General Market News

Singapore reported April inflation at 1.8%, below the 2% economist forecast, with core inflation at 1.4%. The country also revised its first-quarter GDP growth sharply higher to 6% from an initial estimate of 4.6%, surpassing expectations of 5.1%. The ministry maintains its full-year 2026 growth forecast of 2%-4% amid energy-related disruptions in the Strait of Hormuz.

• Q1 GDP growth revised significantly upward to 6%, beating both the advanced estimate of 4.6% and Reuters consensus of 5.1%
• Lower-than-expected inflation attributed to timing, as higher energy costs from Iran war expected to materially impact only from Q3 onward
• MAS tightened monetary policy in April for the first time in over three years by adjusting the Singapore dollar policy band, rather than using interest rates like most nations

China's coking coal futures surged nearly 8% to daily limits after a gas explosion at a Shanxi province coal mine killed 82 people on May 23, 2026, marking China's deadliest mining accident since 2009. The disaster triggered stringent safety inspections across the major coal production region, tightening supply expectations and driving prices higher.

• The most active coking coal contract on the Dalian Commodity Exchange jumped 7.97% to 1,266.5 yuan ($186.76) per metric ton
• The accident occurred at Liushenyu coal mine in Shanxi province, a major coal production hub, with 82 fatalities from the gas explosion
• Authorities launched widespread safety checks across the region following the disaster, creating supply concerns that propelled prices to their daily trading limits

The University of Michigan consumer sentiment index fell to a record low of 44.8 in May 2026, while the S&P 500 gained 9% year-to-date and the Nasdaq-100 climbed 17%, creating an unprecedented disconnect between equity markets at record highs and consumer confidence at 1970s-era lows. This divergence, combined with one-year inflation expectations jumping to 4.8% (highest since the early 1980s), signals that either confidence must improve or markets must correct.

• Consumer sentiment hit an all-time low of 44.8, breaking below the previous 2022 record of 50.2 and the 60-point recessionary threshold, with both current conditions (45.8) and expectations (44.1) indexes at record lows
• The 10-year Treasury yield spiked to 4.67% (98th percentile), while the VIX compressed to 16.76, showing bond markets pricing in stress even as equity options markets signal calm
• Retail sales remain strong at $757.1 billion in April, but the savings rate dropped from 5.2% to 4% as consumers continue spending despite pessimism, creating a K-shaped economy where lower-tier balance sheets are thinning

U.S. markets face a critical week ahead as investors await Thursday's Core PCE inflation data and GDP revisions, while multiple Federal Reserve speakers could shape rate expectations. Major tech earnings from Salesforce, Dell, Snowflake, and consumer reports from Dollar Tree will test market momentum, with all major indices trading near record highs despite rising Treasury yields.

• Core PCE (forecast 0.3% m/m) and preliminary GDP data (forecast 2.1% q/q) release Thursday alongside a busy slate of Fed speakers including Williams, Logan, and Goolsbee
• S&P 500 rose 0.88% to 7,473.47, Nasdaq gained 0.45% to 26,343.97, and Dow surged 2.13% to 50,579.71, all trading above 52-week moving averages
• Key earnings include Salesforce, Snowflake, Marvell, and Dell for AI demand signals, plus Dollar Tree, Kohl's, and Dick's Sporting Goods for consumer spending health

A shortened trading week brings earnings reports from major retailers including Dollar Tree, Burlington Stores, Gap, and American Eagle Outfitters, which will provide insights into consumer spending amid high gas prices, inflation, and a stalled job market. AI-focused companies Dell Technologies, Synopsys, and Marvell Technology will also report results, offering updates on AI demand trends. The S&P 500 closed its eighth consecutive week of gains as investors monitor economic indicators and the Consumer Confidence Index due Tuesday.

