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Stocks remained relatively unchanged on Wednesday as investors eagerly awaited the Federal Reserve’s interest rate announcement later in the day. Traders also closely monitored the latest developments in US trade negotiations.

The S&P 500 and Nasdaq Composite both experienced slight fluctuations, while the Dow Jones Industrial Average experienced a modest 0.4% increase, driven by a 10% surge in Disney shares. This surge was attributed to Disney’s surprising jump in streaming subscribers.

The Federal Reserve is scheduled to announce its latest monetary policy decision at 11.30 pm IST.

Warren Buffett, with 18,000 trading days of experience, dismisses recent market volatility as insignificant compared to historical downturns. He emphasises the importance of a long-term investment philosophy, highlighting that short-term fluctuations should not deter investors. Buffett advises against panic and suggests adopting a diversified portfolio and consistent investment strategy, regardless of market conditions.

The US dollar index strengthened slightly against other major currencies, gaining 0.1% to 99.45, while US 10 year Treasury bond yields eased to 4.30% from 4.32%.

According to HSBC, bond yields are likely to move lower. “I don’t think the 10-year yield will break above 4.50%. When it hit 5% last year, policy rates were 100 basis points higher than now. With current rates and expectations of easing, it’s hard to see the 10-year going above 4.50%,” Steven Major, Global Head of Fixed Income at HSBC told CNBC-TV18.

Steven Major, Global Head of Fixed Income at HSBC, forecasts three rate cuts by the US Federal Reserve this year, followed by two more in 2026.

Major explained that while the Fed’s own projections suggest more cuts could happen, it’s also about probabilities. “It’s like saying there’s a 50% chance they cut six times, and a 50% chance they don’t cut at all,” he noted.

Matt Orton, Chief Market Strategist at Raymond James, is cautious about the near-term market outlook despite the recent rebound.

“In the short term, I am a little bit cautious… and that is largely because a lot of good news has already been priced in,” he said.

He believes that even as fears around tariffs have begun to ease as the US administration appears more responsive to market reactions, there are overly optimistic rate cut expectations that might lead to a temporary pause in momentum.

Ed Yardeni, President of Yardeni Research, does not expect any interest rate cuts from the US Federal Reserve anytime soon, as the economy remains strong.

“I have been in the ‘none and done’ camp,” Yardeni said, explaining that there is no need for the Fed to act right now. Data on payroll numbers and inflation indicate signs of resilience, and he believes the tariff uncertainties are unlikely to change the Fed’s wait-and-watch approach.

Fitch Ratings has significantly lowered its US economic growth estimate for 2025 to 1.2%, down from 2.8% last year, and says an interest rate cut from the Federal Reserve is unlikely in the near term.

“The Fed will likely wait until the fourth quarter before cutting rates,” said Brian Coulton, Chief Economist at Fitch. He cited rising inflation pressures from new tariffs and added, “We have US inflation heading above 4% by year-end.”

Coulton also warned that growing household inflation expectations could make it harder for the Fed to ease policy without risking its credibility.

Stocks moved higher on Wednesday as investors kept an eye on US trade developments and awaited the Federal Reserve’s rate announcement later in the day.

The Dow Jones Industrial Average rose 213 points, or 0.5%, while the S&P 500 added around 0.4%. The Nasdaq Composite was up about 0,3%.

Taimur Baig, Chief Economist at DBS Group Research, says those expecting a rate cut may be misreading the Fed’s room to act. He argues that sticky inflation, not recession, is the bigger concern.

“US producers are clear in their signalling. They will raise prices. They are raising prices,” Baig told CNBC-TV18, pointing to tariff-driven cost pressures and supply chain challenges that complicate the Fed’s ability to ease.

While recent growth data looked weak, Baig said it was likely distorted by import frontloading ahead of new tariffs. He expects the US economy to grow between 1.5% and 2% in the first half of 2025. “I don’t think the US economy is about to crater,” he added.

Recent data suggests that inflation in the US is easing gradually—a positive sign that now faces new risks from the Trump administration’s fresh round of tariffs, which could undo progress by driving prices back up.

The labour market remains strong, with April figures showing a gain of 177,000 jobs, giving the Fed reason to stay patient. But growing concerns that the new tariffs could dampen economic momentum are adding to the uncertainty around the Fed’s path ahead.

According to CNBC’s May Fed Survey, most respondents still expect the US Federal Reserve to cut interest rates later this year and again in 2026. However, with no updates to economic projections or the Fed’s “dot plot” expected at this week’s meeting, investors will rely heavily on the post-meeting statement and Chair Jerome Powell’s press conference for clues.The US Federal Reserve Chair Jerome Powell is widely expected to hold rates steady on May 7, keeping the key policy rate in the 4.25% to 4.50% range, where it has remained since December 2024. According to CME Group data, futures traders currently assign a probability of over 95% to the Fed making no changes at this meeting.Global markets moved in different directions on Wednesday as investors awaited the US Federal Reserve’s interest rate decision and tracked developments ahead of key trade negotiations between the US and China.Chinese stock markets closed higher, buoyed by fresh stimulus measures from Beijing aimed at boosting the country’s slowing economy. These steps helped offset some of the negative sentiment stemming from ongoing US tariff actions.In Europe, major indices in London, Paris, and Frankfurt slipped during midday trading as caution prevailed ahead of the Fed announcement.Geopolitical tensions in South Asia also rattled investor sentiment. Pakistan’s Karachi Stock Exchange plunged over 6% at the opening bell following reports of intensified cross-border shelling with India. It later pared losses to end about 3% lower.India’s Sensex, meanwhile, was around 100 points up.

