Despite oil crossing US$110 a barrel, the STI managed to rebound 2.2%

Date: March 23, 2026

• The STI regained the 5,000 mark during the week
• Late selling emerged once oil crossed US$110 a barrel but STI still recorded 2.2% rise
• US Fed held rates steady, cited uncertainty due to Middle East war
• US stocks and bonds plunged, major indices close to correction territory
• Rising energy prices, supply chain disruptions and a possible recession
• Manulife US REIT H2 distributable income down 31% at US$10.6m
• Hongkong Land took 10.8% stake in Suntec REIT at S$1.70 per unit

Despite oil crossing US$110 a barrel, the STI still recorded a 2.2% gain

The Straits Times Index rebounded last week and briefly regained the 5,000 level when, probably aided by hefty amounts of short-covering, it rose 66 points on Wednesday to close at 5,002.17.

This rebound proved only fleeting and with oil crossing US$110 a barrel because of the Middle East conflict, selling re-emerged to take the index down to 4,948.87.

However, the index’s earlier gains were sufficient to ensure it recorded a net rise for the week of 106 points or 2.2%.

Average daily volume was S$2.3b versus S$2.2b the previous week.

The US Fed held rates steady but stocks plunged

Stocks marked their worst Federal Open Market Committee decision day since 2024 as higher oil prices clouded the path forward for interest rates.

On Wednesday after the FOMC kept interest rates unchanged at 3.5-3.75%, the Dow Jones Industrial Average fell 769 points, or 1.6%. The S&P 500 dropped 1.4%. The Nasdaq Composite was down 1.5%.

All three marked their worst FOMC decision day since Dec. 18, 2024, according to Dow Jones Market Data. The Dow fell to its lowest level since November.

Though the market had anticipated rates being kept steady, the major indexes fell as Fed Chair Jerome Powell discussed uncertainty surrounding the central bank’s median forecast of one interest rate cut for 2026.

“For this one, though, I think even more than usual, it’s good to take the forecasts with a grain of salt because it’s subject to just very high levels of uncertainty,” Powell said.

US Treasury yields up significantly after Fed decision

US Treasury yields rose significantly last week due to renewed concerns about the near-term path of monetary policy after the Fed’s decision to keep rates steady.

The US 10-Year bond yield was up 2.45% to 4.39%, while the 2-Year bond yield was up 4.8% to 3.91%, and the 30-Year yield was up 0.8% to 4.94%.

US indices fell for fourth consecutive week, close to entering correction territory

All three major indexes fell for a fourth week in a row, the Dow Jones Industrial Average’s  longest weekly losing streak since 2023, according to Dow Jones Market Data. The Nasdaq Composite has also fallen in nine of the past 10 weeks, something it hadn’t done since 2022.

Oil was the market’s dominant driver all week, as it’s been since the war in Iran began on Feb. 28. On Friday, West Texas Intermediate crude oil futures jumped 2.3% to US$98.32 a barrel. Brent crude rose 3.3% to US$112.19.

For the week, the S&P 500 lost 1.9%, while the tech-heavy Nasdaq Composite dipped 2.1%, and the blue-chip Dow fell 2.1%

According to US newspaper Barron’s, the major indices are close to entering correction territory, defined as a fall of 10% from a closing high.

On Friday, the Nasdaq Composite fell 2.4% to 21,563.30. If it closes below 21,562.62, it would enter a correction, according to Dow Jones Market Data.

The Dow Jones Industrial Average closed at 45,577. If it closes below 45,169.33, it would also enter a correction.

The S&P 500 ended at 6506 and needs to close below 6280.74 to enter correction.

Rising energy prices, supply chain disruptions and a possible recession

“The economic cost of surging energy prices is not yet known, so it’s understandable that Chair Powell struck a cautious tone about future rate cuts,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.

“Because oil-supply shocks typically lead to a significant slowing in growth, there will likely be more room for policy easing than many people now expect’’.

On Tuesday, Moody’s economist Mark Zandi wrote that the war, along with a weakening US labour market, has raised the odds of a recession in the next year to an “uncomfortably high 49%’’.

According to a report in US newspaper Barron’s, energy is the biggest problem in sheer dollar terms.

The war has cut off access to about 20% of the world’s crude oil and another 20% of the liquefied natural gas, or LNG, that normally traverses the Strait of Hormuz that connects the Persian Gulf with the rest of the world. Oil prices are up about 50% since the war began.

The impact on some other commodities, though, is starting to cause serious problems. Urea, a crucial fertilizer, and helium, which is needed to make microchips, are in short supply due to the war.

Aluminum, a material used in everything from cans to cars, was already in a supply deficit before the war, and is now getting more scarce and expensive as output from the Middle East is curtailed.

A recession seems likely in Asia “if this drags on for a couple months,” says Jennifer Schuch-Page, a principal at The Asia Group. Historically, about 80% of the oil and natural gas transported through the Strait of Hormuz goes to Asia.

Manulife US REIT H2 distributable income down 31% at US$10.6m

Manulife US Real Estate Investment Trust (MUST REIT) reported a distributable income of US$10.6 million for the second half ended Dec 31, 2025, down 31.1% year on year.

This translates to a distributable income per unit (DIPU) of US$0.006, from US$0.0087 a year earlier. No distribution was declared for H2 FY2025.

Distributions to unitholders have been suspended since 2023 as part of recapitalisation plans and the signing of a master restructuring agreement (MRA).

Following concessions granted under the agreement, lenders have required the trust to keep half-yearly payouts on hold until it meets reinstatement conditions and until relief measures tied to its interest coverage ratio lapse.

For the full year, MUST’s revenue fell 32% to US$113.9 million, whilst net property income (NPI) decreased 33.4% to US$53.2 million.

This brought FY2025 distributable income to US$25.5 million, down 33.2%. DIPU came in at US$0.0144, down from FY2024’s US$0.0215. As at Dec 31, 2025, MUST’s aggregate leverage stood at 58%, up from 56.2% in the third quarter.

Hongkong Land took 10.8% stake in Suntec REIT at S$1.70 per unit

Property developer Hongkong Land has taken a 10.8% stake in Suntec REIT for S$541 million in its drive to grow its presence in Singapore’s prime commercial sector.

It bought 318m units at S$1.70 per unit, a discount to the trust’s net asset value of S$2.03 a unit as at Dec 31, 2025.

In a statement on Thursday, Hongkong Land said the acquisition will enable the group to deploy recently recycled capital into prime, income-producing commercial assets in the city-state.

“This aligns with the company’s positive outlook and conviction in Singapore’s prime commercial property market,” it said. “The yield derived from the company’s stake in Suntec REIT will contribute to the diversification of Hongkong Land’s earnings profile’’.

The move follows the announcement of a comprehensive strategic review of Suntec REIT’s portfolio by its new sponsor, Tang Organization.

The review was carried out to strengthen the performance of the portfolio and to enhance capital efficiency, while also exploring “disciplined approaches to asset optimisation and recycling”.