Global Markets Hold Steady Ahead of Fed Decision as Oil Prices Climb and AI Stocks Rally

US stock market futures edged up as investors waited for the Federal Reserve rate decision due later. S&P 500 futures gained 0.21% and Dow futures rose over 1% at 1300 IST. Oil prices stayed a key risk factor. Brent crude traded above $87 a barrel on Wednesday, after touching $100 last week.

Higher crude oil prices can lift inflation and complicate the Fed’s next move. Markets weighed whether policy may turn more restrictive than expected. The current borrowing cost remained far above the central bank’s 2% inflation goal. Traders also watched global equities for spillovers into US and Asian sessions.

Money market pricing showed a near 70% chance of no rate change, using CME’s FedWatch tool. Traders expected the target range to stay at 3.5%-3.75%. Economists broadly shared that view. Most large brokerages also expected rates to remain unchanged for the rest of the year.

Two banks differed from the wider consensus. Bank of America projected three rate hikes starting in September. Deutsche Bank expected two hikes, also beginning in September. Those views stood out as investors assessed oil-linked inflation risks. Market positioning remained cautious while waiting for the Fed statement and guidance.

"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."

Fed decision: Asian volatility and chip-led selloff

In Asia, South Korean shares saw the sharpest fall in nearly five months on Tuesday. The drop followed a global selloff in semiconductor stocks. SK Hynix and Samsung Electronics were hit. Concerns grew about stronger China competition after ChangXin Memory Technologies (CXMT) made a strong market debut.

The benchmark KOSPI sank 732.09 points, or 10.84%, to 6,023.66 at the close. It was the worst single-day fall since March 4. That earlier session saw a record decline after the outbreak of the Iran war. The move added to caution ahead of the Fed decision.

Fed decision: Indian stock market extends gains

Indian equities stayed firm in Wednesday afternoon trade, with the Nifty moving above 24,250. Buying emerged in IT, FMCG, banking, and metal shares. At around 2:20 pm, the Sensex rose 977.59 points, or 1.27%, to 77,743.51. The Nifty gained 288.25 points, or 1.20%.

Market breadth stayed positive, with 2,332 stocks rising and 1,465 falling. Broader markets also traded higher during the session. The India VIX eased 3.66%, signalling lower near-term volatility. Alongside India’s rise, investors still tracked crude oil prices and the Fed decision for direction across global assets.

Market	Level	Change	Time/Session
S&P 500 futures	—	Up 0.21%	1300 IST
Dow futures	—	Up over 1%	1300 IST
Brent crude	Over $87 per barrel	—	Wednesday
Sensex	77,743.51	Up 977.59 points (1.27%)	Around 2:20 pm
Nifty	24,273.60	Up 288.25 points (1.20%)	Around 2:20 pm
KOSPI	6,023.66	Down 732.09 points (10.84%)	Tuesday close