Week Ahead: Markets Watching U.S. PCE for Tariff Impact

Week Ahead: 26 May 2025

Traders and investors will be closely monitoring developments following President Trump’s escalation of trade tensions, including a proposed 50% tariff on EU goods and potential duties on iPhones. Meanwhile, upcoming U.S. PCE inflation data and the release of the Fed minutes are expected to be key market drivers in the week ahead.

Medium Term:

S&P 500 (SPX): The S&P 500 is currently testing the 5,780 support level. A rebound from this area could signal a resumption of the upward trend. However, if selling pressure persists, the next key support level is at 5,540.

Traders can consider tactical long entries near 5,780 with stop-loss below 5,750. Target a rebound toward 6,000 and 6,147 if momentum returns. If breached: Shift to short bias toward 5,540 support zone.

Investors to maintain core exposure but stay defensive. Accumulate selectively on confirmed rebound signals.

Hang Seng Index (HSI): Our China Market Long-Term Cycle Indicator continues to signal an upward trend for HK/China markets. The Hang Seng Index (HSI) recovery continues. Index is expected to trade sideways, with the possibility of testing support around the 22,750 level.

Alternatively, the index's uptrend could extend toward the 24,200 resistance level.

Traders to trade the range between 22,750–24,200. Initiate longs near 22,750 support with stops below 22,400. Consider breakout trades on sustained move above 24,200. While investors can continue to gradually increase exposure to HK/China equities on dips. Structural trend remains positive. Focus on quality names aligned with AI and domestic recovery.

Straits Times Index (STI): The outlook for the Straits Times Index (STI) remains unchanged. Our base case continues to anticipate a retest of the 4,000 zone. Alternatively, the index may consolidate within the 3,800–3,900 range.

Traders can use 3,800–3,900 range for tactical positioning. A confirmed breakout above 3,900 opens a move toward 4,000. Tighten stops below 3,770. And investors continues to hold existing positions, may add on strength above 3,900 or on dips near 3,800 with confirmation of trend resumption.

Long Term:

S&P 500 (SPX) Neutral Trend

Hang Seng Index (HSI) Upward Trend

Straits Times Index (STI) Uptrend Trend

Headlines Next Week:

US: FOMC minutes, Fed speakers, 1Q GDP (2nd), Apr PCE, income/spending, home sales

China: Apr ind prof, May mfg & non-mfg PMI

Singapore: Apr ind prod

Disclaimers Apply

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