U.S. stocks fell sharply on Wednesday as escalating tensions between the U.S. and Iran increased market uncertainty. The Dow Jones Industrial Average dropped 953.33 points (-1.87%) to 49,918.78, the S&P 500 fell 1.62% to 7,266.99, and the Nasdaq Composite declined 1.98% to 25,169.50.

Oil prices surged, with WTI crude rising 2.07% to $90.03 per barrel and Brent crude gaining 1.8% to $93.10, following President Trump’s threats of further military action against Iran.

Technology and semiconductor stocks remained under pressure, with the SOXX Semiconductor ETF down more than 3% on the day, though it remains about 80% higher year-to-date.

Inflation data showed core CPI increased 0.2% in May, below the expected 0.3%, while annual core inflation was 2.9%. Overall inflation reached 4.2% year over year, its highest level in three years, driven largely by higher energy prices. Defensive stocks such as Coca-Cola and TJX reached record highs despite the broader market sell-off.

Fed and Inflation: President Donald Trump surprised markets by saying he was comfortable with 4.2% annual inflation, the highest level in three years. His comments may give new Federal Reserve Chair Kevin Warsh more flexibility to keep interest rates unchanged at his first policy meeting, despite Trump’s past criticism of former Fed Chair Jerome Powell for not cutting rates aggressively enough.

U.S.-Iran Escalation: The U.S. launched additional “self-defense” strikes against Iran after alleged Iranian attacks on U.S. ships and continued regional tensions. Trump warned that the U.S. would attack Iran “very hard” unless Tehran agreed to a deal, while Iranian officials responded with threats that any conflict could spread beyond the region, raising fears of a broader confrontation.

Oracle Earnings: Oracle Corporation reported stronger-than-expected fiscal fourth-quarter results, with adjusted EPS of $2.03 vs. $1.96 expected and revenue of $19.18 billion vs. $19.10 billion expected. Revenue grew 21% year over year, and net income increased to $4.22 billion from $3.43 billion a year earlier. Oracle maintained its $90 billion FY2027 revenue target and raised its earnings forecast to $8.05 per share, but the stock fell 7% after hours as investors reacted to plans for additional fundraising to support its AI expansion.

TSMC’s monthly sales up 30% on sustained AI chip demand

The proposed SpaceX IPO is financially unattractive despite enormous investor enthusiasm. Critics point to its US$1.75 trillion valuation, US$135 share price, US$4.9 billion loss in 2025, and an additional US$4.3 billion loss in Q1 2026, much of which is attributed to AI-related spending through xAI rather than its profitable Starlink business. Highlights of governance concerns, noting that Elon Musk would retain about 85% voting control while limiting shareholder rights through mandatory arbitration provisions.

Despite these concerns, demand has been overwhelming, with investors reportedly placing over US$250 billion in orders for a US$75 billion offering. The fear of missing out (FOMO), belief in Musk’s vision, AI optimism, and the prospect of owning part of future technologies are outweighing concerns about valuation and profitability.

The mega-IPOs such as SpaceX, OpenAI, and Anthropic could divert capital away from smaller profitable companies as index funds and institutional investors are forced to buy these giants. However, the piece concludes that Singapore can learn from the phenomenon: if it wants to become a hub for high-growth technology companies, investors must become more comfortable with volatility, aggressive spending, and long-term growth stories rather than focusing solely on dividends and stable returns.

Unitholders of CapitaLand Integrated Commercial Trust (CICT) closely scrutinized its proposed S$3.9 billion acquisition of Paragon, questioning the timing, long-term strategy, and concentration risk. Investors, including former CapitaLand executive Ng Ee Peng, argued that such a large purchase should involve future value-creation plans, potentially including redevelopment of the freehold Orchard Road asset.

CICT management acknowledged Paragon’s long-term potential but said it was too early to disclose specific plans. The trust noted that consumer preferences are shifting toward dining, entertainment, and experiential retail, and any asset enhancement strategy would require further study.

Management defended the timing of the acquisition, explaining that it should be viewed together with the proposed S$2.48 billion sale of Asia Square Tower 2. They argued there is “no perfect time” for property transactions and that simply using sale proceeds to reduce debt would dilute earnings.

On concerns about future spending, CICT said it does not expect major capital expenditure beyond normal maintenance in the next few years, although some improvements may be made.

