U.S. Markets Hit Records on Trade Progress and Cooling Inflation

Top Chinese and U.S. economic officials agreed on a framework for a trade deal on Sunday, with President Donald Trump expressing confidence that an agreement will be finalised when he meets President Xi Jinping in the coming days. The anticipated deal aims to avert a new 100% U.S. tariff on Chinese goods.

U.S. stock markets rallied to record highs, buoyed by inflation data showing less pressure on households than expected—reinforcing expectations that the Federal Reserve will continue rate cuts to support a weakening job market.

Consumer sentiment held steady while housing data came in softer, though neither significantly dampened the bullish trend. Technology stocks led the advance, while defensive sectors like Consumer Staples lagged.

Domestically, earnings from the financial and consumer sectors provided stability. The Sensex gained 0.3% and the Nifty rose 0.33%, while the BSE Mid-Cap and Small-Cap indices each declined 0.26%.

The Nifty ended its six-day winning streak as investors booked profits amid global uncertainties, including U.S. sanctions on Russian oil.

Strong domestic inflows sustained market resilience despite cautious sentiment.

Building on the previous week’s momentum, Indian benchmark indices opened strongly but weakened in the latter half of the last week. Trading remained cautious amid geopolitical tensions and US-China trade uncertainties, which are affecting global markets.

Broader markets mirrored the benchmark’s weakness, with mild profit-taking at higher levels.

Despite the bout of profit-taking, the short-term trend for the Nifty remains firmly bullish, as it trades above its key short-term moving averages. Immediate support for the index is seen at 25580. On the upside, 25950 becomes the immediate resistance.

Negotiators from both the US and China have indicated they are reaching an agreement on various issues, raising expectations of an imminent deal. Indian markets are poised to open higher on optimism stemming from a potential US-China trade deal.