Indian IT stocks rallied strongly on Monday, August 25, 2025, after U.S. Federal Reserve Chair Jerome Powell’s dovish remarks at the Jackson Hole symposium boosted investor sentiment. Powell signaled a likely 25-basis-point rate cut in the upcoming September 2025 meeting, sparking optimism about U.S. economic growth and IT spending, which directly benefits Indian IT service providers.

Key Reasons Behind the Rally

Boost in U.S. IT Spending Prospects:
Powell’s comments raised expectations of increased U.S. economic activity, with lower borrowing costs likely encouraging American companies to expand their IT budgets. This is a positive development for Indian IT majors such as TCS, Infosys, and Wipro, which derive 60-80% of their revenues from U.S. clients. A pickup in digital transformation and outsourcing deals is expected.

Currency Advantage from a Weaker Dollar:
Rate cuts typically weaken the U.S. dollar, which favors Indian IT exporters. Since these firms earn revenues in dollars but incur expenses largely in rupees, the conversion becomes more profitable. The anticipation of better margins due to this currency play added to today’s rally.

Global Market Optimism:
Powell’s speech fueled a global market rally. U.S. indices like the Dow hit record highs, while Asian markets gained up to 1%. This broader optimism lifted Indian equities, with IT emerging as a clear outperformer.

Anticipation of a Sustained Rate Cut Cycle:
Markets are now pricing in the possibility of multiple rate cuts in 2025, enhancing the long-term outlook for IT services demand. With BFSI (Banking, Financial Services, and Insurance) clients expected to ramp up spending, investors see Indian IT as a beneficiary of this trend.

Sectoral Resilience Amid Market Volatility:
Despite the Nifty slipping below 25,000 earlier this month due to heavy foreign investor selling, the IT sector has shown resilience. Strong Q1 FY25 earnings and optimism around BFSI recovery positioned IT stocks as a defensive and growth-oriented bet, making today’s rally more pronounced.

Stock Performance on August 25, 2025

According to NSE data, the major IT companies are trading with  strong gains:

• Wipro is trading at 255.70, up 2.84% with a volume of 37,99,919 shares.
• Infosys (INFY) Trading at 1,524.60, gaining 2.49% with 16,15,154 shares traded.
• TCS rose 2.20% to trade at 3,121.10 on volumes of 6,30,301 shares.
• Tech Mahindra (TECHM) is trading 1.78% to 1,531.80, with 1,87,099 shares changing hands.
• HCL Technologies (HCLTECH) is trading at 1,491.90, up 1.75% with 3,55,851 shares traded.

The gains across frontline IT stocks highlight the sector-wide optimism fueled by global monetary policy signals and the improving outlook for U.S.-linked demand.