US Market Outlook: Dow Jones, S&P 500, NASDAQ Composite recover, but still vulnerable to fall
The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite indices recovered well last week. The Dow Jones and S&P 500 were up 1.56 per cent and 1.7 per cent respectively. The NASDAQ Composite, on the other hand, rose over 2 per cent. This has provided some relief after having beaten down badly in the week earlier. However, on the charts, the price action indicates the indices were stable and range-bound all through the week. So, it is important to see if the indices are getting a strong follow-through rise from here or not.
Dow Jones (46,190.61)
Resistances are at 46,300 and 46,600. Supports are at 45,800 and 45,580. As long as the Dow stays below 46,600, the bias will remain negative to break 45,580. Such a break can drag the index down to 45,000 in the short term. The price action thereafter will need a close watch to see if the fall is extending to 44,700 and 44,500.
A rise above 46,600 is needed to ease the downside pressure and rise to 47,000. In order to bring back the earlier bullishness, the Dow will have to rise past 47,000 decisively.
S&P 500 (6,664)
On the charts, 6,550-6,800 looks likely to be the trading range for now. The price action indicates that the S&P 500 index can fall within this range. The chances of the fall extending to 6,500 is also possible.
The region around 6,500 is a crucial support. A strong bounce is needed from here to go back up to 6,600. Else, an extended fall to 6,350-6,300 cannot be ruled out.
Ideally, the S&P 500 index has to breach 6,800 to become bullish and rise towards 7,000.
NASDAQ Composite (22,679.97)
The bounce last week indicates lack of strength. Strong resistance is in the 23,000-23,100 region. NASDAQ Composite index has to surpass 23,100 to clear the way for a rise to 24,000. But that looks less likely.
For now, the index looks vulnerable for a fall to 22,200-22,000 in the coming days.
As mentioned last week, 21,900 is a crucial support. A break below it will drag the NASDAQ Composite index down to 21,600 and even 21,000 thereafter.
Dollar outlook
The dollar index (98.43) fell sharply last week contrary to our expectation. We had expected the index to see 100-100.30 on the upside. The index touched a low of 98.03 and has bounced back from there.
But resistance is around 98.60. The dollar index has to surpass this hurdle to become bullish for a rise to 99.50-100. Else, the index will remain vulnerable to break 98 and fall to 97.50-97 in the coming weeks.
Treasury Yields
The US 10Yr Treasury Yield (4.01 per cent) broke below 4 per cent as expected last week. It touched a low of 3.93 per cent and then has bounced back from there. Outlook remains bearish. Resistance at 4.05-4.10 per cent region can cap the upside.
The US 10Yr Yield can fall to 3.85 per cent, but not beyond that. As mentioned last week, 3.85 per cent is a strong long-term support which can halt the current fall. The 10Yr Yield can rise back from there and go up to 4 per cent and higher eventually over the medium term.
Published on October 18, 2025