Fed's Dovish Tilt, Trump-Modi Bonhomie, And A Resounding Vindication — Talking Point This Week

This week marked many landmark developments in the world of business and finance. Globally, the US Fed cut interest rates and signalled two more reductions this year. Intel's stock soared after an investment by Nvidia, and Zijin Gold sought $3.2 billion in the biggest IPO since May. Back home, Indian equity markets rebounded strongly amid optimism over India-US trade talks and the Federal Reserve's 25-basis-point rate cut, driven by gains in auto, realty, and PSU banking sectors. Prime Minister Narendra Modi's birthday showed the rekindling of the brewing bonhomie between US and India, as Donald Trump was among the first world leaders to wish him.

The Adani Group got a clean chit in the Hindenburg case from SEBI, which is a landmark judgement. Beyond corporates, four Indian B-Schools made it to LinkedIn's Global Top 20 MBA rankings and the Apple iPhone 17 series became available for purchase in India from Sept. 19. The launch took place last week, where Apple introduced four models for this season: iPhone 17, iPhone 17 Air, iPhone 17 Pro and iPhone 17 Pro Max.

Here are the key talking points this week:

Bonhomie Between Two 'Friends'?

The social media posts exchanged by Modi and Trump this week are enough to point towards the growing bonhomie, just weeks after ties plunged to a low.

"Just had a wonderful phone call with my friend, Prime Minister Narendra Modi. I wished him a very Happy Birthday! He is doing a tremendous job. Narendra: Thank you for your support on ending the War between Russia and Ukraine! (sic)", Trump had posted on social media platform X.

Reciprocating the gesture, PM Modi said, "Thank you, my friend, President Trump, for your phone call and warm greetings on my 75th birthday. Like you, I am also fully committed to taking the India-US Comprehensive and Global Partnership to new heights. We support your initiatives towards a peaceful resolution of the Ukraine conflict."

Doves All Around

The Federal Reserve lowered interest rates by 0.25 percentage points—the first reduction since December 2024—and indicated plans for two additional cuts by the close of 2025. A single dissenting vote came from newly appointed Governor Miran, who advocated for a more aggressive 0.50 percentage point decrease, though FOMC opinions split more sharply on 2026 projections. The revised dot plot forecasts just one further 0.25 percentage point cut next year, yet several committee members envision a steeper easing trajectory. In contrast, financial markets are now betting on two 25-basis-point cuts in 2025 and anywhere from two to three in 2026. The lowest dot has the “terminal” rate, or where the Fed stops cutting, at 2.4% in 2027, corresponding to 175 basis points more in easing from where we are now. Or 200 including this week’s cut!

New Record Highs As Fed Eases

US stocks have moved higher this week on the back of Fed easing. Other stocks are following suit. As a result, global stock markets have reached a record $143.8 trillion in market cap. As per an analysis by Kobeissi, since the April 2025 low, the value of world stocks has skyrocketed by $33.8 trillion, or 31%. Furthermore, global markets have added a whopping $83 trillion in value, rising 137%, since the 2020 low. At the current pace, global stock market cap gains since 2020 will exceed $100 trillion by the end of 2025. As a result, world stocks will surpass $150 trillion for the first time in history.

What Are The Bulls Thinking Of?

The latest BofA Global Fund Manager Survey shows a significant shift in sentiment, with fund managers becoming increasingly bullish. The survey's findings include cash levels dropping to 3.9%, the lowest since July 2023, and equity allocation rising to a seven-month high. There's also a notable increase in global growth optimism and a decline in recessionary trade war concerns, with only 12% citing it as a risk compared to 80% in April. Furthermore, nearly half of the respondents (47%) expect the Fed to implement four or more rate cuts in the next 12 months, reflecting a dovish stance on monetary policy. Separately, Citigroup Inc.'s family office clients are seeking out risky bets in private markets to drive returns, even amid heightened global trade uncertainty, as per an article on Bloomberg. Almost three-quarters of investment firms for the world's super-rich are looking to acquire stakes directly in companies, with startups among the most popular areas. So then, stay bullish. And look at private markets too.

Clean Chit

SEBI issued a resounding clean chit to Gautam Adani, his brother Rajesh Adani, and key Adani Group entities including Adani Ports & SEZ, Adani Power, and Adani Enterprises, fully exonerating them of all allegations levelled by US short-seller Hindenburg Research in its explosive January 2023 report that accused the conglomerate of stock manipulation, accounting fraud, and other allegations. After an exhaustive probe spanning fiscal years 2013 to 2021, SEBI concluded that the scrutinised transactions were legitimate commercial loans—fully repaid with interest—and did not qualify as related-party dealings under the regulatory framework in effect at the time, thus violating neither the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) nor Listing Obligations and Disclosure Requirements regulations. The decision, echoing a prior Supreme Court-appointed expert panel's findings of no prima facie wrongdoing, triggered a sharp rally in Adani stocks, with shares surging up to 13% on Friday, erasing lingering uncertainties from the Hindenburg fallout that had once wiped out over $100 billion in market value and reaffirming the group's commitment to transparency and compliance.

We wrap with a billion dollar question. What is Nvidia doing with all its 'trillions'? After touching a trillion-dollar mark as recently as 2023, Nvidia's market capitalisation is over $4.28 trillion. So, how does the company put its money to work? Nvidia’s $4.28 trillion market cap gives it currency as powerful as cash. And it has refrained from making splashy acquisitions with this cash. Unlike companies in the 2000s that overpaid for acquisitions, Nvidia is seeding bets — minority stakes, tech licensing, ecosystem lock-ins — ensuring gravity stays. Effectively, it is taking stakes in, and partnering with, other AI firms, making sure they — and the wider industry — continue orbiting around it. Post buying a stake in Intel, news also broke yesterday that Nvidia had spent nearly $1 billion to hire the CEO of an AI startup and to license its technology, while on Tuesday the chipmaker unveiled £11 billion ($15 billion) of investment in the UK, part of which will be used to deploy 120,000 Blackwell chips in the country. The Blackwell chips deployment entrenches Nvidia in national AI infrastructure, locking governments into its stack. Is this the new oil diplomacy — not crude barrels, but compute clusters? Keep an eye out for its investments - they may well be what the future of AI is.

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