SG Morning Brief | Tech Selloff Erases Records as Warsh Era Begins

Weekend Wrap

Kevin Warsh officially became Federal Reserve Chair on Saturday, inheriting an inflation rate of 3.8%, a 10-year yield at 4.55%, and rate hike odds at 45%. His first public comments will set the tone for markets this week. The Trump-Xi summit ended Friday without a major Iran breakthrough, disappointing investors who had hoped China would deliver a Hormuz reopening commitment. Oil remains above $100 and the 30-year yield is above 5%. Nvidia earnings on Wednesday are now the dominant catalyst.

US Overnight (Friday Close)

The S&P 500 fell 1.24% to 7,408.50, the Nasdaq dropped 1.54% to 26,225.14, and the Dow shed 537.29 points (-1.07%) to 49,526.17 — wiping out Thursday's record-setting rally in a single session. The 10-year Treasury yield spiked 9 basis points to 4.55%, its highest in a year, as traders priced in the risk that war-related inflation could force rate hikes. Crude oil rose about $3 to roughly $104, while gold fell approximately $125 to $4,553. Rate hike probability for 2026 climbed to 45% per CME FedWatch, up from 1% just a month ago. Empire State Manufacturing surged to 19.6 (vs 6.2 est), signaling no slowdown in the real economy. Dan Niles warned that oil is getting "uncomfortable," noting 10 of the last 12 recessions were preceded by an energy spike. For the week, all three indexes ended essentially flat: S&P +0.1%, Nasdaq -0.1%, Dow -0.2%.

Key Movers

Nvidia (NVDA) -4% — Nvidia fell 4.4%, the Dow's biggest decliner, reversing from Thursday's all-time high. The selloff was driven by profit-taking and rising yields rather than any fundamental catalyst. The stock remains up 15% in May ahead of Wednesday's earnings report. Goldman Sachs noted that the chip sector's 70% YTD rally has left it "priced for perfection."

Intel (INTC) -6% — Intel fell 6.18% to $108.77, extending its pullback from last week's record high of $124.92. The Apple foundry narrative is intact, but the stock was technically overbought and the broader chip complex rotated lower as yields surged.

Cerebras (CBRS) -10% — The AI chipmaker gave back 10% on its second day of trading, falling from Thursday's $311 close after its blockbuster 68% IPO pop. The volatility is expected for a newly public $70 billion company with limited revenue history.

SGX Preview

The STI's last confirmed close was 4,921.90 on May 8. DBS is near S$59.10. Friday's US tech selloff may pressure local tech-adjacent names like Venture Corp, but the banking trio should hold relatively well as higher-for-longer rates support net interest margins. The key risk for Singapore markets this week is oil: if the Hormuz situation deteriorates further and Brent pushes above $115, the inflationary headwind intensifies for Singapore's import-dependent economy.

Asia Pre-Market

S&P 500 futures are down 0.09%, Nasdaq futures down 0.09%, and Dow futures down 0.18%. VIX has risen 6.8% to 18.43 — the first meaningful volatility spike in weeks. Gold is at $4,545, Bitcoin at $77,758, and Brent crude at $110.47. The muted futures decline suggests markets are not panicking, but the VIX rise signals hedging activity ahead of Nvidia earnings and Warsh's first week.

This Week's US Earnings and Economic Calendar

Earnings Spotlight: Nvidia (May 20) — The most anticipated print of Q2. Consensus expects revenue around $70-78 billion (+~60% YoY). After AMD's blowout, Cisco's AI networking surge, and Cerebras's $70 billion IPO, the entire AI thesis converges on this report. The FOMC minutes from the April 29 meeting land the same day, adding rate policy context.

One More Thing

A month ago, the probability of a Fed rate hike in 2026 was 1%. Today it is 45%. The Iran war, $100+ oil, CPI at 3.8%, PPI at 6%, and 30-year yields above 5% have created an inflation backdrop that no amount of AI earnings can permanently ignore. Warsh inherits this on day one. He has called AI a "significant disinflationary force," giving him cover to resist hikes, but the bond market is daring him to act. Wednesday is the collision point: Nvidia earnings and FOMC minutes on the same day. If Nvidia delivers and the minutes are dovish, the selloff reverses. If either disappoints, the 70% chip rally faces its first real correction.

This briefing is for informational purposes only and does not constitute investment advice.