Investors also raised concerns about increasing exposure to Orchard Road and the Downtown Core. After the acquisition, Orchard Road assets will represent 33% of CICT’s retail portfolio (up from 26%), while downtown exposure rises to 64% (from 60%). Management maintained that the portfolio remains diversified and said it remains interested in suburban retail opportunities.

Despite the concerns, the acquisition received overwhelming support, with 99.96% of votes in favor and only 0.04% against.

Singapore’s technology sector is gaining influence in the iEdge Singapore Next 50 Index and could eventually overtake S-REITs as its dominant component if current momentum continues. The shift reflects growing investor interest in growth-oriented, globally exposed tech companies rather than traditional income-focused sectors.

In the latest index review effective June 22, four companies were added: AEM Holdings, Top Glove Corporation, UI Boustead REIT, and PC Partner Group. They replaced Singapore Post, Digital Core REIT, Wee Hur Holdings, and China Sunsine Chemical Holdings.

Technology stocks have benefited most from the liquidity-weighted methodology. Tech now accounts for 26.2% of the liquidity-weighted index versus 15.8% in the standard version, while S-REIT exposure falls to 29.7% from 35.9%. Five of the seven largest index constituents are technology companies.

Trading activity has surged, particularly for AEM, whose average daily trading value jumped from S$4.05 million to S$34.7 million, while PC Partner’s trading value increased 35-fold.

The broader trend suggests Singapore’s mid-cap market is becoming more growth-oriented, with technology increasingly displacing defensive sectors such as REITs, telecommunications, and utilities. Overall liquidity has also improved significantly, with average daily trading value across the index rising from S$121 million in 2025 to S$298 million in 2026.

Hong Kong markets ended lower, with the Hang Seng Index (HSI) falling 157 points (-0.64%) to 24,407, marking a sixth consecutive day of losses. Turnover was strong at HKD 320.6 billion. The Hang Seng Tech Index dropped 0.94%, while the HS China Enterprises Index slipped 0.07%, showing broad but uneven weakness.

Financial stocks were under pressure after concerns over tighter mainland China capital controls. Major banks and insurers declined, including HSBC (-4.79%), BOC Hong Kong (-3.38%), and Standard Chartered (-4.83%), while AIA fell more modestly by 1.06%.

Technology stocks showed mixed performance. Tencent rose 2.74%, supported by optimism around WeChat’s AI ecosystem integration, while Meituan gained 2.33%. However, Alibaba fell 2.22%, though NetEase and Kuaishou both climbed 3.79%, outperforming the broader market.

Telecom stocks outperformed on expectations of a potential RMB 2 trillion data center investment plan in China, with brising 3.59%, China Telecom up 3.05%, and China Mobile edging up 0.18%.

Among blue chips, Lenovo plunged 9.38%, becoming the worst performer amid speculation of price increases. In contrast, Geely Auto surged about 4%, while BYD fell more than 2%, highlighting divergence within the automotive sector.

Maybank (Malayan Banking Berhad): Clarified that its Indonesian unit is not under investigation. Staff members were only questioned as witnesses regarding transactions linked to certain corporate customers, and the bank is cooperating with authorities.

Gamuda (Gamuda Berhad): Plans to acquire a stake in the 450MW Hazelwood North Solar Farm and Battery Energy Storage System in Victoria, Australia. Construction is targeted for 2028, with operations expected in 2030, pending approvals and a final investment decision. Financial details were not disclosed.

Scientex (Scientex Berhad): Reported a 14.8% increase in 3QFY2026 net profit to RM142.17 million, while revenue rose 0.7% to RM1.12 billion. The company is strengthening cost controls, customer engagement, and efficiency measures to manage geopolitical, energy, and supply-chain challenges.

Ann Joo Resources (Ann Joo Resources Berhad): Its joint venture sold a 62-acre industrial land parcel in Gurun, Kedah for RM119.6 million. Ann Joo expects RM69.2 million in proceeds. This is the second land disposal by the JV within three months.

Rohas Tecnic (Rohas Tecnic Berhad): Through subsidiary HG Power Transmission, secured a RM42.4 million contract from Tenaga Nasional Berhad for fibre-optic supply and services on high-voltage infrastructure. It is the group’s second TNB contract in two days.

ISF Group (ISF Group Berhad): Won a RM14.54 million subcontract for internal sewerage works at a hyperscale data centre project through its subsidiary Yeo Plumber Sdn Bhd.

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