OCBC Investment Research
Date of Report: 19 September 2025
Global Markets Rally as Monetary Easing and Tech Optimism Set New Highs

Market Overview: Wall Street Surges to Record Highs on Fed Optimism

Global equity markets soared to new records, led by US stocks, as investors welcomed the Federal Reserve’s pivot toward monetary easing. Risk appetite surged, particularly in small-cap and technology shares. Key highlights included:

• Federal Reserve’s shift to a more accommodative stance fueled expectations for further rate cuts, supporting broad-based gains across risk assets.
• Bond yields rose after previous declines, with the 2-year Treasury at 3.57% and the 10-year at 4.1%.
• Technology stocks outperformed, notably after Nvidia’s US\$5 billion investment in Intel, sending Intel shares up 23% and Nvidia up 3.5%—reversing earlier losses tied to China chip news.
• Semiconductor sector advanced 3.6%; the broader S&P 500 technology sector added 1.36%.
• Major indices closed at all-time highs:
  • S&P 500: +0.48%
  • Nasdaq Composite: +0.94%
  • Dow Jones Industrial Average: +0.27% (+124 points)
  • Russell 2000 (small-caps): +2.51%, first record close since November
• Consumer staples and discretionary stocks were the main laggards.
• Investors are currently pricing in around 44.2 basis points of rate cuts by the end of 2025.

Regional Markets: Europe Recovers, Asia Mixed as China Tech Cools

Europe

• Stoxx Europe 600 Index rose 0.80%, with technology leading the rally. Utilities and personal care stocks lagged. The index is now just 1.4% below its March record, with sentiment upbeat on global economic resilience.

Asia

• MSCI Asia Pacific Index fell up to 0.7%, pressured by late-session losses in Chinese shares as profit-taking hit major tech names like Tencent and Alibaba.
• CSI 300 Index: -1.2%
• Hong Kong-listed China stocks: -1.5%
• South Korea outperformed, buoyed by chipmaker optimism and AI enthusiasm. KOSPI +1.4%.
• Japan tech shares advanced on sustained AI interest.

Singapore Market Performance

• Straits Times Index closed at 4,312.6 (-0.3%).
• Financials, REITs, and real estate sectors all declined modestly.
• Market breadth: 227 gainers vs. 335 losers.
• Volume: 2,357m shares (+2.4%).
• Turnover: \$1,416.7 million (-0.5%).

FX & Commodities: Dollar Weakens, Gold Eases

• USDSGD: 1.2820 (-0.3%)
• USDJPY: 148.00 (-0.7%)
• USDCNY: 7.112 (-0.1%)
• USDHKD: 7.778 (0.0%)
• WTI Crude: \$63.57/bbl (-0.7%)
• Brent: \$67.44/bbl (-0.8%)
• Gold: \$3,644.3/oz (-0.4%)
• Silver: \$41.83/oz (+0.4%)

Latest Company and Sector Research: Highlights from OCBC Investment Research

OCBC has released a series of fresh equity research reports on prominent companies and sectors in Singapore, Hong Kong, and China. Below is a summary of the latest ratings and target prices:

Singapore Blue Chips: Market Capitalisation, Valuations, and Recommendations

The following table details the major constituents of the Straits Times Index, sorted by market cap, and includes key financial metrics and consensus recommendations:

Key Observations and Market Trends

• Small-cap stocks outperformed, with the Russell 2000 hitting a record, driven by expectations of a more accommodative Fed and renewed AI sector enthusiasm.
• Singapore’s REITs and property trusts continue to offer attractive yields, with names like CapitaLand Integrated Commercial Trust, Ascendas REIT, and Mapletree Logistics Trust all yielding above 5%.
• Major Singapore banks (DBS, OCBC, UOB) remain top picks for yield and stability, with consensus “Buy” recommendations dominating.
• Sector rotation is evident, as technology and AI-linked names drive gains globally, while traditional defensives such as consumer staples lag.

Conclusion: Outlook Remains Bright Amid Policy Tailwinds

With central banks—most notably the US Federal Reserve—signalling an easing bias, risk assets are likely to stay in favour. Technology, AI, and semiconductor sectors appear poised for further gains, and small-cap stocks are benefitting from lower funding costs. Singapore’s equity landscape remains robust, anchored by heavyweight banks and high-yielding REITs, while selected industrial and technology names present differentiated growth opportunities. Investors are advised to monitor monetary policy and sector rotations closely, and maintain a diversified approach to capture opportunities amid the ongoing global market rally.