Opening Bell - Morning Commentary

US FOMC announcement in Focus, Indian Markets Boosted by EU Trade Deal

World stocks and the S&P 500 reached new highs Tuesday, driven by strong U.S. earnings, while anxiety over President Trump's policies pushed gold to record levels and the dollar to a four-year low.

The S&P 500 rose 0.6% to close at a record near 6,994, and the Nasdaq gained 1.0% as investors focused on big-tech earnings. Apple climbed 3%, Meta rose 2.1%, and Microsoft gained 0.9% ahead of results, while the Dow fell 0.5%, dragged down by UnitedHealth's 18% plunge.

UnitedHealth shares crashed after the Trump administration proposed a minor increase in Medicare Advantage payment rates for 2027, far below expectations. The insurer also issued weak 2026 revenue guidance, pulling down Humana (-17%) and CVS Health (-12%).

The U.S. Dollar Index fell to its lowest level since February 2022, reaching 96.20 as investors grew wary of unpredictable Washington policymaking. Trump's comments that the dollar is "doing great" and can fluctuate "like a yo-yo" failed to halt the decline, which accelerated after he expressed no concern about the weakness.

The Federal Reserve is expected to hold rates between 3.5% and 3.75% when it announces its decision today. Markets show a 95.6% probability of unchanged rates. The announcement comes ahead of the expiration of Fed Chair Jerome Powell's term in May.

Gold hit an all-time high above $5,110 per ounce, climbing over 1% to around $5,080 Tuesday on safe-haven demand amid escalating trade tensions and geopolitical risks.

Trump announced tariffs on South Korean goods would rise from 15% to 25%, affecting cars, pharmaceuticals, and other products, citing Seoul's failure to enact a July trade deal. The move intensified trade tensions as markets await the Fed's decision.

The Conference Board Consumer Confidence Index plunged 9.7 points to 84.5 in January, the lowest since 2014. The Expectations Index fell to 65.1, well below the recession threshold of 80, reflecting consumer concerns about inflation, tariffs, and labour markets despite strong GDP growth.

Nifty staged a dramatic intraday reversal, gaining 126 points to close at 25,175 after plunging to test the key swing low support level.

Nifty formed a double bottom pattern near 25,900 support while reclaiming both 200DMA and 200EMA, indicating early signs of a potential bullish reversal. However, confirmation requires a decisive break above the prior swing high resistance at 25,435, with 24,900 acting as immediate support.

Indian equity markets are poised to open on a positive note, buoyed by robust sentiment surrounding the India-EU trade agreement.