Key Points

- STI closed Friday at 5,656.11 (-0.08%), with DBS at S$76.86 (-0.10%) and OCBC at S$31.38 (+0.32%).
- Local catalyst: the global rate repricing after the Fed and Bank of Japan hikes is the key swing factor for Singapore's bank-heavy benchmark.
- US Friday close: S&P 500 +0.17% to 7,650.50, Nasdaq +0.39% to 26,522.55, Dow -0.18% to 51,682.64.
- Oil eased to near US$99.53/bbl Friday; gold was around US$4,373/oz early Monday.
- This week: AutoZone (Tue), Costco (Thu post-mkt), then Friday's US durable goods and Michigan sentiment.

Singapore Open

The benchmark $Straits Times Index (STI.SG)$ ended Friday at 5,656.11, a 0.08% dip that leaves it about 62 points below its record close of 5,801.96 set on 4 September. The index has been consolidating as higher global rates and oil near US$100 dominate the tape. Among the big three banks, $DBS (D05.SG)$ slipped 0.10% to S$76.86, $OCBC (O39.SG)$ added 0.32% to S$31.38, and $UOB (U11.SG)$ eased 0.24% to S$41.78. The modest moves mask the real story: Singapore's lenders carry roughly half the STI weight, so how they read the Fed and BOJ tightening cycle will set the index's direction this week.

Elsewhere, $Singtel (Z74.SG)$ fell 1.58% to S$4.35 — a notable laggard — while $ST Engineering (S63.SG)$ rose 2.36% to S$10.43 and $Singapore Airlines (C6L.SG)$ closed flat at S$6.51. For SIA, the oil complex is the swing factor: Brent around US$108 and WTI near US$100 keep fuel costs elevated, which is why the counter has lost 6.6% over the past four weeks even with little change on Friday.

Singapore Macro

The domestic macro frame keeps improving, even as the external backdrop turns choppier. The MAS's September professional forecasters survey showed economists lifting the 2026 full-year GDP growth forecast to 5.0%, up from 3.5% in the prior round, while trimming core inflation expectations to about 1.9% and headline to 2.1%. Most respondents still see no immediate change to MAS policy, but expectations have shifted further toward tightening — a notable stance after MAS's July statement flagged energy prices as a core inflation risk.

The transmission to SGX is direct: if the Fed and BOJ keep hiking while MAS holds a firm SGD policy slope, local rate expectations stay elevated. That supports bank net interest margins but raises the financing-cost bar for REITs and capital-hungry growth names. Nearly two-thirds of surveyed economists also flagged a bursting AI bubble as a downside risk — a reminder that the electronics and data-centre-linked names that have carried the STI's gains are now a two-way bet.

Weekend Wrap

The big event was already in the books: the Fed delivered its first rate increase in more than three years at its 16 September meeting, lifting the target range by 25 basis points to 3.75%-4.00% under Chair Kevin Warsh. President Trump pushed back publicly, posting that rates should be 1% or less, while Minneapolis Fed President Neel Kashkari added that inflation pressures have broadened well beyond oil and warrant continued tightening. The Bank of Japan then raised its policy rate 25 basis points on Friday to 1.25%, the highest since 1995, completing a hawkish global sweep alongside the Fed and ECB.

The other notable item: Warren Buffett said on 19 September he will step down as Berkshire Hathaway chairman, moving to chairman emeritus while son Howard Buffett takes over the role. Markets treated it as orderly. This week, China's Vice Premier He Lifeng is due to lead a delegation for US trade talks, putting tariffs and the still-restricted oil complex back on the geopolitical radar.

US Overnight (Friday Close)

Wall Street ended Friday mixed. The S&P 500 rose 0.17% to 7,650.50, and the Nasdaq Composite added 0.39% to 26,522.55, while the Dow Jones Industrial Average fell 0.18% to 51,682.64. For the week, the Dow lost more than 1.5% — its worst since March — while the S&P 500 eked out a small loss and the Nasdaq finished modestly in the green. The 10-year Treasury yield climbed about 5 basis points Friday to hover near the 5% level, reflecting renewed bets the Fed could hike again in October.

Among single names, $Nvidia (NVDA.US)$ rose 1.34% to US$222.27, leading a chip-sector snap-back after an earlier AI-safety-driven selloff. Financials lagged: the $SPDR Financials (XLF.US)$ sector fund dropped more than 2% on the week. Separately, Bitcoin climbed about 5% back above US$80,000 after the SEC cleared a regulatory path for tokenized stocks.

Asia Pre-Market

US index futures were broadly steady in thin Asian trade on Monday, with the December S&P 500 contract holding near 7,703. WTI crude settled around US$99.53 a barrel Friday, down 2.34% on the day but still up nearly 18% over the past month. Gold opened slightly lower early Monday near US$4,373.75 an ounce, while Bitcoin traded around US$80,900. For SGX's open, the most important signal is oil's failure to break meaningfully lower: as long as crude holds near US$100, SIA and transport-facing costs stay pressured even as rate-sensitive banks find support.

This Week's US Earnings and Economic Calendar

It is a light data week after the Fed, with two events worth watching on Friday and a heavy run of Fed speakers in between. On the earnings side, the standout is Costco late Thursday.

Earnings Spotlight: $Costco (COST.US)$. The warehouse giant reports Q4 fiscal 2026 Thursday after the close, with consensus at about $6.55 in adjusted EPS on roughly $94.85 billion in revenue — both up around 10%-12% year over year. The watchpoint is margins: tariff refunds lifted past quarters, but fuel volumes and higher supply-chain costs have squeezed profitability even as membership income keeps growing. Friday's durable goods print and the final Michigan sentiment reading land the next morning, so Costco's consumer tone will hit a market already sensitive to inflation expectations.

One More Thing

Rather than reading this as a simple "rates up, banks up" moment, watch the gap between the 10-year yield and oil. If yields hold near 5% while crude stays near US$100, Singapore banks get a tailwind on net interest margin but SIA, REITs and consumer names stay under a cost cloud — which is exactly the split we saw Friday. If oil breaks lower instead, the whole setup rotates back toward the growth trade. The signal to track is the yield-oil pair, not either leg alone.

Sources: TradingEconomics; The Business Times; Reuters; Bank of Japan releases; University of Michigan Surveys of Consumers.

This briefing is compiled with AI assistance from market data and wire reports, and reviewed by the Longbridge editorial team before publication.

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