• Retail earnings follow mixed signals from mass retailers last week, with Walmart lowering quarterly guidance while Target beat estimates, though both stocks fell, while apparel companies VF Corp, Amer Sports, and Foot Locker impressed investors
• Key AI sector reports from Dell Technologies, Marvell Technology, and Synopsys will indicate whether strong demand continues, with Dell executives previously calling the AI opportunity 'transforming' for the company
• The Conference Board's Consumer Confidence Index update on Tuesday will provide fresh data on consumer sentiment, which remains relatively pessimistic despite Americans continuing to spend on discretionary items

The Dow Jones Industrial Average closed at a record high of 50,579.70 on May 24, 2026, rising 294 points (0.58%) and gaining 2.1% for the week. The rally was driven by progress on Iran peace talks that pushed oil prices lower, strong earnings from multiple Dow components including Merck, Salesforce, and Cisco, and the swearing-in of Kevin Warsh as new Federal Reserve Chair.

• Iran peace deal progress reduced oil prices and inflation fears, triggering broad market rotation into airlines, shipping, and manufacturing stocks across all 30 Dow components
• Merck jumped over 5% on positive lung cancer drug trial results, while Salesforce and Cisco gained on strong earnings related to AI demand, showing unusual breadth across health care, tech, and industrial sectors
• New Fed Chair Kevin Warsh signaled a data-driven, cautious approach on inflation with possible rate cuts later in 2026, though upcoming PCE data will test whether the market's rate cut expectations hold

President Trump abruptly reversed an executive order that would have called for voluntary government safety reviews of new AI models before release, following direct lobbying from tech billionaires including Elon Musk, Mark Zuckerberg, and David Sacks. The decision, justified by Trump as necessary to maintain U.S. dominance over China in AI development, represents a major victory for the tech industry's anti-regulation stance and signals continued unchecked advancement of AI technology despite security and safety concerns.

• The proposed executive order was prompted by Anthropic's Mythos AI model, which has advanced cybersecurity attack capabilities that sparked a 'small geopolitical crisis' with governments worldwide worried about threats to critical infrastructure
• Tech leaders including Musk, Zuckerberg, and Sacks personally called Trump to kill the order, warning it would hurt U.S. economic advantage; the order would have been entirely voluntary with no legal force to mandate reviews
• Silicon Valley has donated hundreds of millions to Republican causes, with super PACs like Abundance Now amassing over $125m to push anti-regulation candidates as tech companies pivot business models entirely toward AI

Chinese AI startup DeepSeek announced it will permanently maintain a 75% price reduction on its flagship V4-Pro AI model, keeping prices at one quarter of their original level. The move represents a significant long-term pricing strategy shift for the company in the competitive AI market.

• The price cut is now permanent rather than temporary, signaling DeepSeek's aggressive pricing strategy in the AI market
• The V4-Pro model will be priced at 25% of its original cost going forward
• The decision could intensify price competition among AI model providers globally

Americans face significantly higher costs across multiple categories heading into Memorial Day weekend 2026, with inflation rising 3.8% annually in April, the highest rate since 2023. The increases are driven largely by elevated oil prices from the Middle East conflict, now nearly three months old, affecting fuel, food, and travel expenses. Consumer sentiment hit record lows in May as companies like Dollar Tree and McDonald's cite struggling customers amid the inflationary pressures.

• Food prices for summer barbecues surged dramatically, with ground beef and steaks up as much as 16%, hot dogs up nearly 11%, and frozen desserts rising over 18% compared to 2025.
• Transportation costs jumped sharply with gasoline prices up more than 28% year-over-year and airline fares climbing 20.7%, reaching their highest levels since 2022 due to Iran's closure of the Strait of Hormuz impacting oil supplies.
• A record 45 million Americans are expected to travel at least 50 miles from home over the holiday weekend despite the higher costs, with recreation expenses also rising including 5.5% increases for entertainment tickets and 6% for indoor plants.

A higher-than-expected Core PCE inflation report due May 28, 2026 could trigger a major market selloff by pushing Treasury yields higher and reviving rate hike odds for January 2027. The reading follows three consecutive hot inflation prints (CPI at 3.8%, PPI at 6%) and comes as Kevin Warsh replaces Jerome Powell as Fed Chair, signaling a tougher inflation stance. Tech stocks, particularly AI names like Nvidia, face acute vulnerability from rising yields compressing valuations and increasing financing costs.

