Investment Update :Markets Hit Record Highs — What’s Next as the Fed Meets Again
It’s been a strong year for Singapore equities. The Straits Times Index touched a fresh all-time high of 5,801 points on 4 Sept 2026 — a milestone worth celebrating, but also worth understanding, especially with the US Federal Reserve’s next rate decision due later this month.
Here’s a closer look at what’s been driving markets, what’s bubbling under the surface, and what it could mean for your portfolio as we head into the final stretch of the year.
A Record Run — Powered Mostly by Banks
The STI’s rally has been overwhelmingly a three-stock story. DBS, UOB and OCBC have carried the market to new highs, with DBS crossing $78, UOB trading above $42 and OCBC trading above $32.
Source: Yahoo Finance
Tip: A record index level doesn’t always mean broad-based strength. When gains are this concentrated, it’s worth checking whether your own portfolio is similarly over-exposed to a handful of counters.
Just How Concentrated?
Here’s the number that puts it in perspective: the three local banks now make up close to half the entire index’s weight. That means roughly half of “how the STI did this year” is really just “how three banks did this year.”
Cracks Beneath the Surface — Locally and Globally
Not every sector is riding the wave. Locally, Singapore Airlines has faced fuel cost pressures, and Singtel has dealt with fallout from the collapsed M1-Simba merger. Globally, the AI-driven tech rally has had its own bumpy patches — a stretch in late June saw the Nasdaq fall over 4.5% in a single week after reports that OpenAI could delay its IPO, alongside rising memory-chip costs squeezing hardware makers and, in turn, consumers. Micron surged on blowout earnings, then gave some of it back days later on profit-taking; Microsoft rebounded after a well-known investor disclosed a new stake; SoftBank fell sharply in Tokyo on the same OpenAI IPO concerns.
Tip: Diversification across sectors and geographies matters as much in a bull run as it does in a downturn — a single bad headline can move an entire theme in days.
All Eyes on the Fed
The Federal Reserve held its benchmark rate steady at its July meeting, and markets are now watching closely ahead of the next FOMC decision on 16 September. A cut would likely support bond prices, ease refinancing costs, and could extend support to growth and dividend-paying equities; a hold would suggest the Fed remains cautious on inflation.
Tip: Whichever way the decision goes, this is a good moment to review how your fixed income and cash holdings are positioned for either outcome.
A Historically Strong Singapore Dollar
Away from equities, the SGD has quietly had a remarkable run — strengthening to around 1.2667 against the US dollar, its strongest level since October 2014. This reflects safe-haven demand, Singapore’s AAA credit rating, and expectations that MAS policy will stay stable.
For clients with USD-denominated assets, overseas property, or plans to spend or study abroad, this is worth factoring in: a strong SGD makes overseas spending cheaper, but it can also be a quiet drag on unhedged USD investments when converted back home.
REITs: A Pivotal Recovery Year
With borrowing costs easing, Singapore REITs are seeing a genuine turning point. Lower interest costs are feeding directly into higher distributions (DPU), particularly for REITs with shorter debt maturities. Industrial assets — think data centres and logistics — along with suburban retail are showing the most resilience, while hospitality continues to benefit from the tourism recovery.
Tip: Not all REITs benefit equally. Balance sheet quality — gearing levels and interest coverage — matters more than ever when picking where to add exposure.
Gold’s Extraordinary — and Volatile — Year
Gold surged to an all-time high of over US$5,600 an ounce in January, fuelled by central bank buying, strong ETF inflows, and investors hedging against currency and geopolitical risk — before pulling back through the first half of the year.
It remains historically elevated, and a useful diversifier — but this year has also been a reminder that even “safe haven” assets can be volatile in the short term.
What This Means for You
• Rebalance where needed: especially if your portfolio (or CPF/SRS-linked investments) leans heavily on Singapore financials
• Diversify: consider funds or asset classes you may be currently under-allocated to, including quality S-REITs, to spread out sector-specific risk
• Position for the Fed: revisit your fixed income and cash management strategy ahead of the Fed’s decision
• Mind the currency: if you hold USD assets or are planning overseas spending, factor in the SGD’s strength when deciding whether to hedge or convert
• Don’t let SRS sit idle: if you’re holding SRS funds in cash, this remains a window to deploy them into growth assets while your tax deferral benefit keeps working for you
Markets rewarding patience and diversification rather than chasing the latest headline is nothing new — but with valuations at record levels, a key rate decision just days away, and pockets of volatility resurfacing in tech, now is a sensible time to check that your portfolio still reflects your goals and risk appetite.
If you’d like to go through your portfolio together before year-end, just reply to this email or contact me via whatsapp and we’ll set up a time.
Here’s to navigating the next chapter with confidence!
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek unbiased financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
Published By:
Lisa Ling 林惠萍
As a wealth management coach, I’m passionate about helping people achieve the financial stability and freedom they deserve. After more than two decades in the finance industry, I left my Private Banking career to pursue a new opportunity as a Senior Financial Advisory Manager at Financial Alliance. I specialized in creating personalized insurance and investment strategies tailored to each clients’ individual needs.
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