Bearish Risk: US Tech Crash Hits Nasdaq, Indian IT Stocks (TCS, INFY)

The US stock market experienced a significant downturn, with the S&P 500 ending a nine-week rally and the Nasdaq tumbling 4.5%, its largest drop since April 2025. This sell-off was primarily driven by a strong US jobs report, which fueled fears of the Federal Reserve maintaining higher interest rates for longer, leading to a broad market correction, particularly in the technology sector.

This development is crucial for Indian markets as global liquidity and interest rate expectations heavily influence foreign institutional investor (FII) flows into India. A hawkish US Fed stance and a struggling US tech sector can lead to FII outflows from emerging markets like India, impacting overall market sentiment and valuations, especially for export-oriented sectors like IT.

Indian IT services companies like TCS, Infosys, Wipro, HCLTech, and L&T Technology Services are likely to face negative sentiment. Their significant revenue exposure to the US market means that a slowdown in US tech spending or a general economic contraction there directly impacts their business outlook and order books. Semiconductor-related Indian companies, if any, could also see indirect pressure.

Traders should closely monitor the US Federal Reserve's upcoming statements and economic data for any shifts in interest rate policy expectations. The performance of the Nasdaq and S&P 500 in the coming week will be a key indicator. Domestically, watch for FII activity and how the Nifty IT index reacts to these global cues, especially after the recent RBI policy decision.

• •Wall Street's nine-week rally ended.
• •Nasdaq suffered its largest drop since April 2025, falling 4.5%.
• •S&P 500 fell 2.6%.
• •Technology stocks plummeted, with semiconductor stocks hit hardest.
• •Strong US jobs report heightened fears of prolonged interest rates.