The domestic equity indices, Sensex and Nifty 50, will likely open higher on Wednesday, even as overnight global markets remain cautious ahead of the US Federal Reserve’s policy decision.

Asian markets traded lower, while US markets closed in the red overnight as investors awaited the expected Fed rate cut.

However, on Tuesday, the Indian stock market rallied, driven by optimism over a potential India–US trade deal and expectations of a 25-bps rate cut by the US Federal Reserve.

Domestic Market Recap

On Tuesday, Indian indices closed in the green:

• Sensex surged by 594.95 points (0.73%) to close at 82,380.69
• Nifty 50 moved up by 169.90 points (0.68%) to settle at 25,239.10

Gift Nifty

Gift Nifty was trading near 25,392, around 61 points higher than the previous Nifty futures close, hinting at a positive start for Indian markets.

Wall Street Performance

The US stock market closed lower on Tuesday after choppy trading, as investors turned cautious ahead of the Federal Reserve’s anticipated interest rate cut.

• The Dow Jones Industrial Average slumped by 125.55 points (0.27%) to close at 45,757.90.
• S&P 500 down by 8.52 points (0.13%), ending at 6,606.76.
• The Nasdaq Composite was trading lower by 14.79 points (0.07%), finishing at 22,333.96.

Gold Prices

• Spot gold was trading at $3,690.09/oz
• US gold futures were trading 0.15 higher at $3,727.30

Overnight Major Global Events Driving Sentiment

1. India–US Trade Talks: India and the US described the talks between Chief US negotiator Brendan Lynch and Indian counterpart Rajesh Agrawal, Special Secretary in the Department of Commerce, on a proposed bilateral trade pact as “positive and forward-looking.” Both countries agreed to intensify efforts to finalise a mutually beneficial agreement at the earliest.
2. US–China Trade Deal: China hailed the framework deal to shift TikTok’s ownership under US control as a “win-win” and announced plans to review the app’s technology exports and intellectual property licensing. Investors now await Friday’s scheduled call between US President Donald Trump and Chinese President Xi Jinping, where the agreement is expected to be confirmed.
3. US Industrial Production: US factory output unexpectedly rose 0.2% in August after a downwardly revised 0.1% decline in July, defying economists’ forecasts of a 0.2% drop. On a yearly basis, factory production increased 0.9% in August.
4. US Retail Sales: US retail sales posted stronger-than-expected growth in August, marking the third consecutive month of solid gains. Sales rose 0.6% last month, following a revised 0.6% increase in July, compared with expectations of a 0.2% rise. On a year-over-year basis, sales jumped 5.0%.
5. Japan Trade Deficit: Japan’s exports fell for the fourth straight month in August, slipping 0.1% YoY—less than the forecast 1.9% drop and following July’s 2.6% decline. Imports fell 5.2%, against expectations of a 4.2% rise. The country posted a trade deficit of 242.5 billion yen ($1.66 billion), significantly narrower than the forecast deficit of 513.6 billion yen.

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