• A hot Core PCE could push the 2-year Treasury yield above 5% and the 10-year toward 4.8-5%, with futures markets already pricing 50% odds of a January 2027 rate hike under new Fed Chair Kevin Warsh.
• AI and tech stocks face triple pressure: higher discount rates reducing present value of future earnings, a stronger dollar hurting overseas revenues, and increased debt refinancing costs for companies that borrowed at near-zero rates.
• Gold and silver remain vulnerable despite inflation concerns, as elevated yields (4.5-5% in bonds) make non-yielding assets less attractive, while silver faces additional downside from weakening industrial demand if growth slows.

The SEC has delayed a proposal that would allow U.S. crypto firms to trade tokenized assets linked to stocks, postponing the planned rollout this week to gather more input from stock-exchange officials and market participants. The 'innovation exemption' would have permitted platforms to offer tokens representing equity securities, with investors receiving the same rights as regular shareholders.

• SEC Chair Hester Peirce indicated the exemption would be 'limited in scope' and facilitate trading only of digital representations of underlying equity securities already available in secondary markets
• The proposal includes controversial 'third-party tokens' that could be issued without backing or consent from the public companies involved, which sources say would not receive full SEC support
• Crypto exchange stocks declined on the news, with Coinbase falling 4.4% Friday and extending its 2026 loss to 18%, while other platforms like Bullish and Gemini also slid over 2%

The University of Michigan's Index of Consumer Sentiment fell to 44.8 in May 2026, a five-point drop from April's 49.8 and a new record low in the index's 73-year history. The decline was driven by rising gas prices from supply disruptions in the Strait of Hormuz due to the Iran conflict, with consumers increasingly worried about sustained inflation spreading beyond fuel.

• Consumer sentiment has fallen for three consecutive months, with 57% of consumers citing high prices as eroding their finances, up from 50% in April
• Year-ahead inflation expectations rose to 4.8% from 4.7% in April (3.4% in February before the Iran conflict), while long-run expectations jumped to 3.9% from 3.5%
• Low-income consumers and those without college degrees were hit hardest, while sentiment among independents and Republicans reached the lowest levels of the current presidential administration

The Dow Jones Industrial Average hit a record high on Friday, closing up 0.59% at approximately 50,580, as easing Treasury yields and diplomatic progress in the Middle East boosted investor sentiment. The S&P 500 advanced 0.36%, marking its eighth consecutive weekly gain, while semiconductor stocks and strong corporate earnings provided additional support heading into the Memorial Day weekend.

• Treasury yields eased with the 10-year falling 3 basis points to 4.56% and the 30-year declining to 5.06%, reducing earlier inflation concerns driven by Middle East tensions
• Qualcomm surged nearly 12% on automotive and AI business momentum, helping the Philadelphia Semiconductor Index move higher and supporting broader tech gains
• Oil prices rose modestly with Brent crude up 0.9% to $103.54 and WTI up 0.3% to $96.60, remaining below weekly peaks as U.S.-Iran diplomatic efforts eased supply disruption fears

The Federal Reserve and FDIC approved the 'living wills' of the 8 largest U.S. banks and 56 foreign banking organizations, finding no shortcomings in their bankruptcy resolution plans. The regulators also confirmed that Bank of America, Goldman Sachs, JPMorgan Chase, and Citigroup have adequately addressed previous deficiencies related to derivatives portfolio unwinding that were identified in 2024.

• Living wills are required plans detailing how large banks could be safely unwound in bankruptcy without threatening financial stability
• Four major banks (Bank of America, Goldman Sachs, JPMorgan Chase, and Citigroup) successfully remedied earlier concerns about their derivatives portfolio resolution strategies
• The approval covers 8 of the nation's largest domestic banks and 56 foreign banking organizations operating in the U.S.

UBS has raised its year-end S&P 500 target to 7,900 from 7,500, citing strong corporate earnings growth and supportive monetary policy. The benchmark index is near 7,500 after eight consecutive weeks of gains, with first-quarter earnings growing at their fastest pace in four years despite risks from elevated oil prices and inflation.

