He says: “We knew the story of the international rules-based order was partially false. That the strongest would exempt themselves when convenient. That trade rules were enforced asymmetrically.
“And we knew that international law applied with varying rigour depending on the identity of the accused or the victim. This fiction was useful, and American hegemony, in particular, helped provide public goods: open sea lanes, a stable financial system, collective security, and support for frameworks for resolving disputes.”
The way Carney sees it, participating in the lie “no longer works”, with a world facing heightened geopolitical tension and economic uncertainty, marked by military conflicts and trade wars, with the US the primary culprit for instability, rather than an anchor for the world.
The first half of 2026 saw the US invading Venezuela in January before ganging up with Israel to attack Iran at the end of February. The attack on oil-rich Venezuela saw the US depose Nicholas Maduro as president, with limited impact on oil prices as the South American nation accounted for a tiny fraction of global oil supply.
See also: Scarce investments
However, the Middle East conflict led to the closure of the Strait of Hormuz, cutting off 20% of the world’s oil and gas supplies overnight. Global oil and energy prices soared as a result, with countries and businesses suffering from inflation and supply chain woes.
Asian countries, heavily dependent on imported oil, had to implement measures to mitigate the fuel shortages. For instance, the Philippine government moved to a four-day work week while Myanmar’s government imposed alternating driving days. In the business world, American budget carrier Spirit Airlines, already financially troubled before 2026, ceased operations in May, citing elevated fuel prices driven by the war in the Middle East.
At home, Singapore brought forward the disbursement of $500 in CDC vouchers to households from January 2027 to June in response to a potential spike in inflation. Businesses, burdened by rising costs and regional competition, lobbied the government against a “first-in-class” carbon tax that would add to already high energy costs and undermine competitiveness.
See also: OCBC keeps Singapore overweight for 2H2026 on steady yield and quality
US interest rate
Other than starting wars, the US and its internal developments have an outsized impact on the world.
The US Federal Funds Rate, the most-watched interest rate in the world, was surrounded by drama, with President Donald Trump attempting to oust Fed chair Jerome Powell as the former demanded lower interest rates, which the latter could not deliver, with higher inflation and stronger employment figures tying the Fed’s hands on the matter.
Powell has since finished his term as chair in May but is staying on as a governor of the Federal Open Market Committee, which sets interest rates. New chair Kevin Warsh has indicated that he prefers a “trim mean” personal consumption expenditure (PCE) inflation rate over the core PCE rate.
Against the backdrop of a US-Iran ceasefire, negotiations for an end to hostilities and the appointment of a new Fed chair, analysts, including those from DBS, JPMorgan and OCBC, believe that US interest rates will likely remain steady within the current 3.5%–3.75% band for the rest of this year.
Global energy security
While the US interest rate remains stable in the foreseeable future, change is likely to accelerate around global energy supply and systems. With the Middle East conflict exposing how countries are vulnerable to energy shocks, states are increasingly diversifying their energy systems and sources, notes the International Energy Agency (IEA).
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“We are in the midst of the largest energy security crisis the world has ever faced — and I believe this will reshape investment strategies globally, with parallels to the major changes the energy world witnessed after the oil shocks of the 1970s,” says IEA executive director Fatih Birol in May. “We are already seeing intensified efforts by both producer and consumer countries to diversify trade routes and energy sources – such as advancing new pipelines and other supply infrastructure, on the one hand, and turning more to domestically available resources, on the other.”
Birol adds that countries are shifting from coal, oil and gas to renewables and, in some cases, nuclear, and are adopting broader measures to strengthen electricity systems, expand electrification and accelerate energy efficiency.
Under Trump 2.0, the US has turned its back on renewable energy to focus on fossil fuel production and has seemingly slowed the push for decarbonising energy. In several well-documented actions, the administration cancelled renewable energy projects and paid energy companies to invest in fossil fuels.
Ironically, US military aggression in 2026 has re-energised the goal for net-zero energy, with governments recognising the role of renewables in strengthening energy sovereignty. While fossil fuels will still power the world, their share of global energy production and demand is expected to decline, with the IEA forecasting that renewables will become the largest global energy source, used for almost 45% of electricity generation by 2030.
Business never stopped, but risks abound
Despite global turbulence, business continued as usual. SpaceX lifted off with the largest IPO — US$1.77 billion — ever in June before losing some altitude as its share price retreated, with investors presumably discerning the hot air emitted by an unprofitable company, while some continue clinging to dreams of ascending beyond the heavens to Mars.
Despite SpaceX’s unbacked lofty valuation, the broader market was backed by real earnings. Several stock markets soared during the first half of the year, reflecting value creation. Powered by the AI boom, Korea’s Kospi Composite Index led the world with a gain of more than 100% while the Taiwanese market index jumped by nearly 60% ytd in the first half of 2026.
The Nikkei 225 grew by nearly 40% and the S&P 500 gained 9.6% while European markets grew between 7% and 11%.
At home, the Singapore stock market gained 11.3% with the benchmark Straits Times Index breaching 5,000 points for the first time. Local banks led the surge with the Monetary Authority of Singapore’s Equity Market Development Programme injecting additional interest in local counters.
In a world experiencing heightened geopolitical tensions, Singapore saw continued wealth inflows attracted to the little red dot’s “stability” premium, shares Maybank Securities head of research Thilan Wickramasinghe.
Investing amid scarcity — AI, energy, stability
The saying “change is the only constant” is attributed to ancient Greek philosopher Heraclitus. Even without the present chaos, change is inevitable as innovation and new technology are invented and diffused.
Suffice to say, while AI is disrupting and changing the way we work and live, it will remain a constant investment theme for the foreseeable future, say multiple analysts.
According to Maybank economists Chua Hak Bin and Brian Lee, inflation is not constraining the AI capex boom, with mega US hyperscalers planning to increase capex by 77% in 2H 2026. Similarly, OCBC believes that AI will remain a “dominant” structural investment theme in equities. With capital continuing to flow into AI-related infrastructure and products such as data centres, processing and memory chips, demand for these AI resources outstrips supply, indicating scarcity.
The increasing adoption of AI and demand for AI-related services are intensifying demand for energy to power AI tasks. A single AI text query uses about 2.9 watt-hours (Wh) of electricity, roughly 10 times as much as a standard web search.
According to IEA projections, data centre electricity consumption is set to more than double to around 945 terawatt-hours (TWh) by 2030, mainly due to AI. This is slightly more than Japan’s total electricity consumption today.
With energy scarcity compounded by the trifecta of AI-driven energy demand, the fuel shock from the Middle East conflict and emerging energy security concerns, the energy theme is an attractive investment proposition for BlackRock, DBS and Julius Baer.
While AI and energy dominate investing conversations, one commodity has been overlooked — stability.
Since the end of the Cold War, the world has remained relatively stable, enjoying economic growth and relative peace. So long as countries play by the rules of the US, America will act as the anchor of stability.
Although markets have demonstrated resilience so far, potential instability has led to volatility, uncertainty, complexity and ambiguity. As the US and Iran work towards ending their war and reviving shipping activity through the Strait of Hormuz, the threat of stagflation is real if the strait remains closed for an extended period, according to MSCI Research.
As markets trudge along and investors search for the next opportunity, perhaps the most important driver for sustainable global growth is not AI nor energy, but stability.
Against the backdrop of the US no longer being a stabilising force and where adherence to the rules of the game is not being rewarded, where can investors find stability, and what is its price?
