Stocks fall as Fed warns of higher inflation with oil spike: Weekly Market Recap

I’m a big fan of sushi, so the news that Itacho Sushi is closing down in Singapore caught my attention.

Over the past year, we’ve seen quite a number of F&B closures. In fact, we even talked about this in one of our podcast episodes when discussing how to evaluate retail malls as REIT investors. 

It does feel a bit strange, because the headline economic numbers still look fairly strong. But beneath the surface, some sectors are clearly feeling the pressure. And this was even before the recent spike in oil prices brought inflation concerns back into focus again.

In fact, when we looked at the worst-performing blue chip stocks in Singapore this year, two of them happened to be consumer-related companies — Genting Singapore and Thai Beverage. 

Adding to the uncertainty, oil prices have moved higher again. This week, we look at what the rise in oil prices could mean for markets, and how the Fed’s warning about higher inflation may affect Singapore blue chip stocks.

There is a small silver lining though. With expectations around interest rates shifting, yields have started to move up again. We take a look at what to expect for the upcoming T-bill auction, and whether it makes sense to apply for the current Singapore Savings Bonds (SSBs) or wait for the next issue.

For income investors, we also look at three SGX ETFs offering dividend yields above 6%, and whether those yields are as attractive as they first appear.

Recently, I’ve been hearing the word “stagflation” mentioned more often — the uncomfortable combination of slower growth and higher inflation. It sounds worrying, but it also reminds me why having a well-structured portfolio matters.

We can’t control oil prices, inflation, or the economy. But we can make sure our finances are built in a way that can ride through different conditions.

In the meantime, maybe this is a good excuse to enjoy a meal at your favourite hawker stall or restaurant, before prices go up again.

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

🏛 Fed warns of higher inflation

What happened? 

At its latest meeting, the U.S. Federal Reserve kept interest rates unchanged at 3.5% to 3.75%, in line with market expectations.

However, the Fed raised its forecast for core inflation in 2026, which excludes food and energy, to 2.7%, up from 2.5% previously. 

The latest dot plot shows most policymakers expect rates in 2026 to be around 3.25% to 3.50%, implying only one rate cut this year. While the median projection was unchanged, more officials now expect fewer cuts, suggesting a more cautious outlook on rate easing.

What does this mean?

With the escalation in the Middle East conflict and higher oil prices, inflation may stay elevated, even if the Fed still expects the impact to be temporary for now.

As a result, investors are now pricing in the possibility that rates could stay higher for longer. 

According to the CME FedWatch Tool, traders see about a 60% probability that rates remain at current levels for the rest of the year, compared to expectations for at least one rate cut just one month ago. 

Why should I care?

The S&P 500 index finished lower in a volatile week, as markets reacted to geopolitical tensions, swings in oil prices and persistent inflation concerns.

Oil prices moved higher amid ongoing uncertainty over Middle East supply risks. The 10-year U.S. government bond yield rose to around 4.4%, reflecting expectations that interest rates may stay higher for longer.

Gold prices fell below US$4,500, weighed down by a stronger U.S. dollar and higher bond yields.

In Singapore, the Straits Times Index (STI) moved higher, led by gains in Sembcorp Industries, Singtel and SGX. Local banks including DBS, UOB and OCBC also advanced on expectations that a slower pace of rate cuts could help support net interest margins.

On the other hand, property developers came under pressure as higher-for-longer rates weighed on sentiment, with declines led by Hongkong Land and City Developments.

Learn more about what the rise in oil prices could mean for markets, and how the Fed’s warning about higher inflation may affect Singapore blue chip stocks.

🚗  Moving This Week

• ComfortDelGro will introduce temporary driver fees on app bookings and slightly raise metered taxi rates from 24 Mar to 31 May to help drivers cope with higher fuel costs, with S$0.50 added for trips below S$15 and S$0.80 for S$15 and above, plus a S$0.01 increase in the distance-time rate. CDG said the additional fees will go directly to drivers, on top of earlier fuel-cost support measures as pump prices hit fresh highs. Read more here.
• SIA Group’s passenger traffic rose 3.8% YoY in Feb 2026 to 12.3b revenue passenger-km, driven by Scoot’s 17.4% jump to 3.0b on stronger holiday demand as Chinese New Year shifted into February, while SIA traffic was flat at 9.3b. The group carried 3.3m passengers but load factor dipped to 85.6%, while cargo loads rose to 447.2m tonne-km and cargo load factor improved to 56.7% on slightly lower capacity.
• Tang Organization, the new sponsor of Suntec REIT, said it will conduct a comprehensive strategic review of the portfolio after completing its takeover of the REIT manager on 17 Mar, aiming to strengthen performance and capital efficiency through disciplined asset optimisation and recycling. Tang said these initiatives could support higher distributions in coming years, noting alignment as major unitholders.
• Hongkong Land has acquired a 10.8% stake in Suntec REIT for S$541 million, as it looks to deepen its exposure to Singapore’s prime commercial property market. The group said the deal allows it to redeploy recently recycled capital into income-producing commercial assets in Singapore. Read more here.
• SingLand said The Clifford is drawing healthy interest ahead of its expected 2028 completion, reflecting demand for premium Grade A office space in the CBD. The group remains cautiously optimistic on rents, supported by tight office supply and firm demand, although geopolitical risks remain an overhang.
• Manulife US REIT reported 2H FY2025 distributable income of US$10.6 million, down 31.1% year on year. This translated to a DPU of US$0.006, versus US$0.0087 a year ago. No distribution was declared for the 2H25. Read more here.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

Fed warns inflation may rise. What it means for Singapore blue chip stocks

With the Fed warning that inflation may climb, we look at how slower pace of rate cuts may impact Singapore blue chips, including banks, REITs and dividend stocks.

🤓 What we're looking out for next week

• Monday, 23 March 2026: Singapore Consumer Price Index (CPI) data
• Tuesday, 24 March 2026: UOBAM Ping An FTSE ASEAN Dividend Index ETF ex-dividend
• Thursday, 26 March 2026: Singapore Savings Bond (SSB) application closing date, LionGlobal Singapore Physical Gold ETF listing date
• Friday, 27 March 2026: US PCE Price data

Get the full list of stocks with upcoming dividends here. 

Source: SGX, Bloomberg, Refinitiv

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