5.68% year to date. The Shanghai Composite slipped back below the 4,000 level
after Friday's semiconductor sell-off, ending at 3,996. Near-term direction
hinges on the upcoming Q2 GDP release, with 24,000 now the first support for
the HSI and 4,000 the pivot for the SSE.
π Weekly charts:
(Refer to the Hang Seng Index
constituents' weekly performance table below.)
πΈπ¬
Singapore
Market Overview
The Straits Times Index (STI)
surged 4.29% to close at a record 5,469.29, its strongest week of the year,
extending year-to-date gains to 17.72%. The rally was overwhelmingly bank-led,
with strong institutional inflows pushing all three local lenders to fresh
peaks — DBS crossed the S$70 mark for the first time — as investors positioned
ahead of the second-quarter results season and first-half dividend payouts.
(Refer to the major indices' weekly performance tables above.)
Index Weekly Performance
- Straits Times Index (STI): +4.29%
Key Highlights and Outlook
1️⃣ Banks Power the STI to Fresh Records
UOB soared 10.29%, OCBC gained
8.38% and DBS added 5.53%, together doing the heavy lifting in the index's
225-point weekly advance. DBS topped S$70 for the first time while OCBC and UOB
also hit new highs, driven by institutional inflows ahead of the banks' Q2
reporting season in early August.
2️⃣ Broad Blue-Chip Participation Beyond the Banks
Gains extended well beyond
financials: Keppel rose 5.71%, Wilmar advanced 3.49%, CapitaLand Investment
added 2.01% and SIA gained 1.18%. Most REITs eked out modest gains, keeping
breadth respectable even as the banks dominated headline performance.
3️⃣ Sembcorp and Singtel Lag the Rally
Sembcorp Industries fell 5.02%,
the index's worst performer, while Singtel slipped 1.57% and Venture eased
0.70%. JMH declined 1.13%, leaving the losers' column short and concentrated —
a sign of how one-sided the week's flows into the financial heavyweights were.
4️⃣ Q2 GDP Advance Estimate Due 14 July
MTI releases advance
second-quarter GDP estimates on Tuesday, 14 July, the next key checkpoint for
the market after Q1's 6.0% year-on-year expansion. The official 2026 growth
forecast stands at 2.0–4.0%, though authorities have flagged significantly elevated
downside risks from the external environment.
Technical Snapshot
The STI's 4.29% surge to
5,469.29 marks a decisive breakout above its early-July record highs, with the
5,400 level now turning into first support. Momentum is strong but stretched
after a 225-point weekly gain, leaving room for consolidation. The path of
least resistance stays higher into the GDP release, provided the banks hold
their newly established highs.
π Weekly charts:
(Refer to the STI weekly
performance table below.)
π
Week Ahead
(13–17 July 2026)
In the U.S., second-quarter
earnings season unofficially kicks off with the banks on 14 July, followed by
industrials and mega-cap technology later in the month. Inflation data and the
June retail sales report are also due, making it the most consequential macro
week of the month. With estimates already revised higher, results that merely
meet expectations may not be enough to extend the rally.
In China, attention turns to
second-quarter GDP and June activity data for a broader assessment of growth
momentum after the mixed inflation readings. Investors will also watch whether
Friday's sharp reversal in mainland semiconductor stocks extends, given the
increasingly divergent performance within the technology sector.
In Singapore, MTI releases
advance Q2 GDP estimates on Tuesday morning, with the MAS July policy review
also in focus — economists broadly expect monetary policy to be left unchanged.
Bank-share momentum will be the key market barometer following the record-setting
week.
π️ Overarching Watchpoint
The collision of U.S. earnings
season kickoff with inflation data is the week's biggest binary risk. With
S&P 500 earnings expected to grow 23% and yields already rising on higher
oil, a hot inflation print or bank results that merely meet elevated expectations
could unwind the market's AI-driven momentum — while upside surprises would
validate the second-half broadening thesis.
Source:
Some content and data are excerpted from publicly available market reports.
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