US stocks fall as AI sell-off intensifies: Weekly Market Recap

The haze has been pretty hard to ignore in Singapore this week.

I found myself checking the PSI more often, and thinking twice about whether to head outdoors. It was a simple reminder that when conditions change, it helps to have better visibility before deciding what to do.

I think the same applies to investing. There has been quite a lot to take in lately, with bond yields staying elevated, inflation still a concern and markets turning more volatile. 

That is why we introduced the Beansprout Investment Climate this week, to help us focus on the signals that matter most, and more importantly, what they mean for each of our Four Pots.

For the Liquidity Pot, higher interest rates are creating more opportunities to earn a better return on our cash. The latest 1 year T bill yield jumped to 1.92%, while we are watching whether the upcoming 6 month T bill yield can stay near 1.9%. I would continue comparing these options while making sure I have enough cash available for upcoming needs.

For the Growth Pot, I would continue investing regularly in diversified investments rather than trying to time every market move. The launch of UCITS ETFs on SGX has also given investors more ways to invest globally. We looked at how one of these new ETFs compares with CSPX, a popular S&P 500 ETF, for those building their Growth Pot with US stocks.

For the Income Pot, higher yields are making selected income options, including bonds and REITs, more interesting. We also looked at four Singapore REITs yielding up to 7% with exposure to the office market for those looking to generate dividend income.

For the Opportunity Pot, Singapore bank stocks have seen sharp swings recently. In our latest podcast interview, we discussed what the charts are signalling for DBS, OCBC and UOB. 

Singapore’s advanced manufacturing sector is being shaped by structural trends such as semiconductor demand and the aerospace recovery. Join us in our upcoming webinar on 20 October, as we explore which companies are exposed to these themes and what investors should watch for. 

And coming back to the haze, perhaps there is another reminder for me this week. There will always be things outside our control, whether it is the markets or the air outside.  We can pay attention to the conditions, make sensible adjustments, and then focus on taking care of ourselves and the people around us.

So if you are staying indoors a little more this weekend, I hope you get some time to rest too.

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

📊 US stocks fall as AI sell-off intensifies

What happened? 

US inflation came in hotter than expected.

September headline CPI rose 3.7% year on year. Producer price inflation was also stronger than expected, with the PPI rising 6.3% year on year. Core PPI rose 0.7% month on month, pointing to broad based price pressures.

What does this mean?

Sticky inflation added to concerns about the outlook for interest rates, while questions around returns from AI investments also resurfaced.

Broadcom CEO Hock Tan warned that many companies are still struggling to generate meaningful returns from their AI investments, despite adopting the technology. Intel CEO Lip Bu Tan also highlighted growing investor pressure for companies to demonstrate measurable returns.

Why should I care?

US equities came under pressure. The Nasdaq Composite fell 4.5%, its worst weekly performance since June, while the S&P 500 declined 2.0%.

The sell off was particularly sharp among semiconductor and AI infrastructure stocks, with the semiconductor index falling 11.4%, as investors rotated towards more defensive sectors.

US Treasury yields remained elevated, even as the 10 year Treasury yield eased slightly to 5.08%, from 5.24% at the end of the previous week.

Closer to home, the Straits Times Index gained 0.3% this week as Singapore bank shares stabilised.

🚗  Moving This Week

• DBS CEO Tan Su Shan said investors are demanding higher returns and tighter financing structures as markets reassess risks surrounding artificial intelligence (AI) investments. Speaking to Bloomberg on Monday (12 October), Tan described the shift as healthy, helping ensure AI spending generates sustainable returns, although weaker companies could face credit rating downgrades. Read more here
• Parkway Life REIT is acquiring three nursing homes near Marseille, France, for €38.8 million (S$56.5 million), with 12-year leases to operator DomusVi. The debt-funded acquisition will increase its French portfolio to 14 properties worth S$234.3 million, while raising aggregate leverage from 33.8% to 35.3%. Total acquisition costs are estimated at €43.4 million. Read more here 
• AIMS APAC REIT reported a 4.0% year-on-year increase in 1H FY2027 DPU to 4.908 cents, while distributions rose 4.9% to S$40.5 million. Net property income grew 11.1% to S$75.9 million, supported by acquisitions, asset enhancements and lower property expenses. Portfolio occupancy stood at 93.7% with positive rental reversions of 5.7%, while 2Q DPU rose 10% from the previous quarter. Read more here 
• Hongkong Land is reportedly in early-stage talks to acquire a majority stake in three Orchard Road properties owned by Hotel Properties Limited (HPL), potentially valuing the assets at over S$2 billion. The properties include voco Orchard, Forum shopping mall and HPL House. HPL said no decision has been made, while its shares rose 7.4% on Wednesday, 14 October. Read more here 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

Will rising bond yields hurt stocks? What 5 indicators tell us: Beansprout Investment Climate Oct 2026

Will rising bond yields hurt stocks? We assess five key indicators, including inflation, economic growth and valuations, to understand the investment outlook.

🤓 What we're looking out for next week

Key dates

• Monday, 19 Oct:  Lion-OCBC Securities Singapore Low Carbon ETF, Lion-OCBC Securities APAC Financials Dividend Plus ETF ex-dividends.
• Tuesday, 20 Oct: Netflix earnings, Beansprout webinar: Investing in the advanced manufacturing sector: Powering growth from AI to aerospace
• Wednesday, 21 Oct:  OUE REIT, IBM, Lam Research, Meta, Tesla earnings
• Thursday, 22 Oct:  BRC Asia ex-dividend, Alpha Integrated REIT, Suntec REIT, Frasers Centrepoint Trust earnings, 6-month T-bill auction
• Friday, 23 Oct: Keppel Ltd, CapitaLand China Trust earnings, SG CPI (Sep)

Get the full list of stocks with upcoming earnings and upcoming dividends. 

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