Walt Disney Co. reported fiscal second-quarter results that beat Wall Street estimates and raised its outlook for the full year, citing strong performances from theme parks and streaming TV. Full-year fiscal 2025 earnings, excluding certain items, will rise 16% to $5.75 a share, Disney said Wednesday in a statement, about double its previous forecast for growth. Analysts were looking for $5.44 a share.

A number of major companies have pulled their 2025 guidance amid the uncertainty caused by US President Donald Trump’s tariffs on imported goods. But Disney is benefiting from faster-than-expected growth at its namesake parks and streaming business, and pointed to that strong performance to boost its guidance.

Uber Technologies Inc. reported weaker-than-expected quarterly gross bookings and slower gains in its rideshare business, raising the possibility of a consumer pullback amid souring sentiment about the economy.

Gross bookings, which include ride hails, delivery orders and driver and merchant earnings but not tips, were $42.8 billion in the first three months of 2025, Uber said in a statement Wednesday. Analysts projected $43.1 billion, according to Bloomberg-compiled data. Revenue also landed below expectations at $11.5 billion, as did operating income.

Chief Financial Officer Prashanth Mahendra-Rajah said in prepared remarks that the strengthening of the US dollar against Brazilian, Mexican and Argentine currencies created an “outsized headwind” for its rides business. But even at constant currency rates, rideshare bookings in the period slowed to 20% from 24% in the prior quarter.

Russia kept its crude oil production below the nation’s OPEC+ quota in April, according to people familiar with the data.

Producers pumped 8.975 million barrels a day last month, almost unchanged from March levels, the people said, asking not to be identified because the information isn’t public. That’s 23,000 barrels a day below Russia’s target for April under the OPEC+ deal, including compensation for past overproduction.

Compliance with the supply agreement of the Organization of the Petroleum Exporting Countries and its allies has been in the spotlight in recent weeks. OPEC+ leader Saudi Arabia steered the alliance to agree on higher-than-projected output hikes in May and June to punish overproducing nations such as Kazakhstan and Iraq, warning of more supplies unless laggards fall in line.

European markets were lower on Wednesday, with traders monitoring regional corporate earnings releases and awaiting the US Federal Reserve’s latest monetary policy announcement.

The pan-European Stoxx 600 index was 0.3% lower at 10:42 a.m. in London, with healthcare stocks down 1%, leading the losses.

Europe’s pharmaceuticals industry is still reeling from US President Donald Trump’s Monday announcement that tariffs for the sector would be announced within the next two weeks.

US Treasuries slipped ahead of the Federal Reserve’s interest-rate decision, with investors betting on a slower pace of monetary easing in the face of data suggesting economic resilience.

The yield on two-year notes rose four basis points to 3.82% as traders trimmed wagers on rate cuts, seeing around three quarter-point reductions in 2025 starting in July. That compares to Thursday’s pricing of a percentage point of easing this year likely starting in June — before stronger-than-expected US economic data sparked a sharp rethink.

With the central bank expected to keep its benchmark rate steady at 4.25%-4.50% on Wednesday, traders will be scrutinizing comments by Fed Chair Jerome Powell for insight into officials’ interpretation of recent data and whether President Donald Trump’s economic policies are prompting any change in view on when to ease policy. That’s as tariffs on imported goods dents consumer confidence while also potentially fanning price pressures.

China expanded its gold reserves for a sixth straight month in April, underlining its push to boost holdings of the precious metal as prices trade near a record and the trade war rumbles on.

Bullion held by the People’s Bank of China rose by about 70,000 troy ounces last month, according to data on Wednesday. In the latest six-month span, volumes have climbed by close to 1 million ounces, or about 30 tons.

Gold has rallied to successive records this year, supported by concerted central-bank buying as authorities seek to diversify holdings away from the US dollar. Bullion’s upswing — with prices up nearly 30% this year — has also been aided by rising investment demand as the US-led trade war unsettles financial markets, raises concern about US assets, and drives haven demand.

Shares of Novo Nordisk climbed on Wednesday after it said that sales of its blockbuster Wegovy weight loss drug were seen improving in the second half of the year as copycat compounded drugs are phased out.

The Danish pharmaceutical giant reported lower-than-expected first-quarter sales of its flagship obesity drug and lowered its full-year sales growth forecast

For 2025, the company now sees sales growth of 13% to 21% at constant exchange rates, below the 16% to 24% previously forecast.

Hyundai Motor Co. is set to launch its first battery electric vehicle specifically for the Chinese market as the carmaker seeks to counter local competition and reverse slumping sales.

The Elexio — an electric sport utility vehicle developed with local partner BAIC Motor Corp. — is a “retaliatory strike,” the joint venture said in a post published to its official Weibo account on Wednesday.

