Last week's recap: Inflation pressure mounts while Trump meets Xi in Beijing

China inflation turns a corner: China's consumer price index (CPI) rose 1.2% year-on-year (YoY) in April, beating the 0.9% consensus, lifted by energy prices and holiday travel spending. The producer price index (PPI) surged 2.8% YoY — the fastest since July 2022 and well above the 1.5% forecast — driven by Middle East supply disruptions and Beijing's capacity-reduction drive.

US inflation highest since May 2023: US annual inflation accelerated to 3.8% in April (March: 3.3%), with energy costs jumping 17.9% YoY and accounting for over 40% of the monthly increase. Core CPI rose 0.4% month-on-month (MoM) and 2.8% YoY, keeping prices well above the Federal Reserve's (Fed) 2% target.

US Treasury yields extend climb: Surging oil prices, persistent inflation and a run of soft Treasury auctions pushed the 30-year yield to 5.13% — its highest closing level since June 2007 — while the 10-year yield rose to 4.60%. Markets now price a 50% probability of a Fed rate hike this year, underpinning a 1.5% weekly dollar gain — its strongest in two months.

Trump-Xi summit: trade and Taiwan: The leaders pledged to enhance economic cooperation at the Beijing summit, but China agreed to purchase Boeing jets well below pre-trip expectations. There were also few concrete outcomes beyond a broad commitment to stabilise relations, while Xi warned that mishandling Taiwan could lead to conflict. The yuan briefly touched a three-year high before retreating to around 6.81 per dollar.

Markets in focus: Nasdaq 100 snaps seven-week streak, HSI retreats below 26,000 and sterling hits six-week low

Nasdaq 100 snaps seven-week winning streak as AI hardware names retreat

US equity markets showed signs of fatigue last week, with the S&P 500 eking out a marginal 0.1% gain, the Dow declining 0.2%, and the Nasdaq 100 slipping 0.4% — its first weekly decline in seven weeks. The broader macro backdrop weighed heavily: WTI crude oil surged 10.5% to close above $105 per barrel as the Iran conflict showed no signs of resolution, global government bonds yields spiked on mounting inflation concerns, and the Trump-Xi summit yielded no concrete commitments on trade or geopolitical flashpoints.

At the stock level, profit-taking hit several AI-related hardware names. Intel fell 12.9% after a UBS report confirmed the company is losing server market share to AMD and ARM, compounding the reversal from its extraordinary 260% year-to-date run. Super Micro Computer dropped 12.2% as ongoing legal proceedings related to alleged Nvidia chip smuggling to China continued to weigh on sentiment, while SanDisk declined 9.9% in line with the broader semiconductor selloff.

Cisco was the standout gainer, surging 22.4% after posting a record quarterly result. Revenue rose 12% YoY to $15.8 billion, beating expectations, while year-to-date AI infrastructure orders from hyperscalers reached $5.3 billion — already above its prior full-year target — prompting management to raise its FY2026 AI order guidance to $9 billion.

Following an impressive rally of close to 30% since 31 March, the US Tech 100 index pulled back on Friday, providing a healthy reset as the index targets the 30,000 level. The medium-term bullish trend remains intact as long as the index holds above 26,200. Immediate support lies near 28,200, where the 20-day moving average (MA) resides.