STI up 0.4% on Thursday as investors stay positive despite tariff uncertainty, split Fed views

Across the broader market, gainers outnumber losers 324 to 175, with about 1.6 billion securities worth S$1.2 billion changing hands

The local bourse maintained its positive momentum on Thursday (Jul 10) as investors digest US Federal Reserve officials’ split views on the inflationary impact of tariffs.

The blue-chip Straits Times Index (STI) closed 0.4 per cent or 17.88 points higher at 4,075.70. Across the broader market, gainers outnumbered losers 324 to 175, with about 1.6 billion securities worth S$1.2 billion changing hands.

On the STI, Sats was the top gainer, up 1.6 per cent or S$0.05 at S$3.13, after it released its annual reports. DFI Retail Group was at the bottom of the list, down 1 per cent or US$0.03 at US$2.91.

Regional stocks closed mixed. Hong Kong’s Hang Seng Index was up 0.6 per cent and Malaysia’s KLSE grew 0.5 per cent, but Japan’s Nikkei 225 fell 0.4 per cent.

Minutes of the Federal Open Market Committee’s (FOMC) Jun 17-18 meeting released on Thursday showed an emerging divide among Fed officials over monetary policy outlook, given the tariff uncertainty.

UOB’s global economics and markets research team noted that the recent tariff re-escalation with US President Donald Trump’s letters will continue to perpetuate this tariff-led uncertainty, and lead the Fed to maintain its wait-and-see approach.

The team thus still expects a rate-cut pause in July’s FOMC meeting.

“We continue to hold our view of three 25-basis-point rate cuts in 2025, to be executed at the September, October and December FOMC meetings primarily due to downside risks to growth,” wrote the team in a note on Thursday.

“This will bring the Fed Funds Target rate (FFTR) to 3.75 per cent (upper bound of FFTR) by end-2025. We are also keeping our view of two rate cuts in 2026, implying a lower terminal FFTR of 3.25 per cent in 2026.”

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