The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite indices have risen back well last week. The Dow Jones rose 1.35 per cent and recovered some of the loss made in the week earlier. The S&P 500 and the NASDAQ Composite index on the other hand surged 2.4 and 3.87 per cent thereby recovering from almost all the losses made in the previous week. Overall, the bias remains positive for the US benchmark indices.
On the currency front, the dollar index remained weak all through the week. The index was down about a per cent. The US 10Yr Treasury Yield on the other hand bounced slightly last week.
Here is an analysis of where the US markets are headed:
Dow Jones (44,175.61)
The Dow Jones is oscillating between 43,300 and 45,000 over the last few weeks. Immediate support is at 43,800-43,750. A rise to 45,000, the upper end of the range, looks likely in a week or two.
In case the index declines below 43,750 and falls further below 43,500, it can see 43,000-42,900 on the downside. As long as the Dow stays above this 43,000-42,900 support zone, the broader picture is bullish to breach 45,000 eventually. Such a break can take the Dow up to 46,500-46,700 initially and then 50,000 over the long term.
A fall below 42,900 is needed to negate this bullish view and drag the index down to 42,300-42,000.
S&P 500 (6,389.45)
The S&P 500 index retains its 6,175-6,427 range and has risen well within it. The outlook is bullish. The region between 6,175-6,160 is a good support zone. Resistance above the range is around 6,470. The index can breach this hurdle and rise to 6,650-6,670 in the medium term. That will also keep the upside open to target 6,800 in the coming months.
The short-term outlook will turn negative only if the index breaks below 6,160. If that happens a fall to 6,000 is possible.
NASDAQ Composite (21,450.02)
The NASDAQ Composite index has risen well above 21,000. This has avoided the fall to 20,000 mentioned last week. The bullish outlook is intact. Support is in the 21,000-20,800 region.The NASDAQ Composite index can rise to 21,900-22,000 in the short term.
It will also keep the upside open to target 22,500-23,300 over the medium term and 26,000 in the long term.
The NASDAQ Composite index has to fall below 20,800 to turn the short-term picture negative. Only then the danger of the fall to 20,000 will come into the picture.
Dollar outlook
The dollar index (98.18) fell gradually last week. There is a support at 97.60 which can be tested early this week. If it manages to bounce back from this support, a rise to 99.50-100 can be seen again.
But a break below 97.60 can drag it down to 97-96.50 in the short term. Broadly, it looks like the index can oscillate in a range of 96-100/101 for some time now.
Treasury Yield
The US 10Yr Treasury Yield (4.28 per cent) has bounced back last week. But this move indicates lack of strength. Cluster of resistances are there in the 4.3-4.4 per cent region which can cap the upside.
We can expect the yield to reverse lower anywhere from this resistance zone. That reversal can drag the yield below 4.2 per cent again and take it down to 4.1-4 per cent going forward.
Data watch
The US Headline and Core Consumer Price Index (CPI) data release is due on Tuesday. The Headline CPI for June was 2.67 per cent (year-on-year). A higher inflation number for July will give an early indication of the impacts of higher tariffs. That in turn will reduce the chances for the US Federal Reserve to cut rates and keep it at current levels for more time. This will be positive for the dollar index and can push it higher. So, the CPI data release this week will need a close watch.
Published on August 9, 2025