Mumbai, May 23 -- The domestic stock market is expected to enter the week with a cautious outlook as investors digest ongoing uncertainties and await key developments. Last week saw volatile trading, largely due to profit-booking and uncertainty surrounding the progress of the India-U.S. trade agreement. With valuations currently elevated and delays in finalizing the trade deal, a period of short-term consolidation appears likely. Foreign Institutional Investors may reduce their positions in the domestic market amid this environment.

Despite these concerns, domestic factors provide some support. Strong macroeconomic indicators, solid corporate earnings, and forecasts of an above-normal monsoon season contribute positively to market senti...