• About 95% of S&P 500 companies have reported Q1 results, with earnings growing at the fastest rate in four years and companies beating estimates at an extraordinary rate, driving analysts to raise profit growth expectations at one of the fastest paces in decades
• Four semiconductor companies and the energy sector account for over half of the earnings estimate increases in the past three months, though median company growth expectations are still up 3.5% excluding the chip boom
• UBS expects the Fed to cut rates by 25 basis points in December and March (despite markets pricing 0% odds), and recommends diversifying away from mega-cap tech concentration toward international equities in Japan, Switzerland and emerging markets

The Dow Jones Industrial Average hit a record high on May 22, 2026, driven by Apple surpassing $4.5 trillion in market value and continued AI sector strength. The S&P 500 is on track for its eighth consecutive weekly gain, recovering from correction territory just two months ago. Market sentiment improved significantly on hopes of a U.S.-Iran conflict resolution following Qatari negotiators arriving in Tehran.

• Apple gained approximately 2% to cross $4.5 trillion in market capitalization, while Qualcomm surged 12% leading the semiconductor sector higher on AI infrastructure demand
• The market recovered from March correction territory when Iran conflict fears had pushed oil prices higher and triggered risk-off positioning
• Key risks remain despite the rally: elevated oil prices, high 10-Year Treasury yields pulling money from equities, and Fed policy uncertainty with leadership transition to Kevin Warsh

U.S. Trade Representative Jamieson Greer announced that next week's first formal USMCA renegotiation talks in Mexico City will prioritize strengthening regional content rules and economic security provisions to support U.S. manufacturing re-shoring. The initial negotiations will be bilateral between the U.S. and Mexico only, excluding Canada from the first round.

• Greer emphasized that regional content rules must ensure U.S. content in products receiving preferential trade treatment under USMCA
• The talks will be U.S.-Mexico bilateral discussions only, despite automakers' calls to maintain the six-year-old agreement as a trilateral deal
• Economic security provisions and rules of origin are the primary focus areas for updating the trade agreement

U.S. Trade Representative Jamieson Greer stated that no immediate tariffs on semiconductors are planned, but emphasized the importance of using duties strategically to support domestic chip production reshoring. Speaking at a Micron plant expansion in Virginia, Greer indicated tariffs from a pending Section 232 national security investigation need proper timing and sequencing to effectively promote U.S. manufacturing.

• No imminent semiconductor tariffs expected despite ongoing Section 232 national security investigation into the chip sector
• USTR emphasizes tariffs must be 'properly sequenced' with correct timing and amounts to facilitate semiconductor production reshoring
• Comments made at Micron Technology memory chip plant expansion project in the Washington, DC suburbs

The S&P 500 has rallied over 17% from March lows to record highs, driven by tariff optimism and semiconductor strength. With volatility compressed and the VIX in the high teens, financial analysts suggest now is an opportune time to purchase hedges at lower cost before potential pullbacks. The rally faces risks from elevated inflation, Fed inaction, and narrow market breadth.

• One-month, 30-delta put options now cost significantly less than during March volatility, with SPY June 26th $730 puts priced at approximately $7.40 or 1% of current levels
• Market breadth concerns emerge as the Russell 2000 has stalled near prior highs while cap-weighted indexes push higher, suggesting divergence in rally participation
• Fundamental risks remain unresolved including Fed sidelined by higher oil-driven inflation, elevated Treasury yields, and persistent safe-haven demand in gold despite recent retreat

Kevin Warsh, 56, was sworn in Friday as Federal Reserve chair, replacing Jerome Powell amid elevated inflation, market volatility, and concerns about central bank independence. President Trump emphasized Warsh should be 'totally independent,' though the transition comes as Trump has long demanded rate cuts while inflation remains above the Fed's 2% target.

• The Senate confirmed Warsh 55-45 on May 13, with only two Democrats supporting him; Powell will remain on the Fed board through January 2028 in a break from precedent
• Bond traders are betting Warsh may need to raise interest rates before year-end despite Trump's demands for cuts, as Fed Governor Waller warned of intensifying inflation pressures
• Warsh, a former Morgan Stanley banker and youngest Fed governor in modern history at age 35 in 2006, has criticized the Fed for keeping policy too loose and promised to shrink its balance sheet