Stocks slip from highs as inflation fears return: Weekly Market Recap

AI is back in the spotlight.

These days, whenever I meet friends, the conversation somehow always turns to AI. “Are you using ChatGPT or Claude?” “Is it too late to buy AI stocks?”

I even saw a meme recently that it is almost impossible to have a conversation now without mentioning AI, Trump or oil prices.

Indeed, the AI rally has helped push US tech stocks to record highs, and each time the rally heats up again, it is tempting to feel like we are missing out.

But I also think this is a good time to pause and ask whether we investing in growth with clarity, or are we simply chasing what has already gone up?

That is why this week, we take a closer look at what is driving the interest in AI, and ask whether the AI rally has gone too far.

Closer to home, Singapore banks have also done well. DBS and OCBC are trading near all-time highs, while UOB has lagged behind. We compare the latest earnings of DBS, OCBC and UOB, and look at which bank appears most attractive now.

For income investors, we have also been getting questions on why Singapore REITs have remained weak. So we look at three Singapore blue chip REITs offering dividend yields of close to 6%.

And in our latest podcast, we speak to StarHub CEO Nikhil Eapen on how the company is sustaining its dividend payout despite tougher competition in the Singapore mobile market. 

This brings me back to our Beansprout Four Pots of Wealth framework. Instead of asking whether we should chase the AI rally, the better question may be which pot this opportunity belongs in. That way, we can stay open to exciting opportunities, while still investing with clarity.

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

📊 Inflation fears offset AI optimism

What happened? 

Markets had a choppy week as stronger inflation data and higher bond yields weighed on investor sentiment.

The US consumer price index rose 3.8% from a year ago, its sharpest increase since May 2023, with energy prices remaining a key driver of inflation.

This raised concerns that inflation could be becoming more broad-based, leading to a rise in global government bond yields. The US 10-year government bond yield climbed above 4.5%, while the US 30-year Treasury yield closed above 5.0% for the first time since 2007.

Learn more about what to expect for the upcoming 6-month Singapore T-bill auction on 21 May here.

What does this mean?

Higher inflation and bond yields offset some of the optimism around AI-related demand.

Technology earnings remained strong, supported by continued spending on AI infrastructure. Cisco rose 22% during the week after raising its revenue forecast and lifting its AI infrastructure order outlook to US$9.0 billion.

Why should I care?

The S&P 500 and Nasdaq Composite ended the week largely flat, after touching record highs earlier in the week.

In Asia, Hang Seng Index ended the week lower.  

In Singapore, the Straits Times Index (STI) ended the week higher, led by OCBC and DBS after their strong earnings reports. The banks were also supported by lower expectations of rate cuts, as higher interest rates may continue to support their margins.

🚗  Moving This Week

• OCBC is aiming to grow its consumer banking wealth business further. Sunny Quek, OCBC’s head of global consumer financial services, said the bank is looking to double the business again by 2029. This comes after OCBC doubled its consumer wealth business since Quek took on the role in 2022, ahead of its earlier target to double the business by 2030. Read more here
• Genting Singapore shares tumbled on Wednesday after the company reported weaker first-quarter earnings. Net profit fell to S$65.2 million from S$145 million a year earlier, while revenue slipped 3% to S$607.6 million due to lower gaming revenue. The stock closed 10.1% lower at S$0.62, making it the biggest decliner on the Straits Times Index. Read more here
• Singapore Airlines reported a 57.4% decline in FY2026 net profit to S$1.18 billion, despite achieving record revenue of S$20.5 billion. The drop in earnings was mainly due to the absence of a S$1.1 billion non-cash gain recognised previously from the Air India-Vistara merger. The group was also impacted by its share of Air India’s full-year losses, compared with only four months of losses recognised in the previous year. Read more here
• AIMS APAC REIT declared a distribution of 2.60 Singapore cents per unit for 4Q FY2026, bringing full-year FY2026 DPU to 9.85 Singapore cents — a 2.6% increase year-on-year. AIMS APAC REIT announced a new strategic portfolio positioning to expand into the data centre sector and is currently exploring entry options.  Read more here
• CSE Global reported a 29.1% rise in first-quarter revenue to S$265.2 million, driven by stronger demand from the data-centre industry. Revenue from its electrification segment surged 50.1% to S$146.3 million, supported by major data-centre contracts in the Americas. Its communications segment also recorded 18.5% revenue growth, helped by contributions from Australia, New Zealand and a recently acquired subsidiary. Read more here
• NetLink NBN Trust reported a 1.1% increase in second-half DPU to S$0.0271 for the period ended Mar 31. Revenue rose 2.1% to S$206.3 million, supported by higher contributions from ancillary projects, co-location and central office segments. The growth was mainly driven by more government project completions and the recovery of higher maintenance-related costs. Read more here
• Riverstone Holdings reported weaker earnings for the first quarter of 2026. Net profit fell 27.1% year on year to RM41.1 million, while revenue declined 15.1% to RM214.3 million. The glove manufacturer said its performance was affected by the stronger Malaysian ringgit against the US dollar, even though sales volumes remained stable across its cleanroom and healthcare segments. Read more here
• SIA Engineering Company reported stronger earnings for the second half ended Mar 31. Net profit rose 20.9% year on year to S$85.6 million, supported by a 3.7% increase in revenue to S$693.9 million. The aircraft maintenance provider also proposed a final dividend of S$0.085 per share, up from S$0.07 a year ago. The dividend will be paid on Aug 14, subject to shareholder approval at its AGM in July. Read more here
• SingPost reported weaker second-half results. Net profit fell 81.5% year on year to S$41.2 million, while revenue declined 18.2% to S$187.6 million. Separately, SingPost has decided to retain SingPost Centre, with CEO Mark Chong saying the flagship property is “not for sale”. Instead, the group plans to carry out enhancements to unlock more value from the asset, which remains an important part of its portfolio. Read more here
• UMS Integration shares jumped on Tuesday after the company reported stronger first-quarter earnings. Net profit rose 43% year on year to S$14 million, while revenue increased 20% to S$69.4 million. The stock climbed as much as 14.4% during the session before closing 10.2% higher at S$2.60, with more than 31 million shares traded. Read more here
• NTT DC REIT reported a second-half DPU of US$0.0387 for the period ended Mar 31, exceeding its IPO forecast by 2.4%. Revenue for the half year came in at US$115.3 million, 2.8% above forecast. The stronger performance was driven by higher colocation and power services revenue, as well as stronger leasing activity in its US portfolio. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

DBS and OCBC near all-time highs as UOB lags. Are bank dividends still attractive?

DBS and OCBC have climbed near all-time highs as UOB lags behind. We compare Singapore banks dividend yields to see if they still look attractive.

🤓 What we're looking out for next week

Key dates

• Monday, 18 May: Baidu earnings, NAHB Housing Market Index
• Tuesday, 19 May: NTT DC REIT, Yanlord ex-dividends, SIAS Corporate Connect: Sasseur REIT
• Wednesday, 20 May: Singtel earnings, Geo Energy ex-dividend, NVIDIA earnings, Analog Devices earnings, FOMC meeting minutes
• Thursday, 21 May: US Housing Starts, Continuing Jobless Claims, Walmart earnings
• Friday, 22 May: US Consumer Sentiment Index

Get the full list of stocks with upcoming dividends here. 

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