Stocks drift sideways ahead of key events

Major US indices closed nearly flat on Monday as investors awaited retail earnings and Federal Reserve Chair Jerome Powell’s Jackson Hole speech. The S&P 500 and Nasdaq hovered around unchanged, while the Dow slipped 0.1% in quiet trading dominated by anticipation.

Markets remained range-bound ahead of Powell’s address later this week, with investors focused on potential signals for September rate cuts amid cooling labour market conditions. While markets widely expect a 25-basis point cut next month, strong July producer inflation data and concerns over the Trump administration’s trade tariffs have introduced uncertainty.

Attention also centred on diplomatic developments as President Trump met with Ukrainian President Volodymyr Zelensky and European leaders at the White House. These meetings follow Trump’s Friday discussion with Russian President Vladimir Putin in Alaska, which yielded progress but no concrete agreement to end the Ukraine conflict. Trump indicated plans to arrange direct talks between Zelenskyy and Putin for potential trilateral peace negotiations.

This week’s earnings calendar features major retailers including Walmart, Target, Home Depot, and TJX Companies.

Crude oil declined to $62.48 amid global economic uncertainty and cautious market reaction to the ongoing diplomatic talks, with energy sentiment pressured by trade tensions and the US administration’s Russia policy stance.

Following a gap-up opening on the back of GST reforms, the Nifty extended its gains to test the 25,022 level in the early morning session yesterday. While it pared some of those gains, the Nifty still settled with an increase of 245 points, or 1%, to close at 24,876. This marks the highest percentage gain since June 26th, 2025, a clear sign of renewed optimism.

Following Monday’s up move, Nifty reclaimed its level above the 50-day DEMA, now around 24800. By testing 25003, the Nifty has completed a 50% Fibonacci retracement of the entire fall from the recent swing high of 25669 to the recent swing low of 24337. Sustained trading above 25000 could push the index further towards the 61.8% retracement level of 25160. On the downside, the 24,750-24,820 band, where the 20 and 50-day DEMAs now coincide, stands as an immediate support zone.

If the market consolidates yesterday’s gains and trades with minimal volatility, that would be ideal for bulls.

Indian markets are likely to open near previous closing levels due to the absence of strong directional cues.

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Source: HDFC Securities Prime Research