The Dow Jones Industrial Average, NASDAQ Composite and S&P 500 index tumbled over 2 per cent each last week. The Dow Jones remained under pressure all through the week. The NASDAQ Composite and the S&P 500 on the other hand went up in the first half of the week and made another new high. But they also reversed lower in the second half of the week. The weak jobs data release on Friday accelerated the fall towards the end of the week.
The dollar index (DXY) and the US 10Yr Treasury Yield were also knocked down badly on Friday as the noise for more rate cuts increased after the jobs data release.
Will the US markets continue to trade under pressure? Here is an analysis.
Dow Jones (43,588.58)
The Dow Jones fell below the support at 44,380. Resistance is now in the 44,000-44,100 region. The index can fall to 43,000-42,800 but not beyond that.
The region between 43,000 and 42,800 is a strong support. The Dow can reverse higher from here and move up to 43,700-44,000 again.
From a big picture, the bounce from around 43,000 will indicate an inverted head and shoulder bullish pattern formation on the chart. That will keep our broader bullish view intact to see 46,500 over the medium term and 50,000 over the long term.
A decisive break above the 45,000-45,050 resistance zone will clear the way for the aforementioned rally.
S&P 500 (6,238.01)
The S&P 500 index made a new high of 6,427.02 and fell sharply giving away all the gains. Resistance is now in the 6,280-6,300 region. The index can fall to 6,130-6,100 this week. The price action thereafter will need a close watch.
A bounce from the 6,130-6,100 region can take the S&P 500 index up to 6,280-6,300 again. An eventual break above 6,300 will then see the rise extending to 6,450-6,500. That will also keep intact our long-term bullish view of the S&P 500 index targeting 6,800.
This bullish view will go wrong only if the index declines below 6,100. If that happens, a fall to 6,000 and even lower levels can be seen.
NASDAQ Composite (20,650.13)
The NASDAQ Composite index has come down sharply after making a new high of 21,457.48. Immediate support is at 20,500. A break below it can drag the index down to 20,000 in the near term. However, a fall beyond 20,000 looks less likely now.
A fresh rise from around 20,000 can take the NASDAQ Composite index up to 20,800-21,000. It will also keep the broader bullish view intact to see 22,500-23,300 on the upside over the medium term and 26,000 over the long term.
In case the index breaks below 20,000, an extended fall to 19,500-19,300 can be seen. Thereafter the index can rise back again.
Dollar index outlook
The Dollar index (98.68) fell sharply giving away some of the gains after touching a high of 100.26. Support is at 98 which can be tested this week. If the index manages to bounce back from this support, it can rise back to 100 and even 101 in the short term.
But a break below 98 can take it further down to 97. Thereafter a rise back to 98 and 100 can be seen again. Broadly, we can look for a range of 98-100 (narrow) or 97-101 (broad) in the dollar index for some time now.
Treasury Yield outlook
The US 10Yr Treasury Yield (4.22 per cent) tumbled from around 4.41 per cent on Friday. The fall below 4.3 per cent has turned the near-term outlook negative. The US 10Yr Yield can fall to 4.1 or 4 per cent form here.
An intermediate bounce from around 4.2 per cent if seen can be capped at 4.3 per cent.
Data watch
The US Federal Reserve kept the rates unchanged at 4.25-4.5 per cent range last week and that did not impact the market much. The major trigger for the fall came from the sharp lower revisions in the non-farm payroll data on Friday. The US added 73,000 jobs in July. The June data was revised lower from 147,000 to 14,000 and the May data from 144,000 to 19,000.
No major data release is scheduled for this week. So, the impact of the weak jobs data can continue to weigh on the markets.
Published on August 2, 2025
