Fed's Hawkish Pause Hits Global Markets, Indian Stocks in Focus

Global financial markets reeled on Thursday after the US Federal Reserve held interest rates steady in a widely anticipated move, but struck a more hawkish tone by projecting only one rate cut for 2026 and flagging persistent inflation concerns. The decision triggered a sharp selloff on Wall Street, with the Dow Jones Industrial Average plunging over 750 points, casting a pall over Asian markets. In India, benchmark indices are expected to open lower, mirroring weak global cues despite strong gains in the previous session. Specific stocks coming into focus include banking heavyweight HDFC Bank, Manappuram Finance, and Vedanta, among others, as investors assess the implications of the Fed's stance on sectoral performance and capital flows. A key sector under pressure is Information Technology. Shares of Infosys, TCS, and other IT majors fell in early trade, as the Fed's delayed rate cut trajectory and worries over sticky inflation cloud the growth outlook for the sector, which is heavily dependent on US demand. The Fed's cautious approach, underscored by Chair Jerome Powell's remarks, suggests a prolonged period of higher interest rates, which typically dampens investor appetite for growth-oriented sectors like technology. The overall market sentiment remains cautious, balancing domestic factors against the global macro headwinds created by the Fed's policy. Analysts suggest that while the rate hold was expected, the reduced number of projected cuts and emphasis on inflation worries have reset market expectations, leading to heightened volatility and a risk-off mood across asset classes.