OCBC Investment Research Private Limited
Date of Report: 9 September 2025
Global Market Pulse: U.S. Rate Cut Bets, European Uncertainty, and Asia Tech Surge Drive Investor Sentiment

U.S. Market Outlook: Fed Rate Cut Expectations, AI Momentum, and Gold Rally

Federal Reserve officials are shifting their focus from tariff-driven inflation to concerns about potential employment weakness. With inflation expectations steady and tariff-related price increases seen as temporary, investors have fully priced in at least a 25-basis point rate cut at the Fed’s policy meeting on 17 September. Futures markets even reflect a 10% chance of a more aggressive 50-basis point cut. This dovish tilt has driven Treasury yields to their lowest since 2022.

• Technology and AI stocks: Tech and AI-linked companies buoyed market sentiment, led by a 3.2% gain in Broadcom, pushing the Nasdaq to a record high (+0.45%). The S&P 500 rose 0.21%, though 6 of 11 sector indices declined, with utilities down the most (-1.07%) and technology up (+0.67%). The Dow Jones gained 0.25%, but only 13 of its 30 stocks ended higher.
• Gold surge: Gold futures soared to new records, closing at US\$3,676.30/oz after peaking at US\$3,685.70. Expectations of U.S. rate cuts and increased safe-haven demand drove this rally. Upcoming U.S. economic data, including inflation figures, may test gold’s strength.

Europe: Political Uncertainty and Economic Headwinds

France faces increased political instability, with Prime Minister François Bayrou set to resign and President Macron searching for his fifth PM in under two years. The timing is critical—France’s deficit is now the largest in the euro area, national debt is rising by €5,000 per second, and economic growth is stalling. Germany’s economy is also faltering, with unemployment at its highest since 2015.

• Equity performance: The Stoxx 600 index closed up 0.52%, supported by retail and banking shares, while telecoms lagged. European equities remain favored over U.S. markets, bolstered by supportive fiscal and monetary policies, attractive valuations, and resilient earnings momentum.

Asia: Technology Leads Gains Amid Currency Tailwinds

Asia-Pacific equities posted a robust session, with the MSCI Asia Pacific Index up as much as 0.8% for a third straight gain. Key technology names like Alibaba, Tencent, and Nintendo were major contributors. Japanese benchmarks surged over 1%, aided by a weaker yen and optimism for growth under an incoming government.

Singapore Market Overview: REITs Outperform, Turnover Slips

• 52-week range: 3,372.4 – 4,320.4
• Gainers / Losers: 402 / 212

Global Market Performance at a Glance

FX & Commodities Market Summary

Recent Equity Research Highlights: Analyst Coverage and Recommendations

OCBC Investment Research released a series of sector and company-specific reports in recent weeks, providing updated ratings, target prices, and insights into key market movers across Asia.

Singapore: STI Component Stocks Sorted by Market Capitalisation

Below is a detailed breakdown of the Straits Times Index (STI) component stocks, including key financial metrics and analyst recommendations. This comprehensive view covers the major movers and laggards in the Singapore market.

Key Company Analysis and Sector Highlights

DBS Group Holdings Ltd (DBS SP)

• Largest market cap among STI constituents (US\$112.5bn).
• Offers a strong dividend yield (5.2% historical, 5.9% forward) and steady P/E of 13x.
• Analyst sentiment: 10 Buy, 8 Hold, 1 Sell.

Oversea-Chinese Banking Corp Ltd (OCBC SP)

• Second-largest by market cap (US\$58.9bn).
• Attractive dividend yield (4.9% historical, 5.8% forward), P/E 10-11x.
• Analyst recommendations: 4 Buy, 14 Hold, 1 Sell.

Singapore Telecommunications Ltd (ST SP)

• Market cap: US\$55.8bn.
• Dividend yield of 4.4-4.3%; P/E elevated at 18-25x.
• Analyst sentiment: 17 Buy, 0 Hold, 1 Sell.

United Overseas Bank Ltd (UOB SP)

• Market cap: US\$46.1bn.
• Dividend yield: 5.0-5.8%; P/E ratio: 10-11x.
• Recommendations: 7 Buy, 10 Hold, 1 Sell.

Singapore Technologies Engineering Ltd (STE SP)

• Market cap: US\$19.3bn.
• Dividend yield: 2.1-2.3%; P/E: 32-28x.
• 5 Buy, 10 Hold, 2 Sell.

Research Ratings Methodology

• Buy: Total expected returns (excluding dividends) >10% (for most stocks), >30% for small caps (S\$150m and below).
• Hold: Returns between +10% and -5% (for most stocks), +/-30% for small caps.
• Sell: Returns <-5% (for most stocks), <-30% for small caps.
• For REITs and Business Trusts, total expected returns include dividends.

Conclusion: Navigating Market Volatility and Opportunity

The global markets remain highly dynamic, with U.S. monetary policy, political risks in Europe, and Asia’s tech resilience dominating the investment narrative. Singapore’s blue-chip stocks offer a mix of yield and value, with selected sectors—especially REITs and financials—standing out for their stability and growth potential. Investors should continue to monitor macroeconomic signals and sector-specific developments, leveraging analyst insights to navigate both risks and opportunities in the months ahead.