Despite the US kicking off a global tariff war and ongoing uncertainty around inflation in the world’s biggest economy, global stocks actually delivered a surprisingly strong return in 2025.
After that sea of red following “Liberation Day” on 1 April, and some truly wild tariff rates announced by President Trump, most of us would have forgiven 2025 for being a year to forget.
But as markets tend to do, things turned around—driven in large part by a huge rally in stocks related to Artificial Intelligence (AI).
That helped the MSCI All Country World Index (ACWI) notch an incredible +22.9% return for 2025, marking its third consecutive year of double-digit gains.
Okay, sure, stocks are now at all-time highs. So you might be asking yourself, “Aren’t we due for a massive sell-off?”
It’s a fair question. Still, there are key trends and opportunities shaping up in the global economy. Here’s a look at what investors should be watching in 2026.
Artificial Intelligence (AI): Time for Results
No surprises here: AI remains the hottest topic in markets. NVIDIA Corp (NASDAQ: NVDA) is now the world’s most valuable company, leapfrogging even Apple Inc (NASDAQ: AAPL) and Microsoft Corp (NASDAQ: MSFT).
Meanwhile, Alphabet Inc (NASDAQ: GOOGL)—parent of Google and YouTube—has seen its shares soar by over 85% in just six months. That surge has made it the world’s second-most valuable firm, behind only Nvidia.
Yes, yes, we’ve all heard about ChatGPT, Anthropic, and Gemini threatening to replace half of humanity’s jobs if Artificial General Intelligence (AGI) ever materialises. (That’s the point where machines have human-like cognitive abilities, in case you’re keeping score.)
But what does all this mean for our portfolios? Well, these tech giants are pouring tens of billions into massive data centres to run AI algorithms and training models.
The NASDAQ Composite Index—a tech-heavy benchmark—gained over 20% in 2025. Yet, outside of Nvidia (whose earnings have skyrocketed thanks to chip demand), most of the other tech giants haven’t exactly seen profits explode.
Put simply, investors are likely to get louder with their “Show me the money!” calls when these tech behemoths report earnings in 2026.
Exactly how AI is contributing to profits will be under the microscope, and everyone will be watching to see which firm leads the AI race—or if a Chinese tech giant pulls ahead.
There’s also the inevitable question: “Are we in a tech bubble?” The answer is rarely straightforward.
No one knows it’s a bubble until it bursts. But this AI rally does differ from the Dotcom Bubble of 2000. Back then, companies were writing business plans on napkins. Today, the “Magnificent 7” are wildly profitable and essentially printing cash.
So, for investors, the key is to watch how much the tech giants are spending on capital expenditure—and, more importantly, how much AI is actually contributing to profits. That could determine whether this AI-driven rally is sustainable, or just the latest bubble.
Gold: Ooooooooo, that’s shiny!
If you thought global stocks’ 22% gain in 2025 was impressive, gold’s 65% return last year makes stocks look seriously dull–like a fixed deposit (FD) in comparison.
Gold is gaining ground in portfolios everywhere thanks to ongoing uncertainty—whether it’s Trump’s tariffs, tensions between Russia and Europe, or the US and China staring each other down.
All this comes down to one thing: not many global investors, whether that’s massive central banks or individual investors, have as much confidence in the strength of the US Dollar.
That’s why central banks have been buying gold en masse. In other words, they’re hoarding it, just in case President Trump cooks up another off-the-wall policy in the next four years.
Given all this, it’s no wonder individuals are adding gold to their portfolios, too. The only question is: has gold “run up too far, too fast”?
Compare it to silver’s 147% surge in 2025 and, suddenly, gold’s gain looks tame. Still, the fundamental drivers that made gold the star of 2025 remain in place for 2026.
The debate now: should investors chase gold higher after such a rally? For context, most traditional portfolio models suggest a 5–10% allocation to gold.
Singapore: Staying Close to Home
Now, let’s talk about Singapore and the local stock market’s resurgence. In 2025, the Straits Times Index (STI) posted an impressive total return of 28.8%, up from just over 20% in 2024.
Why? For one, Singapore’s banks are thriving on higher interest rates—they’re absolutely loving that fat net interest income (NII) and the juicy margins on lending.
But beyond that, Singapore’s market is also seen as a safe haven amid global uncertainty.
With mature, cash flow–positive companies paying out healthy dividends, and a strong local currency, Singapore has stood out. The Singapore Dollar’s strength against the US Dollar—and the government’s rock-solid credit rating—make a compelling case.
Then, there’s the Equity Market Development Programme (EQDP), announced by the Monetary Authority of Singapore (MAS) in February 2025. That’s boosted market sentiment even further.
Hopes are high for renewed interest in small- and mid-cap companies, as well as the STI’s heavyweights. All of which bodes well for 2026.
So, where to next, with DBS Group (SGX: D05) and Oversea-Chinese Banking Corporation (SGX: O39) hovering near all-time highs? Singapore’s big banks are still yielding north of 5%, but remember—dividends aren’t guaranteed to keep rising.
There’s also growing interest in sectors like REITs (as rates keep falling) and companies turning the corner on earnings and growth.
Always Stay Diversified
Whatever you do, diversification remains crucial. Do your own research, and spread your investments across assets that suit your risk appetite.
The outlook for 2026 will be just as unpredictable as 2025—just like any year. So don’t get swept up by short-term headlines.
But keep an eye on the big trends. For Singapore investors, the AI story and local opportunities will likely hog the limelight in 2026.
And gold? Expect it to remain a hot topic, with global uncertainty far from over.
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The information provided in this article is for general information and educational purposes only and does not constitute financial advice. Readers should seek advice from a licensed financial adviser before making any investment or insurance decisions.
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