US Market: Wall Street witnessed a mixed performance on Wednesday, February 12, ahead of the pivotal meeting between India's Prime Minister Narendra Modi and the US' 47th President Donald Trump. While hopes of strengthening bilateral ties between India took around, it would be higher than expected CPI inflation data for January 2025 that cautioned market sentiment.
US Market:
Dow Jones: The Dow Jones Industrial Average or DJIA traded at 44,371.02, down by 222.63 points or 0.50%, after hitting an intraday high and low of 44,467.21 and 44,104.48 respectively.
S&P 500: The Standard and Poor's 500 index dipped marginally by 13.64 points or 0.22% to trade at 6,055.14. The index had touched an intraday high and low of 6,063 and 6,003 respectively.
Nasdaq Composite: The tech-heavy index was marginally up by 21.29 points or 0.11% to 19,665.16, outperforming both its Dow and S&P 500 counterparts. In the trading hours, the Nasdaq touched an intraday high and low of 19,682.51 and 19,415.48, respectively.
Explaining the performance, Trading Economics data said, US stocks trimmed sharper losses from morning trading as markets continued to assess how the corporate sector may fare against an increase in long-dated Treasury yields. The S&P 500 and the Nasdaq were close to the flatline, while the Dow trimmed its 500 point plunge but remained firmly lower.
Further, Trading Economics data added that both headline and core inflation rates were firmly above expectations in January, backing concerns that the Federal Reserve will be forced to hold rates at the restrictive level for a longer time to tame above-target price growth. Consequently, investors moved to expect a single rate cut this year instead of earlier bets of two or more, while a third of the market has priced no cuts.
The broad-based selloff was recorded in the majority sectors, with stocks like Exxon Mobil, Blackstone, and Oracle emerging among top losers with a downside of over 2% each. On the contrary, tech giants like Tesla and Apple were top gainers with upsides of over 5% and 1% respectively.
PM Modi-Trump Meeting:
Modi arrived in the United States on the evening of February 12, while his meeting was scheduled on February 13 with Trump at the White House in Washington DC.
Modi becomes the fourth foreign leader to visit Trump during his 2.0 at the White House. Before him, Trump met Prime Ministers Benjamin Netanyahu of Israel and Shigeru Ishiba of Japan. Trump has also met Jordan's King Abdullah.
Among key expectations from this meeting is that India may look to increase its buying of energy and defence products from the US. Further, India is expected to reduce tariffs of reportedly more than 30% items, while looking to cool off Trump's latest 25% tariff on steel and aluminium products.
Further, discussion related to increasing investment, boosting AI and announcing measures related to migrants.
As per Satish Chandra Aluri, Lemonn Markets Desk, markets are keenly awaiting PM Modi's meeting with Trump for clues on tariffs for Indian exports while global cues remained weak as Fed chair Powell indicated no rush for further rate cuts in the US, which is a negative for Emerging Markets like India as US Dollar strengthened and foreign outflows continue.
US CPI inflation:
US consumer price index (CPI) inflation came in at 3% in January 2025, which was higher than 2.9% in December 2024 and above market estimates of 2.9% as well.
On a month-on-month basis, CPI is up by 0.5%, which is a slightly higher scale compared to the 0.4% MoM surge in December. Additionally, core inflation on an annual basis shot up to 3.3%, higher than estimates of 3.1%.
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