US Market Outlook: Dow Jones, S&P 500, NASDAQ Composite hit record highs

The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite indices hit record highs last week. The indices rose well for the second consecutive week and are showing good strength. The Dow Jones was up 1.74 per cent last week. The S&P 500 and NASDAQ Composite index rose 0.94 and 0.81 per cent respectively.

On the forex front, the dollar index and the US Treasury yields are showing divergence. The US 10Yr Treasury Yield rose for the second consecutive week. The dollar index on the other hand is struggling to rise and fell last week.

Here is an analysis of how the US market will perform in the coming week:

Dow Jones (44,946.12)

The Dow Jones hit a record high of 45,203.52 and has come down from there. The bias remains bullish with good support at 44,440. A decisive break and close above 45,050 will be bullish to see 45,800-46,000 initially and then 46,500 eventually in the coming weeks. That will also keep our long-term bullish outlook intact to see 50,000 on the upside. However, a corrective fall from around 46,500 is a possibility before this rise happens.

In case, the Dow fails to rise above 45,000 from here and breaks below 44,440, a fall to 44,000-43,800 can be seen. That in turn will delay the rise to 46,500.

S&P 500 (6,449.80)

The S&P 500 broke its 6,175-6,430 range on the upside as expected. That keeps intact our broader bullish view. Immediate resistance is at 6,480. A break above it can take the S&P 500 index up to 6,530-6,550 this week.  It will also keep the doors open for the S&P 500 index to target 6,650-6,670 over the medium term and 6,800 in the long term.

Supports for the week are at 6,440 and 6,370. The index will come under pressure for a fall to 6,330 or 6,280 if it declines below 6,370. In that case, the aforementioned rise will get delayed.

NASDAQ Composite (21,622,98)

The NASDAQ Composite index rose to a new high of 21,803.75 and has come down from there. Supports are at 21,400 and 21,200 which can limit the downside. We can expect the index to reverse higher from either of these two supports. That leg of rise can take the NASDAQ Composite index up to 22,100-22,200 in the short term. That will also keep the broader uptrend intact to target 23,000 over the medium term and 26,000 in the long term.

The region around 21,000 is a key support. The index has to break below it to turn the short-term outlook negative. That looks less likely.

Dollar outlook

The dollar index (97.84) spiked to a high of 99.32 on Monday but did not sustain. The index looks vulnerable to break its support at 97.50 and fall to 96.80.

Resistance at 98.40 has to be broken to get a rise to 99.30 or 99.85. But that looks less likely as the weekly chart leaves the bias negative.

Treasury Yield

The US 10Yr Treasury Yield (4.32 per cent) has risen into the 4.3-4.4 per cent resistance zone. A rise to 4.4 per cent looks likely from here. But the price action thereafter will need a close watch.

A break above 4.4 per cent can take the yield up to 4.5 per cent. But a downward reversal from around 4.4 per cent and a subsequent fall below 4.3 per cent can drag it down to 4.2 per cent or even 4.1-4 per cent.

Data watch

Data release last week showed that the inflation in the US is going up steadily. The US Headline Consumer Price Index (CPI) rose 2.73 per cent (year-on-year) in July from 2.67 per cent in June. The Core CPI rose by 3.05 per cent in July, up from 2.91 per cent a month ago. High inflation numbers aided the Treasury yields to move up but failed to push the greenback higher.

For the coming week, the Housing Starts and the Existing Home Sales are the important data releases to watch.

Published on August 16, 2025