US Stocks Decline Amid Valuation Concerns, Indian Markets Set for Weak Opening

American equity indices extended their decline on Wednesday, with major averages drifting lower throughout the session. The Dow fell 171.50 points (0.4%) to 46,121.28, while the Nasdaq dropped 75.62 points (0.3%) to 22,497.86 and the S&P 500 declined 18.95 points (0.3%) to 6,637.97.

Technology stocks drove the broader market lower for a second consecutive day, with the S&P 500 and Nasdaq 100 both declining roughly 0.3%. Nvidia led the retreat with a 5.7% drop, extending Tuesday’s 2.8% decline, while Oracle fell 1.7%. Investor concerns about elevated valuations in artificial intelligence stocks weighed on sentiment, overshadowing gains in energy and consumer sectors.

Federal Reserve Chair Jerome Powell’s comments describing equity prices as “fairly highly valued” continued to pressure markets. Speaking in Rhode Island on Tuesday, Powell warned of “no risk-free path” for monetary policy, noting that aggressive rate cuts could reignite inflation while prolonged restrictive policy might weaken employment.

Intel surged 6.4% on reports of potential investment from Apple, adding to momentum from Nvidia’s recent $5 billion commitment and improved PC demand forecasts.

International markets showed mixed performance, with Saudi Arabia posting its best day in five years while China gained 1%. Alibaba rallied after announcing plans to increase AI spending above $50 billion and expand its Nvidia partnership.

Copper jumped nearly 4% to $4.76 per pound following supply disruptions at an Indonesian mine. Oil prices retreated as investors took profits after reaching seven-week highs on inventory draws and geopolitical concerns.

The dollar held steady, maintaining overnight gains as traders positioned for measured Fed easing. Markets currently price in 43 basis points of cuts across the remaining two policy meetings this year, though Fed officials emphasize upcoming inflation and employment data will guide decisions.

Indian markets declined for the fourth consecutive session on Wednesday, with the Nifty falling 112 points (0.45%) to close at 25,056. Persistent selling pressure stemmed from continued foreign fund outflows and profit-taking ahead of second-quarter earnings announcements.

The Nifty experienced volatile trading with intraday swings favouring both bulls and bears, though sellers ultimately dominated by session’s end. The index tested its 20-day exponential moving average support at 25,042 and managed to close marginally above this critical level.

A sustained break below the 20 DEMA and the psychologically important 25,000 mark could trigger further downside toward the next support level at 24,926. On the upside, resistance levels stand at 25,150 and 25,262 for any potential recovery attempts.

Indian markets are poised to open marginally lower following weak global cues.

Source: HDFC Securities Prime Daily, 25 Sept 2025

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