BANGKOK, Thailand – The US Federal Reserve’s latest interest-rate increase is adding another challenge for global equity markets, while Thailand’s stock market continues to consolidate around the 1,600-point level amid weaker foreign buying and renewed geopolitical concerns. The Federal Open Market Committee voted unanimously on September 16 to raise the federal funds target range by 0.25 percentage point to 3.75%–4.00%. The move was the Fed’s first rate increase since July 2023, with the central bank saying inflation remains elevated and that the decision would support a more timely return to its 2% inflation goal.
The Fed’s September projections also indicate that some policymakers see room for another rate increase before the end of 2026, keeping monetary policy uncertainty elevated for investors. Higher US interest rates can place pressure on global equities by increasing borrowing costs and making fixed-income assets relatively more attractive. Technology and other growth-oriented shares can be particularly sensitive to changes in interest-rate expectations.
For Thailand, the impact comes as the Stock Exchange of Thailand (SET) has entered a period of consolidation following a strong recovery earlier in the year. The SET Index closed August at 1,595.16 points, down 1.8% from July but still 26.6% higher than the end of 2025. The market faced pressure from renewed Middle East tensions, higher oil prices and volatility in US Treasury markets.
Foreign investors were net sellers of Thai shares worth 24.68 billion baht in August. However, they remained net buyers for the first eight months of the year, with cumulative net purchases of 51.18 billion baht. Foreign buying had been an important driver of the market’s earlier recovery. In July, foreign investors recorded net purchases of 48.86 billion baht, helping push the SET Index to 1,623.64 points at the end of the month, up 28.9% from the end of 2025.
The reversal in August has raised questions over whether overseas investors will return to Thai equities during the remaining months of the year. Renewed conflict in the Middle East, oil-price movements, global interest-rate expectations and domestic political developments remain among the factors being watched by investors. The latest Fed decision could add to that uncertainty, particularly for technology and electronics-related stocks that have previously played an important role in driving the market.
At the same time, the SET’s performance in 2026 has not been driven by a single sector. The exchange said market gains have become more broadly distributed, while listed companies reported combined net profit growth of 22.2% year-on-year during the first six months of the year. The SET’s August figures also showed a dividend yield of 4.3%, above the Asian market average of 2.8%, although valuation and earnings expectations remain important considerations for investors.
Market analysts cited in the source material expect the SET to remain sensitive to foreign capital flows and global monetary policy in the months ahead. Some brokerage houses have maintained year-end index targets in the 1,600–1,700 range, although the latest rate decision and changing market conditions could prompt revisions. For investors, the current environment places greater emphasis on company fundamentals, earnings, cash flow and dividend capacity as markets adjust to higher interest rates and continuing geopolitical uncertainty. The direction of foreign investment flows will remain a key factor for the Thai market as the final months of 2026 approach, particularly after overseas investors shifted from heavy buying in July to significant net selling in August.