“It’s not that BAIC-Hyundai can’t do EVs, but if we do it, we want to do it right,” said Xiao Han, a representative for the company who hosted a livestream on Wednesday that introduced the Elexio.

BMW AG’s earnings declined less than expected in the first quarter as electric vehicle sales in Europe helped buoy the German carmaker amid slumping demand in China and the threat of US tariffs.

Earnings before interest and tax came in at €3.14 billion ($3.6 billion), a 23% drop from last year, the German manufacturer said Wednesday. BMW’s carmaking margin was 6.9%, better than the 5.8% average analyst forecast compiled by Bloomberg.

Shares rose as much as 3.7% in early trading. The stock is still down roughly 25% over the past year.

Investors pulled $8.9 billion out of US equities while sending $7.8 billion to foreign stocks in the week ending April 30, according to Bank of America.

Gold and US Treasury bonds also saw outflows while cryptocurrencies, high yield bonds and technology shows had inflows.

BofA’s private clients held 62% of their portfolio in stocks, 20% in bonds and 12% in cash.

German factory orders rose more than predicted in March, signaling improvement in the run-up to the US tariff announcements that have clouded the outlook for Europe’s largest economy.

Demand increased 3.6% from February, beating the median 1.3% estimate in a Bloomberg survey. Without major orders, the gauge was up 3.2%, the statistics office said Wednesday.

The boost was widespread, with electrical and transport equipment, machinery, automotives and pharmaceuticals all contributing.

BMW AG’s earnings plunged 23% in the first quarter as intense competition in China pushed sales in its biggest single market to a five-year low.

Earnings before interest and tax came in at €3.14 billion ($3.6 billion), the German manufacturer said Wednesday, the weakest first-quarter result since 2022. BMW’s carmaking margin declined to 6.9%.

German carmakers including BMW and Mercedes-Benz Group AG are struggling to reclaim market share in China as local brands led by BYD Co. dominate electric-vehicle sales and continue to push deeper into the luxury segment. BMW’s sales in China fell 17% in the first three months of the year, the worst first-quarter performance since 2020.

Novo Nordisk on Wednesday reported a better-than-expected rise in net profit but lowered its full-year sales growth forecast amid weaker sales of its blockbuster Wegovy weight loss drugs.

Sales of the company’s popular Wegovy obesity drug hit 17.36 billion Danish kroner over the period, slightly below the 18.51 billion Danish kroner anticipated by analysts.

For 2025, the company now sees sales growth of 13% to 21% at constant exchange rates, below the 16% to 24% previously forecast.

Hong Kong markets jumped over 2% to lead gains in Asia-Pacific after China’s central bank and financial regulators announced sweeping plans to cut key interest rates in an effort to shore up growth in the face of trade worries.

Hong Kong’s Hang Seng index rose 2.07%, while China’s CSI 300 rose 1%.

Elsewhere, markets in the region were mostly higher after reports that U.S. Treasury Secretary Scott Bessent and trade representative Jamieson Greer are set to meet with their Chinese counterparts this week.

Japan’s Nikkei 225 added 0.22% while the Topix rose 0.38%. South Korea’s Kospi added 0.32% while the small-cap Kosdaq lost 0.7%.

Shein Group Ltd. and Temu saw double-digit sales declines in the week after they raised retail prices to cover the costs of increased US tariffs, an initial sign that Donald Trump’s punitive trade measures have taken a toll on the shopping platforms’ popularity.

Shein posted a 23% drop in observed US sales during the week of April 25 to May 1, compared to the prior seven days when the price increases hadn’t set in, according to Bloomberg Second Measure, which analyzes credit and debit card data.

PDD Holdings Inc.-owned Temu’s sales fell 17% in the same period, the data show. The sales drop seen by both online marketplaces contrasted with a sales surge in March and early April as consumers hoarded products from kitchenware to clothing in anticipation of upcoming price hikes.

The dollar may face a $2.5 trillion “avalanche” of selling as Asian countries unwind their stockpile of the world’s reserve currency, according to Stephen Jen.

Asian exporters and investors may have amassed an “extremely large” pile of dollars through the years, widening the region’s trade surplus with the US, Eurizon SLJ Capital’s Jen and Joana Freire wrote in a note on Wednesday.

As a US-led trade war deepens, some Asian investors might repatriate chunks of funds or ramp up levels of protection against a weakening dollar — potentially triggering an exodus from the world’s reserve currency.

The Hong Kong dollar’s funding costs plunged the most since 2008, as the monetary authority’s intervention to defend the currency peg helped boost liquidity in the financial system.

The one-month Hong Kong Interbank Offered Rate declined 58 basis points to 3.08% on Wednesday, the most since 2008, according to Bloomberg calculations. Easing interest rates will help reduce the appeal of purchasing the Hong Kong dollar and moderate appreciation pressure.

The Hong Kong Monetary Authority stepped into the market to sell HK$129.4 billion ($16.7 billion) worth of local currency against the greenback in four intervention operations since Friday, after the Hong Kong dollar reached the strong end of its 7.75-7.85 per dollar trading band.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.