US Market Outlook: Indices look vulnerable
More fall could be on the cards
The US market indices, including the Dow Jones Industrial Average, S&P 500, and NASDAQ Composite, experienced a sharp decline towards the end of the week, failing to maintain the initial upward momentum. While the Dow Jones managed to close the week with a gain, both the S&P 500 and NASDAQ Composite indices plummeted for the second consecutive week, leaving their near-term outlook unclear.
An important support level at 51,730 is expected to be tested this week, with the index's fate hinging on whether it can hold above this point or not. A bounce from 51,730 could potentially propel the index towards 53,500 in the coming weeks, while a break below 51,730 could trigger a downward spiral towards 51,000-50,500.
The recent downward trend, signaled by the price action around 51,700, suggests a lack of strong buying interest in the market. Crucial support at 7,600 will be closely watched, as a break below this level could see the S&P 500 index tumble to 7,500-7,460. Conversely, a bounce from this support could enable the index to climb back to 7,700-7,800, potentially maintaining a range of 7,600-7,800 for a while.
The broader market outlook remains bearish, with a potential fall to 24,500 in the coming months if the index breaks below the 25,800 level. The dollar index (101.75) also declined last week in line with expectations, touching a low of 101.45 before recovering most of the loss. A break below 101.20 could lead to a further decline to 101-100.90, renewing the possibility of revisiting lower levels such as 100 and below if the index continues to suffer substantial pressure.
In the medium term, a 10Yr Treasury Yield rise to 5.35 per cent could support a further rise in the dollar index to 103-103.50 if the index manages to break above 102.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
