Opening Bell - Daily Morning Commentary

Federal Reserve meeting minutes signal a pause in interest rate cut

U.S. stocks ended modestly higher on Wednesday, and the S&P 500 notched its second straight all-time closing high as investors scrutinized the minutes from the Federal Reserve's January policy meeting and digested U.S. President Donald Trump's tariff plans. All three major U.S. equity indexes made gains on the day.

At the Fed's January policy meeting, the U.S. central bank left its key interest rate unchanged. The minutes show policymakers expressed concern about stubborn inflation and the potential effect of Trump's policy proposals, particularly tariffs, on their efforts to bring price growth down to their target.

US President Donald Trump's tariff threats continued to weigh on risk appetite. Trump announced he would impose tariffs "in the neighborhood of 25%" on autos, semiconductors, and pharmaceuticals, the latest in a series of measures that have raised concerns over the consequences of a global trade war.

China kept its loan prime rates steady, focusing on financial stability. Stocks in Japan and Australia dropped, while equity index futures for Hong Kong also drifted lower after the minutes of the Fed meeting.

The Nifty declined for the second consecutive session, concluding the day with a loss of 12 points to settle at 22,932. Although the index demonstrated weakness, the broader market exhibited resilience. The critical support level of 22,800 was successfully protected once again. Should the index surpass 23050, that will pave the way for an extended recovery toward the subsequent resistance of 23235.

Markets are expected to start trading on a subdued note today amid escalating concerns regarding trade tensions and the anticipated postponement of the Federal Reserve's interest rate reductions.