Monthly Market Wrap: Driven by the banks, the STI set five all-time highs in June despite on-off global uncertainty and tech selloff

Date: July 1, 2026

• The STI gained 2.6% for the month at 5,170.65
• On the 25^th, the index closed at a new all-time high of 5,218.96
• US stocks enjoyed strong first half
• Banks led the way with gains of 4.1-5.9%, SIA jumped 13%
• On-off US-Iran conflict dominated investor sentiment
• Kevin Warsh took over as Fed chief and caused stocks to plunge with hawkish tone; markets now expect a rate hike in July
• US Supreme Court denied Trump’s bid to fire Fed governor Cook
• All eyes were on Space X’s debut on Nasdaq
• Other than banks, SIA and Singtel were also firm
• Technology Stocks Lost Momentum

 

A Month of New Records

June will be remembered as another milestone month for the Singapore stock market.

Despite on-off geopolitical tensions, volatility in global technology stocks and fluctuating oil prices, the Straits Times Index (STI) continued its remarkable upward march, crossing the psychologically important 5,100 and 5,200 levels for the first time in history whilst setting five all-time closing highs along the way.

The first all-time closing high came on 3 June when the index ended the day at 5,138.24. After falling back to 4,958 on 10 June, the index then rose to a second all-time closing high for the month at 5,176.46 on 17 June.

The third record came a day later on 18 June when the index closed at 5,212.84, the fourth was 5,215.99 on the 24^th and the fifth came on the 25^th with the STI at 5,218.96.

Foreign institutional investors remained steady buyers throughout much of the month, reportedly encouraged by Singapore’s “safe haven’’ reputation and anticipation of more market-supporting measures from regulators.

Local investors also appeared increasingly confident that the market’s upward momentum remained intact, helping sustain healthy trading activity throughout June.

For the month of June, the STI rose 133 points or 2.6% at 5,170.65. The gain for the second quarter was 285 points or 5.8% whilst for the year to date, the index has risen 524 points or 11.3%.

 

US stocks enjoyed a strong first half

The Dow rose on Tuesday to lock in its best first half of a year since 2021.

The blue-chip index gained 135 points, or 0.3%. The S&P 500 rose 0.8%. The Nasdaq led the major indexes with a 1.5% gain.

The Dow is up 8.9% this year, while the S&P and Nasdaq closed out the first half with gains of 9.5% and 13%, respectively.

The yield on the 2-year Treasury note rose to 4.14%. The 10-year yield was up to 4.42%.

 

On-off US-Iran conflict dominated investor sentiment

International events played a major role in shaping investor psychology during the month.

The biggest positive catalyst came when the United States and Iran announced a peace agreement on 15 June aimed at ending weeks of military confrontation.

The agreement immediately reduced fears that shipping through the Strait of Hormuz would remain disrupted, easing concerns over global oil supplies and inflation.

Financial markets responded enthusiastically. Oil prices fell sharply, global equity markets rallied and investor confidence improved almost overnight.

However, towards the end of June, reports emerged that fighting had resumed in parts of the region, raising doubts about the durability of the agreement.

Even so, the Singapore market retained most of its gains, highlighting the depth of buying support.

 

Kevin Warsh took over as Fed chief and caused stocks to plunge with hawkish tone; market now expects rate hike

New Federal Reserve Chair Kevin Warsh caused stocks to fall during his debut policy meeting by delivering a hawkish tone that surprised investors.

He emphasized that “The Committee will deliver price stability”, indicated the Fed would provide much less “forward guidance”, and warned that rate cuts were off the table while rate hikes remained a possibility.

He stated that he prefers the market to react to real-time economic data rather than relying on the Fed’s traditional forward guidance. Investors dislike uncertainty, leading many to sell off riskier assets like stocks.

The Fed also released updated interest rate projections showing that several officials had pencilled in rate hikes for later in the year, effectively eliminating hopes of near-term rate cuts.

As of Tuesday this week, the futures market was pricing in a 34% chance that interest rates will be raised at the 29 July Federal Open Markets Committee meeting, with a 66% chance that rates would be held steady.

 

US Supreme Court denied Trump’s bid to fire Fed governor Cook

The US Supreme Court on Monday denied President Donald Trump’s bid to oust Federal Reserve governor Lisa Cook, a decision that preserves her position and is widely seen as reinforcing the central bank’s independence in setting the nation’s monetary policy.

In a 5-4 decision, the Court upheld the lower courts’ rulings that Cook could continue serving at the central bank as her legal case challenging the termination moves forward.

“The Government has not shown that it is likely to prevail on the legal arguments advanced in its stay application,” Chief Justice John Roberts wrote in the majority opinion on Monday.

Further, the Court rejected the government’s “halfhearted contention” that Cook received due process.

“At minimum, Cook was entitled to some explanation of the evidence at issue, some avenue for a response, and a deadline by which a response would be due,” the opinion noted.

 

All eyes were on Space X’s debut on Nasdaq

As it turned out, Space X’s debut in the second week of the month was spectacular, the stock closed at US$160.90, 19.2% above its US$135 offer price, lifting its market capitalization above US$2 trillion.

However, as the month progressed, the stock came under a bit of pressure and ended June around US$170.

 

Banks Continue to Drive the Market with gains of 4.1-5.9%

DBS, OCBC and UOB remained the principal engines behind the market’s advance. Investors continued to reward their strong earnings, healthy capital positions, resilient balance sheets and attractive dividend policies.

Together, the three banks accounted for much of the STI’s rise during June and reinforced Singapore’s reputation as a market built on fundamentally strong financial institutions.

CGS International (CGSI) upgraded its outlook on the Singapore banking sector from “neutral” to “overweight”, amid robust capital inflows and continued loan growth.

In a 9 June report, the brokerage said it believes local lenders are well-positioned for return on equity (ROE) expansion, driven primarily by net interest income (NII) growth and ongoing structural gains within their wealth management business.

In line with this upgrade, CGSI raised its financial year 2027 to 2028 earnings per share (EPS) estimates across the three local banks, with increases ranging from 2.6 to 6.3%.

Over the month, DBS rose S$2.56 or 4.1% to S$65.40, OCBC’s gain was S$1.39 or 5.9% at S$24.79 and UOB jumped S$2.16 or 5.7% to S$39.76.

 

SIA and Singtel also contributed

Outside the banking sector, Singtel continued to hold up well as investors focused on the value of its regional associates, digital infrastructure and data centre investments. In June, the stock rose S$0.07 or 1.6% to S$4.41.

Singapore Airlines also remained resilient despite geopolitical uncertainty, supported by firm passenger demand and healthy operating performance.

Over the month SIA rose S$0.88 or 13% to S$S$7.68.

 

Technology Stocks Lost Momentum

Global technology shares weakened after a sharp sell-off on Nasdaq prompted concerns that AI-related valuations had become stretched.

The weakness spilled into Singapore, with AEM Holdings, UMS Integration and Frencken Group all coming under selling pressure as investors reduced exposure to semiconductor-related stocks.

Fortunately, technology represents only a modest portion of the STI, allowing gains elsewhere to offset the declines.