Opening Bell - Morning Commentary

Fed Holds Rates Steady - Attention Turns to Union Budget

Major U.S. stock indexes closed largely flat on Wednesday after the Federal Reserve's policy announcement.

After initial gains, the major indexes pulled back and traded near unchanged levels for most of the session, eventually ending narrowly mixed.

The S&P 500 briefly surpassed 7,000 for the first time during morning trading. The Nasdaq gained 0.91%, driven by semiconductor strength following ASML's record orders, Texas Instruments' strong guidance, and optimism around sustained AI infrastructure spending.

The Federal Reserve held interest rates steady at 3.50% to 3.75% following three consecutive quarter-point cuts. Chair Jerome Powell described the economy as solid, with diminished risks to both inflation and employment, signalling that the central bank will likely remain on hold, with inflation still somewhat elevated.

The U.S. Dollar Index recovered to 96.18 on January 29 after hitting four-year lows near 95.50, following Treasury Secretary Scott Bessent's reaffirmation of a strong dollar policy. The dollar has weakened 10.78% over the past year amid tariff concerns, geopolitical uncertainties, and President Trump's comments accepting currency weakness.

The euro reached $1.20 for the first time since 2021, marking a 13% gain in 2025, supported by European fiscal stimulus, particularly from Germany, and by reduced reliance on the dollar.

WTI crude oil rose 0.87% to $63.76, reaching four-month highs amid heightened geopolitical tensions after President Trump warned Iran to negotiate, with additional support from a weaker dollar and winter weather.

Gold reached an all-time high above $5,500 per ounce with a record single-day gain of $221.70, while silver surged to $116.48, up 277% year-over-year, driven by dollar weakness, geopolitical tensions with Iran, and safe-haven demand.

Nifty extended gains for the second consecutive session, rising 167 points (0.66%) to close at 25,342.

The short-term trend has turned positive, as Nifty has crossed its 5-day EMA at 25270. To maintain this bullish bias, the index must hold the recent swing low of 24,932. Immediate resistance is placed at 25,435, followed by positional 50DEMA resistance at 25,725.

Indian markets are positioned to open modestly lower on cautious global cues.