US stock market futures edged up as traders waited for the Federal Reserve rate decision due later. At 1300 IST, S&P 500 futures gained 0.21%. Dow Jones Industrial Average futures rose more than a percent. However, crude oil prices stayed a key risk. Higher energy costs can lift inflation and shape rate bets.
Money market pricing showed investors expected the Federal Reserve to pause. CME’s FedWatch tool put the odds near 70% for no change. The target range was seen at 3.5%-3.75%. Economists largely shared that view. Still, oil and inflation remained central concerns for markets globally.
Brent crude traded above $87 per barrel on Wednesday. It had touched $100 last week. Investors weighed whether higher oil could keep inflation sticky. The current borrowing cost was already well above the Federal Reserve’s 2% mandate. Some traders feared this could pressure officials to lean more hawkish.
"For now, I think the market's pretty comfortable with where they are. We've seen them bounce around a little bit, but generally, I think they're going to be range-bound in the second half of the year," said Dave Sekera, chief US market strategist for Morningstar.
"So, how have we performed here in the second quarter? US market was up quite a bit, 15.5%. Surprise to nobody is really the AI stocks that were driving the returns. The growth category, up about 23.5% over the course of the quarter, well outpacing both core and value."
Federal Reserve rate path in focus as brokerages diverge
Most major brokerages expected steady Federal Reserve rates for the rest of the year. Bank of America and Deutsche Bank differed from that base case. Bank of America projected three rate hikes. Deutsche Bank expected two hikes. Both banks placed the first move in September, unlike most forecasts.
Federal Reserve risk backdrop includes South Korean stocks and chip selloff
South Korean stocks logged the sharpest drop in almost five months on Tuesday. The slide followed a global selloff in semiconductor shares. SK Hynix and Samsung Electronics fell as chip pressure grew. Competition worries rose after ChangXin Memory Technologies (CXMT) made a strong market debut.
The benchmark KOSPI fell 732.09 points, or 10.84%, to 6,023.66. It was the worst day since March 4. That earlier fall followed the outbreak of the Iran war. The key figures are listed below for clarity.
| Index | Points change | % change | Close | Reference |
|---|---|---|---|---|
| KOSPI | -732.09 | -10.84% | 6,023.66 | Worst since March 4 |
Federal Reserve event day coincides with Sensex and Nifty gains
In India, the stock market stayed firm in Wednesday afternoon trade. Nifty crossed 24,250 as buying spread across IT, FMCG, banking, and metal shares. Around 2:20 pm, Sensex rose 977.59 points, or 1.27%, to 77,743.51. Nifty gained 288.25 points, or 1.20%, to 24,273.60.
Market breadth remained positive, with 2,332 stocks advancing and 1,465 declining. Broader markets also moved higher during the session. IT, metal, FMCG, and private banking stocks helped lead the rise. The India VIX eased 3.66%. That drop signalled lower volatility and steadier sentiment as trading continued.
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