Sensex and Nifty 50 are likely to open lower on Thursday after US President Donald Trump overnight announced 25% tariffs on Indian goods, effective August 1.

Asian markets traded mixed, while Wall Street mostly ended in the red following the US Federal Reserve’s policy decision and Chair Jerome Powell’s comments.

Following Powell’s statement, expectations for a Fed rate cut in September dropped below 50%, according to LSEG data.

However, on Wednesday, Indian equities extended their winning streak for a second day, with the Nifty 50 closing above the 24,800 mark.

Domestic Market Recap

On Wednesday, Indian indices closed in the green:

• Sensex gained by 143.91 points (0.18%) to close at 81,481.86
• Nifty 50 moved up by 33.95 points (0.14%) to settle at 24,855.05

Gift Nifty

Gift Nifty was trading near 24,669, around 200 points lower than the previous Nifty futures close, hinting at a negative start for Indian markets.

Overnight Wall Street Performance

The US stock market ended Wednesday’s volatile session mixed after the Federal Reserve left interest rates unchanged and Chair Jerome Powell tempered hopes for a rate cut in the September meeting.

• Dow Jones Industrial Average slumped by 171.71 points (0.38%) to close at 44,461.28.
• S&P 500 down by 7.96 points (0.12%), ending at 6,362.90.
• The Nasdaq Composite was trading higher by 31.38 points (0.15%), finishing at 21,129.67.

Gold Prices

Gold prices bounced back from a one-month low recorded in the previous session, as ongoing trade uncertainty boosted demand for the precious metal despite lower expectations of a US Federal Reserve rate cut.

• Spot gold was trading up by 0.4% at $3,286.99/oz 
• US gold futures slumped by 0.5% at $3,282.10

Crude Oil Prices

• Brent crude surged by 0.33% to $73.48/barrel
• US West Texas Intermediate (WTI) crude was trading 0.29% higher at $70.20/barrel

Overnight Major Global Events Driving Sentiment

1. Trump Tariffs: US President Donald Trump imposed a 25% tariff on Indian goods, effective August 1, citing India’s high trade barriers. He also announced an additional “penalty” due to India’s ongoing defence and energy ties with Russia. Trump made the announcement via a post on his Truth Social platform, stating the tariff would take effect on Friday.
2. US GDP: The US economy rebounded more strongly than expected in the second quarter. GDP grew at an annualised rate of 3.0%, reversing a 0.5% contraction in the first quarter, the first decline in three years. The inflation-adjusted size of the economy crossed $30 trillion for the first time.
3. US Federal Reserve: The Federal Reserve kept interest rates steady in the 4.25% to 4.5% range for the fifth straight meeting. Despite a strong labour market and a low unemployment rate, the Fed noted that inflation remains “somewhat elevated.” Fed Chair Jerome Powell’s remarks weakened expectations of a rate cut in September.
4. US Private Payrolls: US private employers added 104,000 jobs in July, exceeding expectations. This followed a revised 23,000-job decline in June.

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