US Stocks End Flat After a Rollercoaster Thursday: What’s Next for Global Markets?

 A Volatile Thursday in the US

Thursday’s trading session in the US was anything but calm. Early gains driven by optimism around corporate earnings were tempered by concerns over renewed tariff threats and mixed economic signals. The major indices—S&P 500, Nasdaq, and Dow Jones—experienced intraday swings but ultimately ended close to their starting points. According to posts on X, the S&P 500 dipped by 0.67%, Nasdaq fell 1.00%, and the Dow was down 0.61%, reflecting investor unease about potential trade disruptions, particularly with tariffs on overseas-manufactured goods like iPhones impacting tech giants such as Apple.

The volatility was fueled by several factors:

• Tariff Threats: US President Donald Trump’s comments on imposing a 50% tariff on certain imports rattled markets, particularly affecting companies with global supply chains.

• Economic Data: Mixed reports on inflation and employment kept investors on edge, with fears of tighter monetary policy lingering.

• Corporate Earnings: While some sectors reported strong earnings, others fell short, contributing to the uneven market performance.

Despite these challenges, the market’s ability to close nearly flat suggests a resilience among investors, who are balancing risks with opportunities as they await further clarity.

Global Market Sentiment

The US market’s performance sets the tone for global markets, as it remains a key driver of investor sentiment worldwide. Posts on X indicate that Asian markets showed mixed results last week, with Japan’s Nikkei and Hong Kong’s Hang Seng gaining ground, while China’s Shanghai Composite declined. European markets also faced pressure, with the Euro slumping in response to tariff concerns.

This cautious mood is likely to carry over into Monday’s trading session. Investors worldwide will be watching for cues from US futures, which, according to recent posts, have been weak following Moody’s downgrade of the US credit rating. This downgrade could dampen optimism and lead to a muted start for global indices.

Indian Market Outlook for Monday

In India, the Sensex and Nifty are expected to open cautiously on Monday, May 26, 2025, reflecting the global mood. A post from @moneycontrolcom noted that the Nifty and Sensex were likely to see a muted open on Friday, May 23, due to flat Wall Street performance and quiet GIFT Nifty futures. This trend may persist into Monday, as the Indian market remains sensitive to global cues, particularly from the US.

Several factors will influence India’s market opening:

• Global Cues: The Indian market often mirrors trends in Asian and US markets. A flat or slightly negative US close, combined with weak Asian trends, could lead to a subdued start for the Sensex and Nifty.

• US Credit Rating Downgrade: Moody’s downgrade of the US credit rating, as mentioned in a post by @FortuneIndia, may weigh on investor confidence, particularly for sectors like IT and pharmaceuticals, which rely heavily on US markets.

• Domestic Factors: India’s market will also be influenced by local developments, such as upcoming economic data releases and corporate earnings. Any positive surprises in these areas could offset global headwinds.

• FII Activity: Foreign Institutional Investors (FIIs) have been net sellers in recent sessions, and their activity will be crucial in determining market direction. A continuation of selling could pressure indices lower.

Given these dynamics, analysts expect the Nifty to hover around the 24,000–24,500 range, with support levels at 23,800 and resistance at 24,800. The Sensex, similarly, may trade between 79,000 and 81,000. Sectors like banking, IT, and consumer goods will be in focus, with investors likely to favor defensive stocks amid global uncertainty.

What Investors Should Watch For

As markets prepare to open on Monday, here are key factors to monitor:

1. US Futures and Asian Markets: Early trading in Asian markets, particularly the Nikkei and Hang Seng, will provide clues about global sentiment. US futures on Sunday evening will also set the tone.

2. Geopolitical Developments: Any escalation in trade tensions or new tariff announcements could further unsettle markets.

3. Rupee Movement: The Indian rupee’s performance against the US dollar will impact FII flows and market sentiment. A weaker rupee could dampen investor confidence.

4. Sectoral Performance: In India, keep an eye on IT stocks like Infosys and TCS, which are sensitive to US economic developments, and banking stocks like HDFC Bank and ICICI Bank, which drive index movements.

Strategies for Investors

For Indian investors, a cautious approach is advisable:

• Focus on Quality: Stick to fundamentally strong companies with stable earnings, particularly in defensive sectors like FMCG and pharmaceuticals.

• Monitor Global Cues: Stay updated on US and Asian market trends over the weekend to gauge Monday’s opening.

• Diversify Holdings: Spread investments across sectors to mitigate risks from global volatility.

• Avoid Panic Selling: Short-term volatility is expected, but long-term investors should focus on fundamentals rather than reacting to daily fluctuations.

Conclusion

Thursday’s flat close in the US stock market, despite significant volatility, reflects a market grappling with uncertainty but holding its ground. As we look to Monday, global markets, including India’s, are likely to open cautiously, influenced by US tariff threats, the credit rating downgrade, and mixed economic signals. For Indian investors, staying informed and maintaining a diversified portfolio will be key to navigating this uncertain landscape. Keep an eye on global developments over the weekend, and be prepared for a potentially subdued but opportunity-rich trading session.