The global stock market landscape experienced a dramatic shift on August 12, 2025, as Wall Street’s major indices surged to record highs and optimism rippled across international markets, including India. The S&P 500, a bellwether for U.S. equities, closed above the 6,400 mark for the first time in its history, while the Dow Jones Industrial Average leapt by about 1.1%—nearly 500 points. The tech-heavy Nasdaq Composite also joined the rally, climbing roughly 1.4% and notching another record close, according to Yahoo Finance. Even the small-cap Russell 2000 Index soared nearly 3%, driven by growing expectations that the Federal Reserve will cut interest rates as early as September.
Behind this bullish momentum was the latest inflation data from the Bureau of Labor Statistics. The Consumer Price Index (CPI) for July increased 2.7% year over year, matching June’s figure and coming in softer than the 2.8% rise economists had anticipated. More tellingly, “core” inflation—which strips out volatile food and energy prices—rose 3.1% over the past year, up from June’s 2.9%. This uptick suggested that while goods inflation is ticking up, it’s no longer being offset by easing services inflation, as reported by the Bureau of Labor Statistics.
These numbers had an immediate effect on market sentiment. According to the CME Group, about 94% of traders priced in a Federal Reserve rate cut for September, a sharp jump in expectations following the inflation report. The prospect of cheaper borrowing costs sent investors piling into equities, especially in sectors sensitive to interest rates.
The day’s rally was also shaped by political developments in Washington. Earlier in August, President Trump fired Erika McEntarfer as commissioner of the Bureau of Labor Statistics, a move that followed the release of the July jobs report. Late on Monday, Trump announced his nomination of E.J. Antoni, chief economist at the conservative Heritage Foundation, to lead the agency. The shake-up at the Bureau, reported by CNBC, added another layer of intrigue to the market’s reaction to the inflation data—investors were keenly aware that the agency’s leadership transition could influence how future economic statistics are compiled and communicated.
Meanwhile, investors looked ahead to two more crucial data releases: the Producer Price Index, due Thursday, and retail sales figures expected Friday. Both reports are seen as key indicators of the economy’s underlying strength and could further sway the Federal Reserve’s calculus on interest rates.
In corporate news, Intel’s stock jumped more than 5% after CEO Lip-Bu Tan met with President Trump. Just a week prior, Trump had publicly called for Tan’s resignation, but after their meeting, the president took to Truth Social to describe the encounter as “a very interesting one” and praised Tan’s “success and rise” as “an amazing story.” The about-face, noted by Bloomberg, seemed to reassure investors that the chip giant’s leadership was on solid footing—at least for now.
The reverberations from Wall Street’s rally were felt thousands of miles away in India. On August 13, the Indian stock market’s benchmark indices, Sensex and Nifty 50, were poised to open higher, tracking the positive cues from global markets. The Gift Nifty, a key indicator for Indian equities, was trading around 24,619, a premium of nearly 64 points over the previous Nifty futures close, according to Mint.
However, the optimism was tempered by recent volatility. On August 12, the Sensex had actually declined by 368.49 points, or 0.46%, to close at 80,235.59. The Nifty 50 slipped 97.65 points, or 0.40%, to settle at 24,487.40. Analysts cited by Mint pointed to resistance for the Sensex near 80,500 to 81,200 and support around 79,500 to 80,000 for the trading day ahead. For the Nifty 50, the technical picture was mixed: the index had formed an inverted hammer candle on the daily chart, signaling selling pressure at higher levels, but the short-term uptrend remained intact as long as the base of 24,300 held.
“We are of the view that the current market texture is non-directional; hence, level-based trading would be the ideal strategy for day traders. On the higher side, 80,500 would act as an immediate resistance zone. Above this level, Sensex could bounce back up to 81,000 - 81,200. On the lower side, below 80,000, selling pressure is likely to accelerate,” explained Shrikant Chouhan, Head Equity Research at Kotak Securities, in an interview with Mint.
For the Nifty 50, opinions were similarly cautious. Nilesh Jain, Head – Technical and Derivatives Research Analyst at Centrum Broking Ltd., noted, “For any meaningful pullback, it is crucial for the Nifty 50 index to reclaim 24,500, which could then open the door for a retest of 24,700. Overall, we expect the Nifty to remain range-bound between 24,330 (support) and 24,700 (resistance).”
On the derivatives front, open interest data suggested that the 24,400–24,600 range would be critical for Nifty’s near-term movement. A breakout in either direction could set the tone for the next major move. VLA Ambala, Co-Founder of Stock Market Today, advised traders to stick with a sell-on-rise strategy, expecting the Nifty 50 to find support between 24,410 and 24,240 and to meet resistance near 24,580, 24,650, and 24,730 in the session.
The Bank Nifty index, which tracks the performance of major banking stocks, also ended lower on August 12, falling 467.05 points, or 0.84%, to close at 55,043.70. The index formed an Inside Bar candlestick pattern, reflecting indecision in the market. According to Om Mehra, Technical Research Analyst at SAMCO Securities, “Bank Nifty formed a bearish candle in the daily chart and remains positioned below the 50-SMA, 20-SMA, and 9-EMA, indicating sustained short-term weakness. The 100-SMA is placed around the 55,000 mark, and a decisive slip below this level could accelerate the downside momentum and invite further selling pressure.”
Support levels for Bank Nifty were identified at 54,700 and 54,450, with resistance expected near 55,650 and 56,050. Hrishikesh Yedve, AVP Technical and Derivative Research at Asit C. Mehta Investment Intermediates Ltd., highlighted the importance of the 100-DEMA near 54,950 as a key support: “As long as Bank Nifty holds above this level, a short-term pullback remains possible. On the upside, the 34-DEMA hurdle near 56,050 will act as major resistance. Break below 54,950 could open the doors for 54,500 levels.”
As the world’s two largest democracies digested the latest economic signals, one thing was clear: the interplay between inflation, central bank policy, and political developments remains as complex—and consequential—as ever. Investors everywhere are watching closely, knowing that even a single data point or pronouncement can send markets swinging in either direction.
