US Market Outlook: Dow, S&P 500 stable within uptrend; NASDAQ Composite strong

The Dow Jones Industrial Average remained subdued while the S&P 500 index managed to stay afloat. The Dow was down marginally by 0.07 per cent and the S&P 500 was up 0.59 per cent. The NASDAQ Composite index on the other hand outperformed last week by rising 1.5 per cent. Indeed, on the charts, the NASDAQ Composite looks much stronger than the other two.

On the currency front, the dollar index rose well for the second consecutive week. High inflation numbers released last week gave a push for the greenback. The US Headline Consumer Price Index (CPI) rose 2.67 per cent (year-on-year) in June compared to 2.38 per cent rise seen in the month of May. Similarly, the US Core CPI rose by 2.91 per cent (year-on-year) in June from 2.77 per cent in the previous month.

The dollar index rose to a high of 98.70 after the inflation data was released and then remained higher but stable for the rest of the week. Risk-aversion on the back of the uncertainty prevailing on the tariff front is also aiding the dollar index to stay higher.

Here is an analysis on how the US markets can perform in the coming week:

Dow Jones (44,342.19)

The Dow Jones fell to a low of 43,758.98 in the first half of the week but then managed to recover almost all the losses. The index has closed the week at 44,342.19, down 0.07 per cent.

Immediate support is in the 44,000-43,900 region. The Dow Jones can rise to 45,000-45,050, a short-term resistance zone. An eventual break above 45,050 can then take the Dow up to 46,300-46,500 in the coming weeks.

Failure to breach 45,050 can keep the Dow in a range of 43,500-45,050 for some time. That in turn will delay the rise to 46,300-46,500.

The long-term outlook is also bullish with strong support in the broad 43,000-42,000 region. Dow Jones has potential to target 50,000 on the upside over the long-term. An eventual break above 46,500 will clear the way for this rally.

S&P 500 (6,296.78)

The S&P 500 index is getting good buying near 6,200. The index fell to a low of 6,201.59 and has risen back recovering all the loss. It has closed the week at 6,296.78, up 0.59 per cent for the week.

The short-term outlook is bullish. Immediate support is around 6,260. Below that 6,200 will continue to act as a strong support.

The S&P 500 index can rise to 6,360, the next immediate resistance. A break above this resistance can take it further higher towards 6,450 in the short term. The index has to decline below 6,200 to turn the outlook negative. In that case, a fall to 6,000 is possible. But such a fall looks less probable at the moment.

From a long-term perspective, the S&P 500 can target 6,800 on the upside.

NASDAQ Composite (20,895.66)

The NASDAQ Composite has risen breaking above the intermediate resistance level of 20,650.  The index touched a new high of 20,980.56 and closed the week at 20,895.66, up 1.51 per cent.

The outlook remains bullish. Immediate support will be at 20,650 and 20,600. Below that 20,350 will be the next important support. The NASDAQ Composite index can rise to 21,500-22,000 in the short term. There can be an extended rise to 22,500 and even 23,300.

From a long-term perspective, the NASDAQ Composite index has room to target 26,000 while it remains above 20,000.

Dollar index forecast

After an initial rise, the dollar index (98.48) was largely stuck between 98 and 99. The short-term outlook looks bullish. Immediate support is at 98. Chances are high for the dollar index to breach 99 and rise to 100-100.50 in the coming days.

The price action thereafter will need a close watch. A reversal from the 100-100.50 region can drag the dollar index down to 98 and lower again. In that case 96-100.50 can be the broad trading range for some time.

The euro (EURUSD: 1.1626) has good resistance around 1.17. As long as the currency trades below it, the outlook will remain negative. A fall to 1.1450-1.1400 is possible. This can aid the dollar index to go up towards 100. The euro has to rise above 1.17 to negate this fall.

The European Central Bank (ECB) meeting outcome is due this week on Thursday. This will be an important event to watch.

Treasury Yields outlook

The US 10Yr Treasury yield (4.41 per cent) has come down from a high of 4.49 per cent last week. Support is there in the 4.40-4.35 per cent region which can be tested this week. We expect the 10Yr yield to reverse higher from this support zone. That leg of upmove can take the yield up to 4.55 per cent in a week or two.

In case the yield declines below 4.35 per cent, an extended fall to 4.3 per cent or even lower is possible.

Published on July 19, 2025