Singapore Stock Market on Monday Retreats as Traders Eye Federal Reserve Decision

The Singapore stock market on Monday experienced a modest pullback following two consecutive days of gains, signaling a shift in investor sentiment as major policy decisions loom on the horizon. After climbing over 80 points in the previous sessions, the Straits Times Index (STI) surrendered ground to finish just above the 4,860 level, a decline that reflects profit-taking activity across key sectors.

Mixed Sector Dynamics Shape Market Movement

The STI index closed 30.52 points lower, or 0.62 percent, at 4,860.93, trading within a relatively tight band between 4,854.05 and 4,898.14 throughout the session. The pullback was driven primarily by weakness in the financial and industrial sectors, while property stocks displayed mixed performance.

Financial heavyweights like DBS Group retreated 0.61 percent and United Overseas Bank tumbled 2.53 percent, contributing disproportionately to the day’s losses. Industrial stocks also faltered, with Keppel Ltd sliding 0.64 percent. Meanwhile, select names bucked the trend—DFI Retail Group surged 2.70 percent and Wilmar International jumped 3.40 percent, demonstrating that opportunities remained for investors seeking specific exposure.

Global Momentum and the Fed Factor

The weakness in the Singapore stock market on Monday occurred against a backdrop of resilience on Wall Street, where major U.S. averages posted modest gains. The Dow advanced 313.69 points (0.64 percent) to 49,412.40, the NASDAQ climbed 100.11 points (0.43 percent) to 23,601.36, and the S&P 500 added 34.62 points (0.50 percent) to 6,950.23.

However, this upbeat lead from the U.S. may offer only limited support to Asian markets in the near term. The critical catalyst driving market sentiment remains the Federal Reserve’s monetary policy announcement scheduled for Wednesday. While most traders expect rates to remain unchanged, the accompanying statement will be scrutinized for any clues regarding the Fed’s future direction—a development that could significantly influence market positioning across all asset classes.

Geopolitical Uncertainties and Trade Tensions

Beyond monetary policy, traders are contending with mounting geopolitical headwinds. President Donald Trump has threatened to impose tariffs as high as 100 percent on Canadian goods amid negotiations over a potential trade arrangement involving China. Additionally, the U.S. government confronts the specter of another government shutdown, as several Democratic senators have signaled opposition to a spending bill that includes funding for the Department of Homeland Security. These political uncertainties add another layer of complexity to market decision-making.

Commodities Under Pressure

Crude oil prices came under pressure on Monday as production resumed in Kazakhstan, though lingering tensions in the Middle East prevented a sharper decline. West Texas Intermediate crude for March delivery fell $0.42, or 0.69 percent, to settle at $60.65 per barrel. The modest decline in energy prices could eventually influence sentiment in the stock market on Monday-type trading sessions, particularly for energy-exposed sectors.

Looking Ahead

The Singapore stock market on Monday demonstrated the delicate balance between profit-taking and caution, reflecting investor uncertainty ahead of major policy decisions. While the slight retreat suggests near-term consolidation, the broader outlook will likely hinge on the Federal Reserve’s messaging and evolving geopolitical developments in the coming days.