Key takeaways
- Rising global bond yields and growing expectations of future Federal Reserve rate hikes are increasingly threatening the AI-driven technology rally, pressuring growth-stock valuations across global equity markets.
- Geopolitical tensions escalated sharply after a drone strike targeted a UAE nuclear facility, intensifying concerns over prolonged Middle East instability, elevated oil prices, and persistent inflationary pressures.
- Despite broader macro weakness, Asian technology stocks showed resilience as Baidu posted strong AI-driven earnings growth and Samsung Electronics gained ahead of highly anticipated NVIDIA earnings.
- Chart of the day: Nasdaq 100’s medium-term uptrend damaged, potential near-term weakness is likely to persist below 29,400 key short-term resistance.
Top macro headlines
- UAE nuclear plant targeted in severe escalation: Geopolitical tensions spiked as a drone strike caused a fire at a nuclear power plant in the United Arab Emirates. Simultaneously, Saudi Arabia reported intercepting three hostile drones. U.S. President Donald Trump warned that Iran must act “fast” before he backed down on fresh military strikes following appeals from Gulf allies.
- Fed rate hike talks build: Wall Street is actively positioning for a hawkish pivot. Fed funds futures are now pricing in a high probability of a 25 bps rate hike by late 2026 or January 2027, driven by persistent inflation linked to the Middle East energy shock.
- Global bond rout deepens: Long-term government bond yields are breaking out to major inflection levels globally. The buckling of global bonds is being driven by entrenched inflation fears as the Middle East conflict drags on.
- Baidu and Samsung defy broader market gloom: Asian tech showed resilience, with Baidu topping Q1 estimates with a 49% surge in core AI-driven revenue, while Samsung shares (+3.9% on Monday, 18 May) jumped as investors look ahead to Nvidia’s blockbuster earnings release.
- China retail sales growth weakens: China’s retail sales have expanded at their slowest pace since the COVID-19 pandemic, signaling severe domestic demand sluggishness that is capping broader regional equity gains.
Key macro themes
- US-Iran conflict extends as midterms loom: There are currently few signs that a resolution to the Iran war is coming soon. The clock is ticking not just for Iran, but also for President Trump, as financial markets react to the ongoing oil shock while the U.S. midterm elections approach.
- The shift to active tightening: With headline April inflation running hot, the narrative has shifted away from a simple “higher for longer” pause. Stagflation risks are forcing central banks and markets to consider renewed rate hikes to kill structural energy-driven inflation.
- Nvidia earnings as the ultimate market litmus test: Markets are now hyper-focused on Nvidia’s upcoming earnings this Wednesday, which carries astronomical expectations and raises systemic risks for a broader tech selloff if the results or guidance disappoint.
Global market impact (last 24 hours)
Equities: S&P 500 and Nasdaq 100 traded lower for the second consecutive session, weighed down by elevated government bond yields and prolonged anxiety over the Iran war. Despite the broader market pressure, Asian tech showed resilience as Samsung shares jumped and Baidu topped Q1 estimates. In today’s Asia opening session, the S&P 500 and Nasdaq 100 E-mini futures extended losses to around 0.2%.
Fixed Income: A global bond rout is deepening, leading to an impending yield major breakout that is actively pressuring the stock market. The U.S. 10-year Treasury yield zoomed past 4.50%, while Japan’s 10-year JGB yield hit a record high of 2.8%.
FX: The US Dollar Index (DXY) remains structurally dominant as rate hike expectations build, eroding alternative G10 gains and pressuring emerging market currencies.
Commodities: Oil prices jumped to a two-week high following the unexpected drone attack on the UAE nuclear power plant before slipping down in the closing hour of Monday’s US session to trade almost unchanged after Trump backed down on military strikes against Iran. Conversely, spot gold slipped to a 1.5-month low, falling 1.1% to around $4,480/oz before it staged a minor bounce to end the US session with 0.6% at $4,566/oz, below its 20-day and 50-day moving averages
Asia Pacific impact
- Tech resilience vs. macro gloom: While Baidu’s strong earnings and Samsung’s pre-Nvidia bounce may provide a tailwind for regional tech, broader indices like the Hang Seng and Nikkei are struggling under the weight of higher U.S. yields and China’s sluggish retail sales. Nikkei 225 is trading almost unchanged in today’s Asian opening session, while KOSPI sees profit-taking activities (-2.6% at this time of writing).
- Currency strains & import bans: The widening yield premium with the U.S. and the structural oil shock continue to deplete regional FX valuations. To protect the capital account, the Indian government has initiated emergency curbs on silver imports.
- Samsung labor talks: High-stakes negotiations between Samsung Electronics management and its labor union continue, with global memory supply chains hanging in the balance.
Top 3 economic data/events to watch today
- Japan Q1 GDP Preliminary Release – 7.50 am SGT Impact: USD/JPY, JPY crosses, Nikkei 225
- RBA Monetary Policy Meeting Minutes – 9.30 am SGT Impact: AUD/USD, AUD crosses, ASX 200
- CA Core Inflation Rate (Apr) – 8.30 am SGT (consensus: 2.6% y/y, Mar: 2.5% y/y) Impact: USD/CAD, CAD crosses.
Chart of the day – Nasdaq 100’s medium-term uptrend damaged
The medium-term uptrend of the high-flying US Nasdaq 100 CFD (a proxy of the Nasdaq 100 E-mini futures) has been damaged as price actions broke below the former ascending channel support from the 31 March 2025 low.
In addition, the hourly RSI momentum indicator continues to flash out bearish momentum conditions below the 50 level,
Watch the 29,400 key short-term pivotal resistance for a further potential side towards 28,660 near-term support. A break below it exposes the next intermediate support at 28,460/280 (also the 20-day moving average) (see Fig. 1).
On the flip side, a clearance and an hourly close above 29,400 negates the bearish tone for a squeeze up to re-test the current intraday all-time high of 29,704 in the first step.
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About the Author
Kelvin Wong
Senior Market Analyst
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
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