US Market Outlook: Dow Jones rises as S&P 500, NASDAQ Composite struggle
The Dow Jones Industrial Average extended the rise for the third consecutive week and closed over a per cent. But the S&P 500 and NASDAQ Composite index seem to struggle and were down last week. S&P 500 was down 0.63 per cent and NASDAQ Composite fell 1.62 per cent.
On the currency front, the dollar index fell for the third consecutive week. It was beaten down badly after the US Federal Reserve meeting on Wednesday. The Fed cut the rates by 25 basis points as expected. There were no changes on the interest rate projections for 2026. As such, there will be only one rate cut for the next year.
The US 10Yr Treasury yield rose back sharply from its low recovering all the loss. The divergence between the treasury yield and the dollar index remains intact.
Overall, the broader picture in the US looks mixed for now. Here is our analysis on where the markets are headed.
Dow Jones (48,458.05)
The bias remains positive. Supports are at 48,000 and 47,400. The upside still remains open to see 49,500-50,000. But if the S&P 500 and the NASDAQ Composite index fall sharply, then the expected rise in the Dow Jones will be under threat.
The Dow Jones will come under fresh selling pressure if it declines below 47,400. If that happens, a fall to 46,200-46,000 cannot be avoided.
So, if the index falls below 48,000 from here, then the price action around 47,400 will need a close watch.
S&P 500 (6,827.42)
The index is struggling to get fresh buyers above 6,900. Immediate support is at 6,800. A break below it can drag the index down to 6,750 or 6,720 in the short term.
The levels of 6,700 and 6,600 are crucial supports. A fall below 6,600 will indicate a trend reversal. It will then be bearish to see 6,400-6,350 on the downside.
To avoid this fall, the S&P 500 has to sustain above 6,600. Also, to regain the bullishness, a strong rise above 6,900 is needed. Only then the rise to 7,100-7,200 mentioned last week will come into the picture.
NASDAQ Composite (23,195.97)
The NASDAQ Composite index has an immediate support at 23,000. If it manages to sustain above it, then a bounce back move to 23,500-23,700 is possible. Ideally, the index has to rise past 23,700 in order to strengthen the bullish case for a rise to 24,800-25,000.
On the other hand, if the index breaks below 23,000 from here, a fall to 22,400 can be seen initially. A break below 22,400 will be bearish and can drag the index down to 21,500-21,200.
Dollar outlook
The dollar index (98.39) has declined as expected breaking the support at 98.60. The short-term outlook is bearish. Immediate resistances are at 98.65 and 98.90. There is a good chance to see a fall to 97 in the short term.
The region around 99.50 is an important resistance. The dollar index has to breach this hurdle to turn the sentiment positive. But that looks less likely.
Treasury Yield
The US 10Yr Treasury Yield (4.18 per cent) fell to a low of 4.10 per cent and then has risen back into the 4.15-4.2 per cent resistance zone. Another resistance is around 4.25 per cent. So, the 10Yr Yield has to break above 4.25 per cent to gain momentum. Only then a rise to 4.35 per cent will come into the picture.
Failure to breach 4.25 per cent can keep the yield in a range of 4-4.25 per cent for some time. The danger of a fall to 3.9-3.85 per cent will come into the picture only if the yield declines below 4 per cent.
Published on December 13, 2025